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As filed with the Securities and Exchange Commission on June 11, 2014
Registration No. 333- 193950

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 4
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Veritiv Corporation
(Exact Name of Registrant as Specified in its Charter)

 
					
Delaware	 	5110	 	46-3234977	
(State or other jurisdiction of
incorporation)	 	(Primary Standard Industrial
Classification Code Number)	 	(I.R.S. Employer
Identification No.)	

6400 Poplar Ave.
Memphis, TN 38197
Tel: (901) 419-9000
(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant’s Principal Executive Offices)

Mark W. Hianik, Esq.
Senior Vice President, General Counsel and Corporate Secretary
Veritiv Corporation
6400 Poplar Ave.
Memphis, TN 38197
Tel: (901) 419-9000
(Name, Address, including Zip Code, and Telephone Number, including Area Code, of Agent for Service)

With a copy to:

Peter J. Loughran, Esq.
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
(212) 909-6000	 	Dennis M. Myers, P.C.
Kirkland & Ellis LLP
300 North LaSalle
Chicago, IL 60654
(312) 862-2000	

Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable following the effective date of this registration statement and the date on which all other conditions to the merger of UWW Holdings, Inc. with and into Veritiv Corporation (“SpinCo” or the “registrant”) pursuant to the merger agreement described herein have been satisfied or waived.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.   ¨
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	 	¨	  	Accelerated filer	 	¨	
				
Non-accelerated filer	 	x   (Do not check if a smaller reporting company)	  	Smaller reporting company	 	¨	

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.
 
SUBJECT TO COMPLETION, DATED JUNE 11, 2014
PRELIMINARY PROSPECTUS
8,160,000 Shares
Veritiv Corporation
Common Stock

This prospectus is being furnished in connection with the planned distribution by International Paper Company (“International Paper”) on a pro rata basis to its shareholders of all the shares of common stock of its wholly-owned subsidiary Veritiv Corporation (“SpinCo”) outstanding prior to the Merger described below. SpinCo will own and operate xpedx, the business-to-business distribution business of International Paper (“xpedx”). We refer to such planned distribution as the “Distribution” or “spin-off.” Immediately following the Distribution, UWW Holdings, Inc. (“UWWH”) will merge with SpinCo, with SpinCo continuing as the surviving corporation (the “Merger”).
Each share of International Paper common stock outstanding as of 5:00 p.m., New York City time, on June 20, 2014, the record date for the Distribution (the “record date”), will entitle its holder to receive a number of SpinCo shares of common stock determined by a formula as described in this prospectus. We expect the distribution ratio to be approximately 0.0188 SpinCo shares of common stock for each share of International Paper common stock. The distribution of SpinCo common stock will be made in book-entry form. As a result of the Merger, the sole shareholder of UWWH will receive a number of shares of SpinCo common stock for each share of UWWH common stock that it holds at the time of the Merger in a private placement transaction that will result in International Paper’s shareholders owning approximately 51%, and the sole shareholder of UWWH owning approximately 49%, of the shares of SpinCo common stock on a fully-diluted basis immediately following the Merger. On the distribution date, 8,160,000 shares of our common stock will be distributed to International Paper shareholders. We expect that the Distribution and the Merger will be tax-free to International Paper’s shareholders for U.S. federal income tax purposes, except for gain or loss attributable to cash received in lieu of fractional shares in the Distribution. Immediately after the Transactions (as defined below), SpinCo will be an independent, publicly-traded company that will own and operate the combined businesses of xpedx and Unisource Worldwide, Inc. (“UWW”).
SpinCo has applied to list its common stock on the New York Stock Exchange (the “NYSE”) under the symbol “ VRTV”.
No action will be required of you to receive common stock of SpinCo, which means that:
 
 	•	 	you will not be required to pay for our common stock that you receive in the Distribution;	
 
 	•	 	you do not need to surrender or exchange any of your International Paper common stock in order to receive SpinCo common stock, or take any other action in connection with the spin-off.	
There is currently no trading market for our common stock. However, we expect that a limited market, commonly known as a “when-issued” trading market, for our common stock will develop on or shortly before the record date for the Distribution, and we expect “regular way” trading of our common stock will begin the first trading day after the completion of the Distribution.

You should carefully consider the matters described under “ Risk Factors ” beginning on page 39 of this prospectus for a discussion of factors that should be considered by recipients of our common stock.
Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities.
The date of this prospectus is                     , 2014.

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 TABLE OF CONTENTS

 	  	Page	 	
Supplemental Information	  	 	3	  	
Introduction	  	 	6	  	
Questions and Answers about the Transactions	  	 	8	  	
Prospectus Summary	  	 	16	  	
Summary Historical Combined Financial Data of xpedx	  	 	32	  	
Summary Historical Consolidated Financial Data of Unisource	  	 	34	  	
Summary Unaudited Pro Forma Condensed Combined Financial Data	  	 	36	  	
Risk Factors	  	 	39	  	
Note Regarding Forward-Looking Statements and Information	  	 	60	  	
The Transactions	  	 	62	  	
The Merger Agreement	  	 	72	  	
The Contribution and Distribution Agreement and the Ancillary Agreements	  	 	86	  	
Dividend Policy	  	 	98	  	
Capitalization	  	 	99	  	
Selected Historical Combined Financial Data for xpedx	  	 	100	  	
Selected Historical Consolidated Financial Data for Unisource	  	 	101	  	
Unaudited Pro Forma Condensed Combined Financial Information of Combined Company and Related Notes	  	 	102	  	
Management’s Discussion and Analysis of Financial Condition and Results of Operations of xpedx	  	 	114	  	
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Unisource	  	 	134	  	
Business of xpedx	  	 	164	  	
Business of Unisource	  	 	172	  	
Management of SpinCo Following the Transactions	  	 	181	  	
Compensation of Directors	  	 	188	  	
Executive Compensation	  	 	188	  	
Security Ownership of Certain Beneficial Owners and Management	  	 	198	  	
Certain Relationships and Related Party Transactions	  	 	200	  	
Description of Capital Stock	  	 	202	  	
Description of Material Indebtedness	  	 	208	  	
Legal Matters	  	 	211	  	
Experts	  	 	211	  	
Where You Can Find More Information	  	 	212	  	
Index to Financial Statements	  	 	F-1	  	
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it.
This prospectus is being furnished solely to provide information to International Paper shareholders who will receive shares of SpinCo common stock in the Distribution. It is not to be construed as an inducement or encouragement to buy or sell any of our securities or any securities of International Paper. This prospectus describes our business, our relationship with International Paper, Unisource’s business, and the Distribution and the Mergers, and provides other information to assist you in evaluating the benefits and risks of holding or disposing of our common stock that you will receive in the Distribution. You should be aware of certain risks relating to the spin-off, our business, Unisource’s business and ownership of our common stock, which are described under the heading “Risk Factors.”
You should not assume that the information contained in this prospectus is accurate as of any date other than the date set forth on the cover. Changes to the information contained in this prospectus may occur after that date, and we undertake no obligation to update the information, except in the normal course of our public disclosure obligations.
 
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 SUPPLEMENTAL INFORMATION
In this prospectus:
“ABL Facility” has the meaning specified in “Description of Material Indebtedness.”
“Bain Capital” means Bain Capital Partners, LLC and investment funds advised or managed by it.
“Closing Date” means the date on which the Merger occurs pursuant to the Merger Agreement.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“combined company” means SpinCo and its subsidiaries following and giving effect to the completion of the Transactions.
“Contribution” means the contribution by International Paper of xpedx to SpinCo pursuant to the terms of the Contribution and Distribution Agreement.
“Contribution and Distribution Agreement” means the Contribution and Distribution Agreement, dated January 28, 2014, as amended, among International Paper, SpinCo, UWWH and the UWWH Stockholder.
“Consulting and Non-Competition Agreement” means the Consulting and Non-Competition Agreement, dated as of January 28, 2014, between UWWH and Allan R. Dragone.
“Debevoise” means Debevoise & Plimpton LLP.
“DGCL” means the General Corporation Law of the State of Delaware.
“Distribution” means the pro rata distribution immediately prior to the consummation of the Merger of all the then outstanding shares of SpinCo to the shareholders of International Paper.
“distribution agent” means Computershare Inc., a Delaware corporation and its fully owned subsidiary, Computershare Trust Company, N.A., a national banking association, the distribution agent in connection with the Distribution.
“distribution date” means July 1, 2014, the expected date of the Distribution.
“Employee Matters Agreement” means the Employee Matters Agreement, dated as of January 28, 2014, as amended, among International Paper, SpinCo and UWWH.
“Employment Agreement” means the Employment Agreement, dated as of January 28, 2014, between SpinCo and Mary A. Laschinger.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Georgia-Pacific” means Georgia-Pacific LLC or its predecessor, Georgia-Pacific Corporation.
“Kirkland” means Kirkland & Ellis LLP.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1977.
“International Paper” means International Paper Company, a New York corporation.
 
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“IRS” means the U.S. Internal Revenue Service.
“IRS ruling” means the private letter ruling from the IRS to the effect that the spin-off and certain related transactions will qualify as tax-free to SpinCo, International Paper and International Paper’s shareholders for U.S. federal income tax purposes.
“Merger” means the merger of UWWH with and into SpinCo, with SpinCo continuing as the surviving company.
“Mergers” means the Merger and the Subsidiary Merger.
“Merger Agreement” means the Merger Agreement, dated January 28, 2014, as amended, among International Paper, SpinCo, xpedx Intermediate, xpedx LLC, the UWWH Stockholder, UWWH and UWW.
“NYSE” means the New York Stock Exchange.
“record date” means 5:00 p.m., New York City time, on June 20, 2014, the record date for the Distribution.
“Sarbanes Oxley Act” means the Sarbanes-Oxley Act of 2002.
“SEC” means the U.S. Securities and Exchange Commission.
“SpinCo” means Veritiv Corporation, a Delaware corporation.
“Subsidiary Merger” means the merger of xpedx Intermediate with and into UWW, with UWW continuing as the surviving company.
“Tax Receivable Agreement” means the Tax Receivable Agreement, to be dated as of the Closing Date, between SpinCo and the UWWH Stockholder.
“Tax Matters Agreement” means the Tax Matters Agreement, dated as of January 28, 2014, among International Paper, SpinCo and UWWH.
“Transaction Agreements” means the Contribution and Distribution Agreement, the Merger Agreement, the Tax Receivable Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Transition Services Agreement and the other agreements entered into by International Paper, UWWH and their respective affiliates in connection with the Transactions.
“Transactions” means the transactions contemplated by the Merger Agreement and the Contribution and Distribution Agreement which provide, among other things, for the Distribution and the Mergers, as described under the section “The Transactions.”
“Transition Services Agreement” means the Transition Services Agreement, to be dated as of the Closing Date, between International Paper and SpinCo.
“Unisource” means UWWH and its subsidiaries.
“UWW” means Unisource Worldwide, Inc., a Delaware corporation and a wholly-owned subsidiary of UWWH.
“UWWH” means UWW Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the UWWH Stockholder.
 
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“UWWH Stockholder” means UWW Holdings, LLC, a Delaware limited liability company, the sole shareholder of UWW Holdings, Inc.
“we,” “us” and “our” refers to SpinCo and its subsidiaries and the xpedx business that will be contributed thereto for periods prior to the completion of the Transactions, and to SpinCo and its subsidiaries, including the combined businesses of xpedx and Unisource, after giving effect to the Transactions, unless the context otherwise requires or indicates.
“xpedx” or the “xpedx business” means the business-to-business printing, packaging and facility supplies and equipment distribution business of International Paper, as described in International Paper’s public filings as its distribution segment.
“xpedx Intermediate” means xpedx Intermediate, LLC, a Delaware limited liability company and a wholly-owned subsidiary of International Paper (that will be a wholly-owned subsidiary of SpinCo at the time of the Distribution).
“xpedx LLC” means xpedx, LLC, a New York limited liability company and a wholly-owned subsidiary of International Paper (that will be a wholly-owned, indirect subsidiary of SpinCo at the time of the Distribution).
Throughout this prospectus, with respect to Unisource, references to “December 31, 2013” or “fiscal 2013” refers to the year ended December 31, 2013, references to “December 31, 2012” or “fiscal 2012” refers to the 52 weeks ended December 29, 2012, references to “fiscal 2011” refers to the 52 weeks ended December 31, 2011, references to “December 31, 2010” or “fiscal 2010” refers to the 52 weeks ended January 1, 2011, references to “December 31, 2009” or “fiscal 2009” refers to the 52 weeks ended January 2, 2010 and references to “December 31, 2008” or “fiscal 2008” refers to the 52 weeks ended January 3, 2009. In addition, references to “March 31, 2014” refer to the three months ended March 31, 2014 and references to “March 31, 2013” refer to the 13 weeks ended March 30, 2013.
 
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 INTRODUCTION
On April 22, 2013, International Paper announced that it had entered into a letter of intent with UWWH regarding a proposed business combination of xpedx, its business-to-business printing, packaging and facility supplies and equipment distribution business, and Unisource in a transaction structured as a “Reverse Morris Trust,” in which a newly-formed entity holding the xpedx business would be spun off and merged with UWWH, creating an independent, publicly-traded company. A “Reverse Morris Trust,” or “RMT,” transaction is a spin-off structure in which, as part of a plan, a merger partner, here UWWH, merges with the spun-off subsidiary, here SpinCo, in a transaction intended to be tax-free to the distributing parent and the distributing parent’s shareholders. See “The Transactions—Background of the Distribution and the Merger.” International Paper will effect the spin-off through a pro rata distribution to International Paper shareholders of all of the shares of common stock of SpinCo outstanding prior to the Merger. SpinCo will hold, through its subsidiaries, all of the assets and liabilities of xpedx. The Distribution will occur pursuant to a Contribution and Distribution Agreement, which International Paper, SpinCo, UWWH and the UWWH Stockholder entered into on January 28, 2014.
On January 28, 2014, International Paper announced that it, SpinCo, xpedx Intermediate and xpedx LLC had entered into an Agreement and Plan of Merger with UWWH, the UWWH Stockholder and UWW (the “Merger Agreement”), providing that sequentially and immediately following the Distribution and on the terms and subject to the other conditions of the Merger Agreement, UWWH will merge with and into SpinCo, with SpinCo continuing as the surviving corporation. Immediately thereafter, a wholly-owned subsidiary of SpinCo (“xpedx Intermediate”) will merge with and into UWW, a wholly-owned subsidiary of UWWH, with UWW surviving such merger as a wholly-owned subsidiary of SpinCo (the “Subsidiary Merger”). The Merger and the Subsidiary Merger are collectively referred to as the “Mergers.”
On July 1, 2014, the expected date of the Distribution (the “distribution date”), each holder of International Paper common stock as of the record date will receive a number of shares of SpinCo common stock determined by a formula based on the number of International Paper shares of common stock outstanding at 5:00 p.m., New York City time, on the record date. Each such holder will receive a number of SpinCo shares of common stock equal to the percentage of the total number of SpinCo shares of common stock outstanding as of the time of the Distribution as is equal to a fraction, (a) the numerator of which is the total number of issued and outstanding International Paper shares of common stock held by such holder as of the record date and (b) the denominator of which is the total number of International Paper shares of common stock issued and outstanding as of the record date (excluding treasury shares held by International Paper and any other International Paper shares otherwise held by International Paper or one of its subsidiaries). Based on the number of International Paper shares of common stock outstanding as of June 9, 2014, we expect the distribution ratio to be approximately 0.0188 SpinCo shares of common stock for each International Paper share of common stock. As a result of the Merger, the UWWH Stockholder will receive a number of newly issued shares of SpinCo common stock for each share of UWWH common stock that it holds at the time of the Merger, in a private placement transaction, equal to (i) the aggregate number of SpinCo shares issued and outstanding after the Distribution, but prior to the Merger, divided by (ii) 0.51, multiplied by (iii) 0.49. Although the number of International Paper shares of common stock outstanding may increase or decrease prior to the record date and as a result the distribution ratio may change, it will nonetheless result in International Paper shareholders owning approximately 51%, and the UWWH Stockholder owning approximately 49%, of the shares of SpinCo common stock on a fully-diluted basis immediately following the Merger. Immediately following the Distribution, but prior to the Merger, International Paper’s shareholders will own all of the shares of common stock of SpinCo outstanding. You will not be required to make any payment, surrender or exchange your International Paper common stock or take any other action to receive your shares of SpinCo common stock. In lieu of fractional shares of SpinCo, shareholders will receive a cash payment. To that end, the distribution agent will sell whole shares that otherwise would have been distributed as fractional shares of SpinCo in the open market at prevailing market prices and distribute the aggregate cash proceeds of the sales, net of brokerage fees and similar costs, pro rata to each International Paper shareholder who would otherwise have been entitled to receive a fractional share of SpinCo, as applicable, in the Distribution.
 
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We expect that the Distribution and the Merger will be tax-free to International Paper’s shareholders for U.S. federal income tax purposes, except for any gain or loss attributable to cash received in lieu of a fractional share in the Distribution. Immediately after the Transactions, we will be an independent, publicly-traded company that will own and operate the combined businesses of xpedx and Unisource.
You may contact International Paper with any questions. International Paper’s contact information is:
International Paper Company
Attn: Investor Relations
6400 Poplar Ave.
Memphis, TN 38197
Tel: (901) 419-4352
 
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 QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS
Set forth below are commonly asked questions and answers about the Distribution, the Merger and the transactions contemplated thereby. You should read the sections entitled “The Transactions,” “The Merger Agreement” and “The Contribution and Distribution Agreement and the Ancillary Agreements” of this prospectus for a more detailed description of the matters described below.
Q: What are the Transactions?
A: The Distribution is the final step in the separation of the xpedx business from International Paper, which will be accomplished through a series of transactions that will result in International Paper’s shareholders owning approximately 51% of the shares of common stock of SpinCo, with SpinCo in turn holding the xpedx business, which is currently operated by International Paper. The Distribution will be a pro rata distribution immediately prior to the consummation of the Merger of all the then outstanding shares of common stock of SpinCo by International Paper to holders of International Paper common stock. Under the terms of the Merger Agreement, immediately following the Distribution, UWWH will merge with and into SpinCo, with SpinCo continuing as the surviving corporation, and xpedx Intermediate will merge with and into UWW, with UWW surviving the merger as a wholly-owned subsidiary of SpinCo. As a result of the Merger, the UWWH Stockholder will receive a number of shares of SpinCo common stock for each share of UWWH common stock that it holds at the time of the Merger in a private placement transaction. This will result in International Paper’s shareholders owning approximately 51%, and the UWWH Stockholder owning approximately 49%, of the common stock of SpinCo on a fully-diluted basis immediately following the Merger.
Q: What is SpinCo?
A: SpinCo is a wholly-owned subsidiary of International Paper incorporated under the laws of Delaware. Following the Transactions, SpinCo will be an independent, publicly-traded company operating through its subsidiaries what was formerly International Paper’s xpedx business and Unisource’s business.
Q: What is the reason for the Transactions?
A: International Paper determined that the Transactions would be in the best interests of International Paper and its shareholders because the Transactions would provide a number of key benefits, including primarily: (i) greater strategic focus of resources and management’s efforts for each of International Paper and for the combined company, (ii) the special payment, (iii) direct and differentiated access by each of International Paper and the combined company to capital resources and (iv) increased value to International Paper’s shareholders, in particular the combined company’s anticipated value on a stand-alone basis. In assessing and approving the Transactions, International Paper considered the unavailability of alternative transactions that would produce similar or better results for International Paper and its shareholders, and the spinoff’s facilitating the strategic combination of the xpedx and Unisource businesses. See “The Transactions—International Paper’s Reasons for the Transactions.”
Q: Why did International Paper decide not to separate SpinCo into a stand-alone public company and instead engage in the Transactions with Unisource?
A: International Paper decided to pursue the Transactions with Unisource rather than a stand-alone spin-off or split-off transaction involving the xpedx business because it determined that the expected value to International Paper and its shareholders from pursuing the Transactions was greater than the value to International Paper and its shareholders of a stand-alone spin-off or split-off of the xpedx business. The principal factor considered by International Paper in reaching this decision, in addition to the factors noted above, was Unisource’s business and prospects, after giving effect to the proposed acquisition by SpinCo, including expected synergies to be realized as a result of a combination of xpedx and Unisource.
 
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The principal countervailing factors considered by International Paper in its deliberations concerning the Transactions were:
 
 	•	 	the fact that the Unisource transaction necessarily involved another party and therefore presented execution risks that would not be present in a single party transaction like a spin-off or split-off;	
 
 	•	 	the possibility that the Unisource business will not perform in the anticipated manner; and	
 
 	•	 	risks relating to integrating the xpedx business with Unisource’s current operations and the potential effects on the value of SpinCo common stock to be received in the Transactions.	
After consideration of the above factors and based on information furnished by Unisource to International Paper, particularly in respect of synergies SpinCo expected to realize in the Transactions, and the terms of the Transaction Agreements as finally negotiated by International Paper, International Paper concluded that the expected value to International Paper and its shareholders from pursuing the Transactions was greater than the value to International Paper and its shareholders of a stand-alone spin-off or split-off of the xpedx business. See “The Transactions.”
Q: What will I receive in the Transactions?
A: Each share of International Paper common stock outstanding as of the record date will entitle its holder to receive a number of shares of SpinCo common stock, as determined by a formula based on the number of International Paper shares of common stock outstanding at 5:00 p.m., New York City time, on the record date. Each such holder will receive a number of SpinCo shares of common stock equal to the percentage of the total number of SpinCo shares of common stock outstanding as of the time of the Distribution as is equal to a fraction, (a) the numerator of which is the total number of issued and outstanding International Paper shares of common stock held by such holder as of the record date and (b) the denominator of which is the total number of International Paper shares of common stock issued and outstanding as of the record date (excluding treasury shares held by International Paper and any other International Paper shares otherwise held by International Paper or one of its subsidiaries). Based on the number of International Paper shares of common stock outstanding as of June 9, 2014, we expect the distribution ratio to be approximately 0.0188 SpinCo shares for each International Paper share of common stock. Although the number of International Paper shares of common stock outstanding may increase or decrease prior to the record date and as a result this distribution ratio may change, it will nonetheless result in International Paper shareholders owning approximately 51%, and the UWWH Stockholder owning approximately 49%, of the common stock of SpinCo on a fully-diluted basis immediately following the Merger. International Paper shareholders will not receive any new shares of common stock of SpinCo in the Merger and will continue to hold the SpinCo shares they received in the Distribution.
Q: What International Paper shareholder approvals are required?
A: None. No International Paper shareholder approvals are required for the Transactions. International Paper, as the sole shareholder of SpinCo and the sole member of xpedx Intermediate, must approve the Merger and the Subsidiary Merger, the UWWH Stockholder must approve the Merger and UWW’s sole shareholder must approve the Subsidiary Merger, which each of them did promptly after the Merger Agreement was signed. International Paper shareholders are not required to take any action to approve the Distribution or the Merger. After the Merger, SpinCo will mail to the holders of International Paper common stock who are entitled to receive shares of SpinCo common stock book-entry statements evidencing their ownership of SpinCo common stock, cash payments in lieu of fractional shares (if any) and related tax information, and other information regarding their receipt of SpinCo common stock.
No International Paper shareholder will be required to pay any cash or other consideration for shares of SpinCo common stock received in the Distribution, or to surrender or exchange International Paper shares in order to receive shares of SpinCo common stock and they should not return their International Paper stock certificates. The Transactions will not result in any changes in International Paper shareholders’ ownership of
 
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International Paper common stock. No vote of International Paper shareholders is required or sought in connection with the Distribution or Merger, and International Paper shareholders will have no appraisal rights in connection with the Transactions.
Q: How will International Paper distribute SpinCo shares of common stock?
A: Holders of International Paper common stock as of the record date will receive shares of SpinCo common stock in book-entry form. See “The Transactions.”
Q: What is the record date for the Distribution?
A: Record ownership will be determined as of 5:00 p.m., New York City time, on June 20, 2014, which we refer to as the record date.
Q: When will the Transactions occur?
A: The date of the Distribution is expected to be on or about July 1, 2014, which we refer to as the distribution date. The Merger will occur immediately thereafter, and the Subsidiary Merger will occur immediately after the Merger. We expect that it will take the distribution agent, acting on behalf of International Paper, up to three business days after the distribution date to fully distribute our common stock to International Paper shareholders.
Q: Are there any conditions to the consummation of the Transactions?
A: Yes, the consummation of the Transactions is subject to the satisfaction or waiver (to the extent permitted by applicable law) of a number of conditions, including (i) SpinCo’s receipt of the proceeds from the special payment financing in an amount sufficient to pay the special payment, and International Paper’s receipt of the special payment from SpinCo, (ii) receipt of the IRS ruling by International Paper, (iii) the International Paper board of directors’ receipt of a solvency opinion with respect to International Paper and SpinCo, (iv) this registration statement having been declared effective and the approval for listing on the New York Stock Exchange of SpinCo common stock to be issued in the Merger, (v) subject to certain exceptions, the accuracy of representations and warranties in the Merger Agreement, (vi) receipt of customary tax opinions and (vii) the absence of a material adverse effect on xpedx and Unisource since June 30, 2013. In addition, the consummation of the Merger is subject to the Contribution and Distribution having occurred pursuant to the terms of the Contribution and Distribution Agreement. This prospectus describes these conditions in more detail in “The Merger Agreement—Conditions to Consummation of the Merger” and “The Contribution and Distribution Agreement and the Ancillary Agreements—Contribution and Distribution Agreement—Conditions to the Completion of the Spin-off” and “—Termination.”
Q: What will happen to the listing of my International Paper common stock?
A: Nothing. International Paper common stock will continue to be traded on the NYSE under the symbol “IP”.
Q: Will the spin-off affect the trading of my International Paper common stock?
A: Until the market has fully analyzed the value of International Paper without the xpedx business, the price of International Paper common stock may fluctuate. In addition, it is anticipated that shortly before the record date and through the distribution date, there will be two markets in International Paper common stock: a “regular way” market and an “ex-distribution” market. International Paper common stock that will trade on the regular way market will trade with an entitlement to SpinCo common stock distributed pursuant to the Distribution. Stock that trades on the ex-distribution market will trade without an entitlement to SpinCo common stock distributed pursuant to the Distribution. See “The Transactions—Listing and Trading of Our Common Stock.”
 
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Q: What if I want to sell my International Paper common stock or my SpinCo common stock?
A: You should consult with your financial advisors, such as your stockbroker, bank or tax advisor. Neither International Paper nor SpinCo makes any recommendations on the purchase, retention or sale of International Paper common stock or the SpinCo common stock to be distributed in the Distribution.
If you decide to sell any stock before the Distribution, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your International Paper common stock or the SpinCo common stock you will receive in the Distribution or both. If you sell your International Paper common stock in the “regular way” market up to and including the distribution date, you will be selling your right to receive SpinCo common stock in the Distribution. However, if you own International Paper common stock as of 5:00 p.m., New York City time, on the record date and sell those shares in the “ex-distribution” market up to and including the distribution date, you will still receive the SpinCo common stock that you would be entitled to receive in respect of the International Paper common stock you owned as of 5:00 p.m., New York City time, on the record date. See “The Transactions—Listing and Trading of our Common Stock.”
Q: How will fractional shares be treated in the spin-off?
A: Holders of International Paper common stock will not receive fractional shares in connection with the spin-off. Instead, the distribution agent will sell whole shares that otherwise would have been distributed as fractional shares of SpinCo in the open market at prevailing market prices and distribute the aggregate cash proceeds of the sales, net of brokerage fees and similar costs, pro rata to each International Paper shareholder who would otherwise have been entitled to receive a fractional share in the Distribution. The receipt of cash in lieu of fractional shares will generally be taxable to the recipient shareholder. See “The Transactions—Manner of Effecting the Distribution.”
Q: Who will serve on the board of directors of the combined company?
A: Pursuant to the terms of the Contribution and Distribution Agreement, immediately prior to the distribution date, International Paper will cause to be elected the following individuals who have been agreed upon by International Paper and the UWWH Stockholder as the initial members of SpinCo’s board of directors: Allan R. Dragone, Jr., Daniel T. Henry, Mary A. Laschinger, Tracy A. Leinbach, Seth A. Meisel, William E. Mitchell, Michael P. Muldowney, Charles G. Ward, III and John J. Zillmer. Pursuant to the terms of the Merger Agreement, these individuals will constitute the board of directors of SpinCo following the Merger, and the majority of SpinCo’s directors will be independent, as determined in accordance with the criteria for independence required by the NYSE. See “Management of SpinCo Following the Transactions—Directors.”
Q: Who will manage the business of the combined company following the Merger?
A: Following the Merger, the business of the combined company will be managed by Mary A. Laschinger, a current Senior Vice President of International Paper and President of xpedx who will be Chief Executive Officer and Chairman of the combined company. The senior management of the combined company will also include Stephen J. Smith, Senior Vice President and Chief Financial Officer; Charles B. Henry, Senior Vice President Integration and Change Management; Mark W. Hianik, Senior Vice President, General Counsel and Corporate Secretary; Timothy D. Kutz, Senior Vice President Supply Chain; Thomas S. Lazzaro, Senior Vice President Field Sales and Operations; Joseph B. Myers, Senior Vice President Facility Solutions, Strategy and Commercial Excellence; Barry R. Nelson, Senior Vice President Publishing and Print Management; Elizabeth Patrick, Senior Vice President and Chief Human Resources Officer; Neil Russell, Senior Vice President Corporate Affairs; Darin W. Tang, Senior Vice President Packaging; and Daniel J. Watkoske, Senior Vice President Print. See “Management of SpinCo Following the Transactions—Executive Officers.”
 
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Q: What will be the indebtedness of the combined company following completion of the Transactions?
A: In connection with the Transactions, assuming the closing of the Transactions as of March 31, 2014, subsidiaries of SpinCo will incur an amount of indebtedness equal to approximately $698.9 million. This indebtedness will consist of borrowings under the ABL Facility, which will be used to fund the special payment to International Paper, described below, to repay certain outstanding indebtedness of Unisource and to pay related fees and expenses. Based upon Unisource’s outstanding indebtedness as of March 31, 2014, assuming the closing of the Transactions as of March 31, 2014, we expect that, immediately following the Merger, the combined company will have approximately $791.6 million in total indebtedness, including the new borrowings of $698.9 million under the ABL Facility, $70.5 million of capital lease obligations (exclusive of the non-monetary portion) and $22.2 million of Unisource Canadian bank overdrafts. See “Capitalization.”
Q: What is the current relationship between SpinCo and both International Paper and Unisource?
A: SpinCo is currently a wholly-owned subsidiary of International Paper and was incorporated as a Delaware corporation in order to effect the separation of the xpedx business from International Paper. Other than in connection with the Transactions, there is currently no relationship between SpinCo and Unisource. After the Transactions, SpinCo or its subsidiaries will be a party to certain commercial arrangements with International Paper and Georgia-Pacific.
Q: How will the rights of shareholders of SpinCo and International Paper change after the Merger?
A: The rights of shareholders of SpinCo will not change as a result of the Merger. The rights of shareholders of International Paper will also remain the same as prior to the Merger, except that shareholders of International Paper will also receive shares of SpinCo common stock and cash paid in lieu of fractional shares in the Transactions.
Following the Transactions, International Paper shareholders will continue to own all of their shares of International Paper common stock. Their rights as International Paper shareholders will not change, except that their shares of International Paper common stock will represent an interest in International Paper that no longer includes the ownership and operation of the xpedx business (but will include receipt by International Paper of the special payment). International Paper shareholders will also separately own stock of the combined company, which will include the combined business operations of Unisource and xpedx.
Q: Will the Transactions affect employees and former employees of International Paper who hold International Paper stock options and other stock-based awards?
A: International Paper granted stock options in 2004, which have expiration dates of May 10, 2014 and October 11, 2014. These options are currently fully vested. Employees of International Paper who hold International Paper options will retain the options and will not be granted SpinCo options (as replacement for such International Paper options) in connection with the Transactions. No adjustment to International Paper options or exercise prices will be made by reason of the Transactions. Any outstanding options held by employees of International Paper who will be employed by SpinCo following the closing of the Transactions will be treated by International Paper in accordance with the terms of the relevant International Paper equity incentive plan as though each employee incurred a termination of employment without cause from International Paper as of the closing of the Transactions.
Certain International Paper employees hold International Paper Performance Share Plan (“PSP”) awards pursuant to which an employee has been granted units that are paid in International Paper common stock at the end of a three-year period. The amounts earned under the PSP fluctuate based on the performance of International Paper, measured at the end of each year in the three-year period. No adjustment to the performance metrics of the PSP awards by reason of the Transactions is currently contemplated. International Paper
 
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employees who will be employed by SpinCo following the Transactions will continue to hold the 2012, 2013, and 2014 grants through the remainder of the performance period. The amounts to which these individuals will be entitled will be based on International Paper’s actual performance during the performance period but will be prorated based on the period of time from the grant date through the occurrence of the Transactions. Payments in respect of these awards will be paid in February of the year following the end of the relevant three-year period (e.g., the employee’s pro rata portion of the 2012 grant will be paid in February 2015).
Certain employees of International Paper also hold restricted shares of International Paper common stock. No SpinCo shares will be received by holders of restricted shares, nor will there be any adjustment to International Paper restricted stock made for the value of SpinCo. Other than Mary A. Laschinger, Chief Executive Officer of SpinCo, no employee of the xpedx business currently holds International Paper restricted stock awards. The awards of restricted stock currently held by Ms. Laschinger will vest by reason of the Transactions.
Q: Will there be any payments by SpinCo to International Paper in connection with the Distribution?
A: Yes, pursuant to the Contribution and Distribution Agreement, SpinCo is required to make a special payment to International Paper of $400 million, subject to adjustment based on estimates of changes in the net working capital and net indebtedness of the xpedx business and Unisource, and the transaction expenses of Unisource. If the sum of the changes in net working capital and net indebtedness of the xpedx business represents a positive change in the value of the xpedx business, the special payment to International Paper will be increased by such amount. If that amount represents a negative change in the value of the xpedx business, the special payment to International Paper will be reduced by such amount. Pursuant to the Contribution and Distribution Agreement and the Merger Agreement, if the sum of the Unisource transaction expenses in excess of $15 million and changes in the net working capital and net indebtedness of Unisource represents a positive change in the value of Unisource, SpinCo will pay such amount to the UWWH Stockholder. If that amount represents a negative change in the value of Unisource, the special payment to International Paper will be increased by a corresponding amount. See “The Contribution and Distribution Agreement and the Ancillary Agreements—Contribution and Distribution Agreement—Working Capital and Net Indebtedness Adjustments.”
Q: Will there be post-closing adjustments in connection with the Distribution?
A: Yes, pursuant to the Contribution and Distribution Agreement and the Merger Agreement, after the Merger, the parties will determine the actual amount of Unisource transaction expenses, net working capital and net indebtedness and, if such actual amounts differ from the estimated amounts, a corresponding payment will be made to the applicable party. See “The Contribution and Distribution Agreement and the Ancillary Agreements—Contribution and Distribution Agreement—Working Capital and Net Indebtedness Adjustments.”
Q: What are the U.S. federal income tax consequences to me of the Distribution?
A: International Paper has received the IRS ruling to the effect that the Distribution will qualify as tax-free under Sections 355 and 361 of the Code. The IRS ruling also provides that the Merger, the Subsidiary Merger and certain internal transactions undertaken in anticipation of the Distribution will qualify for tax-free treatment under the Code. In addition to obtaining the IRS ruling, International Paper expects to receive an opinion from Debevoise confirming the tax-free status of the Distribution for U.S. federal income tax purposes, which opinion will rely on the IRS ruling as to matters covered by the IRS ruling. The IRS ruling and such opinion will rely on certain facts and assumptions, and certain representations and undertakings, provided by us, International Paper and Unisource regarding the past and future conduct of our business and other matters.
Assuming that the Distribution qualifies as tax-free under Section 355 of the Code, for U.S. federal income tax purposes no gain or loss will be recognized by an International Paper shareholder upon the receipt of our
 
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common stock pursuant to the Distribution, except for any gain or loss attributable to cash received in lieu of a fractional share. International Paper shareholders will not recognize any gain or loss for U.S. federal income tax purposes as a result of the Merger.
See “The Transactions—Material U.S. Federal Income Tax Consequences of the Transactions” and “Risk Factors—Risks Relating to the Transactions—If the spin-off does not qualify as a tax-free spin-off under Section 355 of the Code, including as a result of subsequent acquisitions of stock of International Paper or SpinCo, then International Paper and/or the International Paper shareholders may be required to pay substantial U.S. federal income taxes.”
Each International Paper shareholder is urged to consult his, her or its tax advisor as to the specific tax consequences of the Distribution or the Merger to that shareholder, including the effect of any state, local or non-U.S. tax laws and of changes in applicable tax laws.
Q: How will I determine the tax basis I will have in the SpinCo shares of common stock I receive in this distribution?
A: Generally, for U.S. federal income tax purposes, your aggregate basis in the shares of common stock you hold in International Paper and the new shares of SpinCo common stock received in the Distribution (including any fractional shares in SpinCo for which cash is received) will equal the aggregate basis of International Paper common stock held by you immediately before the Distribution. This aggregate basis will be allocated among your International Paper common stock and the SpinCo common stock you receive in the Distribution (including any fractional shares in SpinCo for which cash is received), in proportion to the relative fair market value of each immediately following the Distribution. See “The Transactions—Material U.S. Federal Income Tax Consequences of the Transactions” for more information.
Q: Does SpinCo intend to pay cash dividends?
A: No, we do not currently expect to declare or pay dividends on our common stock for the foreseeable future. See “Dividend Policy.” Furthermore, we are restricted under the Contribution and Distribution Agreement from declaring or paying special dividends through the second anniversary of the Closing Date (or, in certain circumstances, January 1, 2016). See “The Contribution and Distribution Agreement and The Ancillary Agreements—Contribution and Distribution Agreement—Additional Post-Closing Covenants.”
Q: How will SpinCo shares trade?
A: Currently, there is no public market for our common stock. We have applied to list our common stock on the NYSE under the symbol “ VRTV ”.
We anticipate that trading will commence on a “when-issued” basis on or shortly prior to the record date and before the distribution date. When-issued trading in the context of a spin-off refers to a sale or purchase of securities effected on or before the distribution date and made conditionally because the securities of the spun-off entity have not yet been distributed. When-issued trades generally settle within four trading days of the distribution date. On the first trading day following the distribution date, any when-issued trading in respect of SpinCo common stock will end and “regular-way” trading will begin. Regular-way trading refers to trading after the security has been distributed and typically involves a trade that settles on the third full trading day following the date of the sale transactions. See “The Transactions—Listing and Trading of Our Common Stock.”
Q: Do I have appraisal rights?
A: No. Holders of International Paper common stock are not entitled to appraisal rights in connection with the Transactions.
 
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Q: Who will be the transfer agent for SpinCo shares?
A: Computershare Inc. will be the transfer agent for SpinCo shares.
Q: Are there risks associated with owning SpinCo common stock upon consummation of the Transactions?
A: Our business is subject to both general and specific risks and uncertainties relating to the xpedx business and Unisource’s business. Our business is also subject to risks relating to the Transactions. Accordingly, you should read carefully the information set forth in the section entitled “Risk Factors.”
Q: Where can I get more information?
A: If you have any questions relating to the mechanics of the Distribution, you should contact the distribution agent at:
Computershare Inc.
250 Royall Street
Canton, MA 02021
Tel: (800) 522-6645
Before the Distribution and the Merger, if you have any questions relating to the Distribution or the Merger, you should contact International Paper at:
International Paper Company
Attn: Investor Relations
6400 Poplar Ave.
Memphis, TN 38197
Tel: (901) 419-4352
www.internationalpaper.com
 
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 PROSPECTUS SUMMARY
The following summary highlights information contained elsewhere in this prospectus relating to the Transactions. You should read this entire prospectus including the risk factors, our and Unisource’s management’s discussion and analysis of financial condition and results of operations, our and Unisource’s historical financial statements, and our unaudited pro forma condensed combined financial statements and the respective notes to those historical and pro forma financial statements.
Our historical combined financial data have been prepared on a “carve-out” basis to reflect the operations, financial condition and cash flows specifically allocable to the xpedx business of International Paper during all periods shown. Our pro forma combined financial data adjust our historical combined financial data to give effect to the Transactions and our anticipated post-Transactions capital structure.
Except as otherwise indicated or the context otherwise requires, the information included in this prospectus assumes the completion of the Transactions.
The Companies
xpedx
xpedx is a leading business-to-business printing, packaging and facility supplies and equipment distribution business. Through its three operating segments, Print, Packaging and Facility Solutions, xpedx offers an extensive portfolio of nationally recognized, high quality public and private brands of paper, graphics, packaging and facility supplies primarily in the United States and Mexico.
The Print segment includes the sale and distribution of printing and communication papers, publishing papers, digital papers, specialty papers, graphics consumables, wide format papers and substrates, graphics equipment and related equipment installation and service. The Packaging segment includes the design, sourcing, sale and distribution of customized packaging and packing equipment and the sale and distribution of custom and standard corrugated boxes, shrink and stretch films, tape, strapping, cushioning, labels, bags, mailers, molded fiber, bio-polymer and plastics and packaging equipment and related equipment installation and service. The packaging segment also includes fulfillment and contract packaging services. The Facility Solutions segment markets and sells products necessary to maintain large public facilities, including hand towel and bathroom tissue, cleaning chemicals, disinfectants, skin care products, safety and hazard products, trash bags and receptacles, sanitary maintenance supplies, facilities maintenance equipment and related equipment installation and service.
Products and equipment are sourced from approximately 6,000 vendors in the United States and approximately 600 vendors in Mexico as of December 31, 2013, with xpedx serving as an important distribution channel for these vendors. As of December 31, 2013, the xpedx network consists of 86 strategically located distribution centers in 39 states and Mexico and a fleet of approximately 1,500 trucks and trailers travelling approximately 32 million miles annually in the United States. xpedx markets and distributed these supplies, products and services to more than 58,000 customer locations as of December 31, 2013, including printers, publishers, data centers, manufacturers, higher education institutions, contract packaging/fulfillment providers, healthcare facilities, print design agencies, sporting and performance arenas, retail stores, government agencies, property managers and building service contractors, through more than 1,150 sales professionals, equipment representatives and service technicians.
Unisource
Unisource is a leading distributor of printing and business paper products, packaging supplies and equipment, and facility supplies and equipment, primarily in the United States and Canada, with additional

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international operations in Europe, Asia and Latin America. Through its six business units, U.S. Distribution, Canada Distribution, Graphic Communications, Rollsource, PaperPlus and Unisource Global Solutions, Unisource operates in four primary product categories: Print, Packaging, Facility Supplies and Other.
The Print product category includes the sale and distribution of high-quality commercial printing, writing, copying and digital printing paper to commercial printers, retailers, publishers, business form manufacturers, direct mail firms and the digital printing industry, as well as corporate and retail copy centers, in-plant print facilities, government institutions and other paper-intensive businesses. The Packaging product category includes the sale and distribution of consumer goods packaging, packaging for industrial or manufacturing components and point-of-sale displays, as well as the sale and distribution of single function or fully automated packaging machines. The Facility Supplies product category includes the sale and distribution of products such as towels, tissues, wipers and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities from leading manufacturers. In the Other category, Unisource provides third-party logistics services, which includes freight brokerage, material handling, warehousing and kitting.
Products and equipment are sourced in North America, Europe and Asia from approximately 2,800 vendors in the United States, approximately 600 vendors in Canada and approximately 100 vendors in Europe and Asia, with Unisource serving as an important North American distribution channel for many of these vendors. Unisource sells its products to a diverse customer base of approximately 48,000 customers, based on customer bill-to locations, including building service contractors, catalog and direct mail providers, commercial printers, consumer goods providers, cruise lines, food processors, healthcare providers, higher education institutions, government agencies, fulfillment, hotels and resorts, manufacturers and property managers, through approximately 760 sales representatives. Unisource provides supply chain management through its 93 distribution centers, providing next-day services to most major metropolitan areas in the United States and Canada.
Transaction Rationale
Size and Scale
By combining two well-established businesses, we anticipate that the Transactions will create a North American business-to-business distribution company with a broad geographic reach, extensive product offerings and a differentiated and leading service platform. On a combined basis, the two companies conduct business with more than half of the Fortune 500 companies and their subsidiaries in the United States and Canada. We expect the Transactions to strengthen the combined company’s relationships with suppliers and customers by:
 
 	•	 	expanding our reach to multi-location customers that value a broader, national footprint;	
 
 	•	 	enhancing our supply chain capabilities with greater scale; and	
 
 	•	 	providing greater sourcing strategies.	
Expertise
We anticipate that the combined company will be able to deliver a greater breadth of expertise in the following:
 
 	•	 	Print —a fully integrated national distributor with expertise in paper, graphics, equipment and print management. On a combined basis, management estimates that coated paper, uncoated paper, text, cover and writing, coated board and carbonless would have been the combined company’s top five product categories in the print market in 2013 and would have represented approximately 49%, 29%, 9%, 3% and 3% of sales, respectively;	

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 	•	 	Packaging —a full service platform for designing, sourcing and delivering commodity and specialty packaging, which we believe will enable the combined company to provide solutions to customers at every point in the packaging process, including design, engineering, materials, equipment, workflow and logistics. On a combined basis, management estimates corrugated, support materials, films, cushioning and tapes would have been the combined company’s top five product categories in the packaging market in 2013 and would have represented approximately 24%, 24%, 18%, 9% and 9% of sales, respectively;	
 
 	•	 	Facility Solutions —a comprehensive facility solution to help customers maintain a safe, clean, healthy and productive environment. On a combined basis, management estimates towels, tissues and wipes, food service, chemicals (cleaning), can liners and office and school supplies would have been the combined company’s top five product categories in the facilities solutions market in 2013 and would have represented approximately 33%, 21%, 9%, 8% and 8% of sales, respectively; and	
 
 	•	 	Other —a third-party logistics service, including supply chain solutions, freight brokerage, warehousing and kitting.	
Synergies
We expect that the Merger will provide significant opportunities for the combined company to capture cost savings and other synergies. We are targeting annual cost savings and other synergies in the range of approximately $150 million to $225 million, which we anticipate will be fully realized by the end of 2018. We anticipate cost savings and other synergies in the following areas: overhead, strategic sourcing, supply chain efficiencies, optimizing the ability to service customers and reduction of fixed costs (e.g. warehouse rationalization). We currently expect the one-time costs associated with achieving these cost savings and other synergies to be approximately $225 million over a five-year period. We currently expect to realize 15-25% of the net synergies from this transaction in fiscal 2015, 50-60% in fiscal 2016 and 80-90% in fiscal 2017.
Stable Platform with Improved Strategic Prospects
We expect that the combination of xpedx and Unisource will strengthen the combined company’s overall business platform and provide improved opportunities for strategic options as a combined enterprise. Additional advantages to the combination include:
 
 	•	 	xpedx’s and Unisource’s complementary businesses;	
 
 	•	 	minimal customer overlap between the businesses;	
 
 	•	 	strong relationships with each company’s customers and suppliers;	
 
 	•	 	better positioning the combined company to manage through the secular decline in the print segment; and	
 
 	•	 	an enterprise better able to take advantage of strategic opportunities, including acquisitions.	
Strategies
Following the completion of the Transactions, we intend to enhance the combined company’s strong market position by implementing the following key elements of our business strategy:
Continue to Pursue Distribution Excellence
We believe the combined company’s supply chain and enterprise capabilities will enhance its customer and supplier relationships and enable it to maintain the strong market positions that the xpedx and Unisource businesses enjoy in the print, packaging and facilities solutions markets. The combined company intends to foster a culture of continuous improvement to drive its employees to provide exceptional value to customers and suppliers.

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Capitalize on Growth Opportunities to Maintain Leadership Position
 
 	•	 	Print : We expect the combined company to leverage its scale and leading market position to continue to offer a comprehensive selection of paper products to its customers and to seek operational efficiencies.	
 
 	•	 	Packaging : We expect that the combined company will focus on providing value-added services to its customers, including kitting and packaging design. The combined company expects to expand its packaging design capabilities through design centers which allow customers to design custom packaging, environmentally-friendly products and molded fiber solutions. The combined company also plans to increase the number of sales professionals to help accelerate growth in this business segment as demand for packaging expands. The combined company believes its national footprint will allow it to effectively serve its customers.	
 
 	•	 	Facility Solutions : The facilities solutions businesses of both xpedx and Unisource have historically provided customers with a wide range of products, including products under private label brands, a higher margin business that we expect the combined company will seek to grow. We also believe the facility solutions segment will provide opportunities for the combined company to cross-sell its products to Packaging customers and leverage its national footprint to serve large customers.	
Maintain Sales and Improve Profitability
The combined company expects to focus on achieving the cost savings and synergies presented by combining the xpedx and Unisource businesses, including streamlining the combined company to eliminate redundancies. While we expect that sales for the combined company will be relatively flat over the next few years with some variation within the segments, we anticipate the combined company will concentrate on opportunities to grow its sales and improve profitability. Management of the combined company further expects that Adjusted EBITDA in 2014 for the combined business will be approximately $135 million to $145 million, and expects incremental annual improvements in Adjusted EBITDA over the next few years, with an expected improvement of approximately $100 million by the end of 2017, driven primarily by anticipated realization of cost savings and synergies. No assurances can be given that the combined company will achieve these results. See “Risk Factors—Risks Relating to the Transactions—Actual results may be materially lower than the financial forecasts contained in this prospectus.”
Industry Overview
We expect that the consummation of the Transactions will create a North American market leader by combining two leaders of the printing, packaging and facility supplies and equipment distribution business. We believe over the next several years the packaging and facilities solutions markets will experience moderate growth while the print market will remain flat or decline, triggering a shift in business mix to higher margin growth segments. The markets we serve are highly fragmented, which we believe will allow the combined company to leverage its scale to expand.
Print
The print market has declined over the last few years as demand for paper and related products has waned due to the widespread use of email and permanent product substitution. Despite these challenges, we expect the combined company to capitalize on emerging trends, including wide format printing, synthetic substrates, direct sales to corporate end users and the demand from retail and small order printers. In addition, we expect the combined company will have a leading market position in the fragmented print market. The combined company would have accounted for more than one-third of the distributor-served print market in the United States and Canada in 2013, based on industry data from the American Forest and Paper Association, and RISI and internal management estimates of revenue and volume. Management believes that the combined company’s

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approximate 20% to 30% market share of the wider print market (excluding newsprint), inclusive of both distributor-served and direct-from-manufacturer represents an opportunity to grow share in underserved channels. Management estimates that on a combined basis, printing and publishing, retail trade, manufacturing, distribution and graphic design and advertising would have been the combined company’s top five end markets in the print market in fiscal 2013 and would have represented approximately 46%, 14%, 4%, 4% and 4% of sales, respectively.
Packaging
The packaging market includes, among other products and services, the design, sourcing, sale and distribution of customized multi-substrate packaging and packaging equipment and the sale and distribution of custom and standard corrugated boxes. Packaging consumption in North America in 2012 was estimated to be valued at more than $170 billion. Of that, paperboard, flexible packaging and other packaging materials was valued at more than $90 billion, giving the combined company an estimated market share of less than 3%. The distributor-served share of the packaging market is low, giving a market participant that brings high levels of value and service, along with access to many manufacturers and substrates, an opportunity to increase its share.
The paperboard packaging market is dominated by corrugated packaging. Based on management’s estimates, the North American market for corrugated packaging was worth more than $35 billion in 2012, giving the combined company an estimated market share of less than 2%. Demand for corrugated packaging is expected to increase over the next five years, according to industry sources. Management estimates that on a combined basis, manufacturing, retail trade, food manufacturing, distribution and transporting and warehousing would have been the combined company’s top five end markets in the packaging market in fiscal 2013 and would have represented approximately 24%, 12%, 10%, 10% and 8% of sales, respectively.
Facility Solutions
The downstream markets that have driven, and which we expect will continue to drive, growth in the facility solutions distribution industry, include janitorial/building services, higher education and healthcare. Increased enrollment in higher education and the aging United States population has led to increased demand for janitorial supplies in these institutional environments. We expect that the combined company’s vast product catalog, customized site surveys for higher education environments and team of healthcare facility advisors, combined with its approximate 6% market share in the United States and Canada in 2012, position it to be a leader in the growing facilities solutions market. Management estimates that on a combined basis, retail trade, distribution, entertainment and hospitality, manufacturing and healthcare would have been the combined company’s top five end markets in the facilities solutions market in fiscal 2013 and would have represented approximately 23%, 14%, 9%, 8% and 7% of sales, respectively.
Risk Factors
We face numerous risks related to, among other things, our business operations, our strategies, general economic conditions, competitive dynamics of the industry, our level of indebtedness, the legal and regulatory environment in which we operate, and our status as an independent public company following the Transactions. These risks are set forth in detail under the heading “Risk Factors.” If any of these risks should materialize, they could have a material adverse effect on our business, financial condition, results of operations or cash flows. We encourage you to review these risk factors carefully. Furthermore, this prospectus contains forward-looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those under the headings “Risk Factors” and “Note Regarding Forward-Looking Statements and Information.”

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Summary of the Transactions
We provide below a summary of the Transactions. See “The Transactions” for a more detailed description.
The following chart illustrates our organizational structure following the Transactions.

 
 
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The Distribution
 
Distributing company	International Paper Company. After the Distribution, International Paper will not own any shares of SpinCo.	
 
Distributed company	Veritiv Corporation, referred to herein as “SpinCo.”	
 
Record date	Record ownership will be determined as of 5:00 p.m., New York City time, on June 20, 2014.	
 
Distribution date	The distribution date is expected to be on or about July 1, 2014.	
 
Distribution ratio	Each share of International Paper common stock outstanding as of the record date will entitle its holder to receive a number of shares of SpinCo common stock determined by a formula based on the number of International Paper shares of common stock outstanding at 5:00 p.m. New York City time, on the record date. Each such holder will receive a number of SpinCo shares of common stock equal to the percentage of the total number of SpinCo shares of common stock outstanding as of the time of the Distribution as is equal to a fraction, (a) the numerator of which is the total number of issued and outstanding International Paper shares of common stock held by such holder as of the record date and (b) the denominator of which is the total number of International Paper shares of common stock issued and outstanding as of the record date (excluding treasury shares held by International Paper and any other International Paper shares otherwise held by International Paper or one of its subsidiaries). Based on the number of International Paper shares of common stock outstanding as of June 9, 2014, we expect the distribution ratio to be approximately 0.0188 shares of SpinCo common stock for each share of International Paper common stock. Promptly after the record date, we will issue a press release disclosing the actual distribution ratio. Although the number of International Paper shares of common stock outstanding may increase or decrease prior to the record date and as a result the distribution ratio may change, it will nonetheless result in International Paper shareholders as of the record date and their transferees owning approximately 51%, and the UWWH Stockholder owning approximately 49%, of the shares of SpinCo common stock on a fully-diluted basis immediately following the Merger.	
 
Securities to be distributed	All of the shares of common stock of SpinCo outstanding immediately prior to the Merger will be distributed pro rata to International Paper shareholders who hold International Paper common stock as of the record date. On the distribution date, 8,160,000 shares of our common stock will be distributed to International Paper shareholders. The number of SpinCo shares that International Paper will ultimately distribute to its shareholders will be reduced to the extent that cash payments are to be made in lieu of fractional shares, as described below.	

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The Distribution	On the distribution date, International Paper will cause the distribution agent to distribute the shares of SpinCo common stock to the International Paper shareholders as of the record date. The distribution of shares of SpinCo common stock will be made in book-entry form. It is expected that it will take the distribution agent up to three business days to electronically issue SpinCo shares to you or your bank or brokerage firm on your behalf by way of direct registration in book-entry form. You will not be required to make any payment, surrender or exchange your International Paper common stock or take any other action to receive your SpinCo common stock.	
 
No fractional shares	Holders of International Paper common stock will not receive any fractional shares of SpinCo common stock. In lieu of fractional shares of SpinCo, International Paper shareholders will receive a cash payment. To that end, the distribution agent will aggregate and sell whole shares that otherwise would have been distributed as fractional shares of SpinCo in the open market at prevailing market prices and distribute the aggregate cash proceeds of the sales, net of brokerage fees and similar costs, pro rata to each International Paper shareholder who would otherwise have been entitled to receive a fractional share of SpinCo, as applicable, in the Distribution. Recipients of cash in lieu of fractional shares will not be entitled to any interest on payments made in lieu of fractional shares. See “The Transactions—Manner of Effecting the Distribution.” The receipt of cash in lieu of fractional shares generally will be taxable to the recipient shareholders that are subject to U.S. federal income tax as described in “The Transactions—Material U.S. Federal Income Tax Consequences of the Transactions.”	
 
Conditions to the Distribution	The Distribution is subject to a number of important conditions. Under the terms of the Contribution and Distribution Agreement, the consummation of the Distribution is conditioned upon (i) SpinCo’s receipt of the proceeds from the completion of the special payment financing in an amount sufficient to pay the special payment, and International Paper’s receipt of the special payment from SpinCo, (ii) the satisfaction (or waiver by International Paper) of each of the conditions to International Paper’s obligation to effect the closing of the transactions contemplated by the Merger Agreement (other than the consummation of the Distribution) and (iii) each of International Paper, SpinCo and Unisource having irrevocably confirmed to the other that each of the conditions to its obligations to effect the closing of the Merger has been satisfied or waived and that it is prepared to proceed with the Merger. For a more detailed description of the Merger conditions see “The Merger Agreement—Conditions to Consummation of the Merger.”	
 
Special payment adjustment	Pursuant to the Contribution and Distribution Agreement, SpinCo is required to make a special payment to International Paper of $400 million, subject to adjustment based on estimates of changes in the net working capital and net indebtedness of the xpedx business and Unisource, and the transaction expenses of Unisource. If the sum of	

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 	the changes in the net working capital and net indebtedness of the xpedx business represents a positive change in the value of the xpedx business, the special payment to International Paper will be increased by such amount. If that amount represents a negative change in the value of the xpedx business, the special payment to International Paper will be reduced by such amount. Pursuant to the Contribution and Distribution Agreement and the Merger Agreement, if the sum of the Unisource transaction expenses in excess of $15 million and changes in the net working capital and net indebtedness of Unisource represents a positive change in the value of Unisource, SpinCo shall pay such amount to the UWWH Stockholder. If that amount represents a negative change in the value of Unisource, the special payment to International Paper will be increased by a corresponding amount. See “The Contribution and Distribution Agreement and the Ancillary Agreements—Contribution and Distribution Agreement—Working Capital and Net Indebtedness Adjustments.”	
 
Earnout Payment	The Contribution and Distribution Agreement provides that in 2020 the combined company may be required to pay to International Paper an earnout payment of up to $100 million if the combined company’s aggregate EBITDA for its 2017, 2018 and 2019 fiscal years exceeds an agreed-upon target, subject to certain adjustments. The amount of the earnout payment, if owed by the combined company, will be an amount equal to (i) the excess of the combined company’s aggregate EBITDA for its 2017, 2018 and 2019 fiscal years over the agreed-upon target, (ii) multiplied by four divided by three, capped at $100 million in the aggregate. The earnout payment may also be due in certain other circumstances. See “The Contribution and Distribution Agreement and the Ancillary Agreements—Contribution and Distribution Agreement—Earnout Payment.”	
 
Trading market and symbol	We have applied to list our common stock on the NYSE under the ticker symbol “VRTV”. We anticipate that, on or shortly before the record date for the Distribution, trading of SpinCo common stock will begin on a “when-issued” basis and will continue up to and including the distribution date. See “The Transactions—Listing and Trading of Our Common Stock.”	
 
Dividend policy	We do not currently expect to declare or pay dividends on our common stock for the foreseeable future. See “Dividend Policy.”	
 
Tax consequences of the Distribution to International Paper shareholders	International Paper has received a private letter ruling from the IRS to the effect that the Distribution will qualify as tax-free under Sections 355 and 361 of the Code. The IRS ruling also provides that the Merger, the Subsidiary Merger and certain internal transactions undertaken in anticipation of the Distribution will qualify for tax-free treatment under the Code. In addition to obtaining the IRS ruling, International Paper expects to receive an opinion from Debevoise confirming the tax-free status of the Distribution for U.S. federal	

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 	income tax purposes, which opinion will rely on the IRS ruling as to matters covered by the IRS ruling. The IRS ruling and such opinion will rely on certain facts and assumptions, and certain representations and undertakings, provided by us, International Paper and Unisource regarding the past and future conduct of our respective business and other matters.	
 
 	Assuming that the Distribution qualifies as tax-free under Section 355 of the Code, for U.S. federal income tax purposes no gain or loss will be recognized by an International Paper shareholder upon the receipt of our common stock pursuant to the Distribution, except for any gain or loss attributable to cash received in lieu of a fractional share.	
 
 	See “The Transactions—Material U.S. Federal Income Tax Consequences of the Transactions” and “Risk Factors—Risks Relating to the Transactions—If the spin-off does not qualify as a tax-free spin-off under Section 355 of the Code, including as a result of subsequent acquisitions of stock of International Paper or SpinCo, then International Paper and/or the International Paper shareholders may be required to pay substantial U.S. federal income taxes.”	
 
 	Each International Paper shareholder is urged to consult his, her or its tax advisor as to the specific tax consequences of the Distribution to that shareholder, including the effect of any state, local or non-U.S. tax laws and of changes in applicable tax laws.	
 
Relationship with International Paper after the spin-off	We have entered into the Contribution and Distribution Agreement and shortly before the Distribution, we expect to enter into other agreements with International Paper related to the Transactions. These agreements will govern the relationship between SpinCo and International Paper subsequent to the completion of the Distribution and provide for the allocation between SpinCo and International Paper of various assets, liabilities and obligations (including employee benefits and tax-related assets and liabilities). The Contribution and Distribution Agreement, in particular, provides for the settlement or extinguishment of certain obligations between SpinCo and International Paper. We will enter into a Transition Services Agreement pursuant to which International Paper will provide certain services to SpinCo, and SpinCo will provide certain services to International Paper, on a transitional basis. Further, we have entered into the Tax Matters Agreement with International Paper which governs the rights and obligations of International Paper and SpinCo for certain tax liabilities with respect to periods or portions thereof ending on or before the date of the Distribution. The Tax Matters Agreement also contains certain restrictions with respect to the intended tax-free status of the Transactions and indemnification obligations on the part of SpinCo if the Transactions are not tax-free. We will enter into a supply agreement with International Paper pursuant to which International Paper will supply xpedx LLC with	

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 	certain printing and communications papers and coated paperboard and xpedx LLC will supply International Paper with certain products, in each case, for a period of 18 months. We describe these and related arrangements in greater detail under “The Contribution and Distribution Agreement and the Ancillary Agreements” and describe some of the risks of these arrangements under “Risk Factors—Risks Relating to the Transactions.”	
 
Distribution Agent	Computershare Inc., a Delaware corporation and its fully owned subsidiary, Computershare Trust Company, N.A., a national banking association.	
The Merger
 
Structure of the Merger	UWWH will merge with and into SpinCo, with SpinCo continuing as the surviving corporation, and xpedx Intermediate, which will be SpinCo’s direct, wholly-owned subsidiary, will merge with and into UWW, with UWW surviving the Subsidiary Merger as SpinCo’s direct, wholly-owned subsidiary. We expect the Mergers to be consummated sequentially and immediately following the Distribution and on the terms and subject to the other conditions of the Merger Agreement. The Merger Agreement provides that the Mergers will take place on the date of the Distribution (such date, the “Closing Date”).	
 
Primary purposes of the Transactions	International Paper determined that the Transactions would be in the best interests of International Paper and its shareholders because the Transactions would provide a number of key benefits, including primarily: (i) greater strategic focus of resources and management’s efforts for each of International Paper and for the combined company, (ii) the special payment, (iii) direct and differentiated access by each of International Paper and the combined company to capital resources and (iv) increased value to International Paper’s shareholders, in particular the combined company’s anticipated value on a stand-alone basis. In assessing and approving the Transactions, International Paper considered the unavailability of alternative transactions that would produce similar or better results for International Paper and its shareholders, and the spinoff’s facilitating the strategic combination of the xpedx and Unisource businesses. See “The Transactions—International Paper’s Reasons for the Transactions.”	
 
Consideration for the Merger	SpinCo shareholders will not receive any consideration in the Merger, and SpinCo will remain the parent company for the combined company. Each UWWH share of common stock outstanding as of July 1, 2014 will be converted into the right to receive a number of shares of SpinCo common stock in a private placement transaction, that will result in International Paper’s shareholders as of the record date and their transferees owning approximately 51% of the common stock of SpinCo, and the UWWH Stockholder owning approximately 49%, on a fully-diluted basis immediately following the Merger.	

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Approval of the Merger	No vote by International Paper shareholders is required or is being sought in connection with the Transactions. International Paper, as the sole shareholder of SpinCo, has already approved the Merger.	
 
Conditions to the Merger	The obligations of each party to consummate the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of certain conditions, including:	
 
 	•	 	the Contribution and Distribution having occurred pursuant to the terms of the Contribution and Distribution Agreement;	
 
 	•	 	SpinCo’s receipt of the proceeds from the special financing in an amount sufficient to pay the special payment, and International Paper’s receipt of the special payment from SpinCo;	
 
 	•	 	International Paper’s receipt of one or more private letter rulings from the IRS, which rulings shall be in full force and effect on the Closing Date, to the effect that (i) the transactions that comprise the Distribution will qualify as a “reorganization” within the meaning of Section 368(a)(1)(D) of the Code, (ii) International Paper will recognize no gain or loss under Section 361(c) of the Code upon the Distribution and (iii) International Paper’s shareholders will recognize no gain or loss under Section 355(a) of the Code upon the receipt of SpinCo shares in the Distribution;	
 
 	•	 	the receipt by International Paper’s board of directors of customary solvency and surplus opinions of a nationally recognized investment banking or appraisal firm;	
 
 	•	 	the effectiveness of the registration statement on Form S-1, of which this prospectus forms a part, and the approval of the listing of SpinCo common stock on the NYSE, subject to official notice of the issuance; and	
 
 	•	 	the absence of any order issued by any governmental authority of competent jurisdiction or other legal impediment preventing or making illegal the consummation of the Transactions.	
 
 	In addition, International Paper, SpinCo, xpedx Intermediate and xpedx LLC’s obligations to consummate the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of the following additional conditions, among others:	
 
 	•	 	the representations and warranties of the UWWH Stockholder, UWWH and UWW, disregarding all materiality or material adverse effect qualifications, being true and correct in all respects as of the effective time of the Merger as if made as of the effective time of the Merger (except to the extent such representations and warranties address matters as of a particular date, in which case as of such date), except where the failure to be true and correct has not had or would not, individually or in the aggregate, reasonably be expected to have, a material adverse effect on UWWH, its subsidiaries or the financial condition or results of operations of UWWH, taken as a whole, subject to certain exceptions, or the	

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 	ability of UWWH to consummate the Transactions and to perform its obligations under the Merger Agreement and the Transaction Agreements (a “UWWH MAE”) (other than certain representations and warranties which must be true and correct in all respects);	
 
 	•	 	the covenants and agreements being performed by the UWWH Stockholder, UWWH and UWW in all material respects at or prior to the effective time of the Merger (other than certain covenants and agreements which must be performed in all respects);	
 
 	•	 	the delivery by UWWH of an officer’s certificate certifying the satisfaction of the above conditions;	
 
 	•	 	the absence of a UWWH MAE since June 30, 2013;	
 
 	•	 	the receipt of a spin-off tax opinion by International Paper and SpinCo from legal counsel;	
 
 	•	 	the receipt of a tax opinion by International Paper and SpinCo from legal counsel to the effect that the Merger will constitute a “reorganization” for federal income tax purposes within the meaning of Section 368(a) of the Code;	
 
 	•	 	the entrance into and delivery of the applicable Transaction Agreements by the UWWH Stockholder and UWWH, which are in full force and effect;	
 
 	•	 	the delivery by the UWWH Stockholder of a certification that it is not a foreign person; and	
 
 	•	 	the termination of the advisory agreement among UWWH, UWW and Bain Capital, without liability to SpinCo or its subsidiaries.	
 
 	Furthermore, UWWH and UWW’s obligations to consummate the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of the following additional conditions, among others:	
 
 	•	 	the representations and warranties of International Paper, SpinCo, xpedx Intermediate and xpedx LLC, disregarding all materiality or material adverse effect qualifiers, being true and correct in all respects as of the effective time of the Merger as if made as of the effective time of the Merger (except to the extent such representations and warranties address matters as of a particular date, in which case as of such date), except where their failure to be true and correct has not had or would not, individually or in the aggregate, reasonably be expected to have, a material adverse effect on the xpedx business, SpinCo and its subsidiaries, International Paper or any of International Paper’s subsidiaries with respect to the xpedx business or the financial condition or results of operations of the xpedx business, taken as a whole, subject to certain exceptions, or the ability of International Paper or SpinCo and its subsidiaries to consummate the Transactions and to perform its obligations under the Merger Agreement and the Transaction Agreements (a “SpinCo MAE”) (other than certain representations and warranties which must be true and correct in all respects);	

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 	•	 	the covenants and agreements being performed by International Paper, SpinCo, xpedx Intermediate and xpedx LLC in all material respects at or prior to the effective time of the Merger (other than certain covenants and agreements, which must be performed in all respects);	
 
 	•	 	the delivery by each of International Paper and SpinCo of an officer’s certificate certifying the satisfaction of the above conditions;	
 
 	•	 	the absence of any SpinCo MAE since June 30, 2013;	
 
 	•	 	the receipt of a tax opinion by UWWH’s legal counsel, to the effect that (i) the Merger will constitute a “reorganization” for federal income tax purposes within the meaning of Section 368(a) of the Code and (ii) the Subsidiary Merger will qualify as a transfer of property to Unisource within the meaning of Section 351(a) of the Code;	
 
 	•	 	the entrance into and delivery of the applicable Transaction Agreements by International Paper, SpinCo, xpedx Intermediate and xpedx LLC, which are in full force and effect.	
 
 	Furthermore, the effective date of the registration statement of which this prospectus forms a part will be no earlier than the date on which SpinCo, as the surviving corporation, would be reasonably able to meet its obligations and requirements as a public company with securities listed on the NYSE and is otherwise reasonably prepared to operate as a standalone entity taking into account all resources available to it under the Transaction Agreements and on commercially reasonable terms from third parties.	
 
Termination of the Merger Agreement	The Merger Agreement may be terminated by:	
 
 	•	 	the mutual written consent of International Paper and UWWH;	
 
 	•	 	either of International Paper or UWWH if the effective time of the Merger has not occurred on or before January 5, 2015, unless the failure to effect the Merger by that date is due to the failure of the party seeking to terminate the Merger Agreement to perform its obligations set forth in the Merger Agreement;	
 
 	•	 	UWWH, if there has been a material breach by International Paper or SpinCo of any of its representations, warranties, covenants or agreements contained in the Merger Agreement, or any such representation and warranty has become untrue in any material respect, and such breach or inaccuracy has not been cured within 30 business days following notice of such breach (so long as UWWH is not then in material breach of any covenant, representation or warranty or other agreement contained in the Merger Agreement which breach would cause the closing conditions of International Paper or SpinCo not to be satisfied if the closing were to occur at the time of termination);	

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 	•	 	International Paper, if there has been a material breach by UWWH of any of its representations, warranties, covenants or agreements contained in the Merger Agreement, or any such representation and warranty has become untrue in any material respect, and such breach or inaccuracy has not been cured within 30 business days following notice of such breach (so long as International Paper is not then in material breach of any covenant, representation or warranty or other agreement contained in the Merger Agreement which breach would cause the closing conditions of UWWH or the UWWH Stockholder not to be satisfied if the closing were to occur at the time of termination); and	
 
 	•	 	any of the parties if any law or order of any governmental authority preventing or prohibiting the completion of the Transactions has become final and nonappealable.	
 
Termination fees and expenses	The Merger Agreement provides that, upon termination of the Merger Agreement under specified circumstances, certain termination fees may be payable:	
 
 	•	 	If International Paper terminates the Merger Agreement as described in the fourth bullet of the preceding section and an acquisition proposal for UWWH has commenced or is publicly disclosed, proposed or announced or otherwise communicated to UWWH or the UWWH Stockholder prior to such termination and within 15 months following such termination, UWWH or any of its subsidiaries enters into a definitive agreement with respect to such proposal, then UWWH must pay International Paper a $6 million termination fee.	
 
 	•	 	If UWWH terminates the Merger Agreement as described in the third bullet of the preceding section and an acquisition proposal for xpedx has commenced or is publicly disclosed, proposed or announced or otherwise communicated to International Paper or the International Paper shareholders prior to such termination and within 15 months following such termination, International Paper or SpinCo enters into a definitive agreement with respect to such proposal, then International Paper must pay UWWH a $6 million termination fee.	
 
Tax consequences to International Paper shareholders	International Paper shareholders are not expected to recognize any gain or loss for U.S. federal income tax purposes as a result of the Merger.	
 
 	Each International Paper shareholder is urged to consult his, her or its tax advisor as to the specific tax consequences of the Merger to that shareholder, including the effect of any state, local or non-U.S. tax laws and of changes in applicable tax laws.	
 
Accounting Treatment of the Transactions	SpinCo will be the accounting acquiror in the Merger. Accordingly, SpinCo will apply acquisition accounting to the assets acquired and liabilities assumed of Unisource upon consummation of the Merger. See “The Transactions—Accounting Treatment and Considerations.”	

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Financing
 
The ABL Facility	In connection with the Transactions, we will enter into an asset-based revolving facility that will provide for revolving loans in an aggregate principal amount of up to $1,400.0 million (subject to availability under a borrowing base). In connection with the Transactions, subsidiaries of SpinCo will borrow approximately $698.9 million under the ABL Facility, assuming the closing of the Transactions as of March 31, 2014. The proceeds of the initial borrowings under the ABL Facility will be used to make the special payment to International Paper, to refinance certain existing indebtedness of Unisource and to pay related fees and expenses. See “Description of Material Indebtedness.”	
 Market and Industry Data
 
This prospectus includes estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies, reports by market research firms and our own estimates based on our management’s knowledge of and experience in the market sectors in which we compete. We have not independently verified market and industry data from third party sources.		
 Trademarks
We use various trademarks, service marks and brand names that we deem particularly important to the advertising activities and operation of our various lines of business and some of these marks are registered in the United States and, in some cases, other jurisdictions. This prospectus also refers to the brand names, trademarks or service marks of other companies. All brand names and other trademarks or service marks cited in this prospectus are the property of their respective holders.
*  *  *  *  *
Veritiv Corporation is a Delaware corporation. Prior to the Transactions, our principal executive offices are located at 6400 Poplar Avenue, Memphis, Tennessee 38197, and our telephone number at that address is (901) 419-9000. Following the Transactions, we expect our principal executive offices will be located in the greater Atlanta, Georgia area, and we expect to maintain a significant presence at Unisource’s and xpedx’s current operational headquarters in Norcross, Georgia and Loveland, Ohio, respectively. Our website is www.veritivcorp.com. Information on, and which can be accessed through, our website is not incorporated in this prospectus.

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 SUMMARY HISTORICAL COMBINED FINANCIAL DATA OF XPEDX
The following summary historical condensed combined financial data of xpedx for the years ended December 31, 2013, December 31, 2012 and December 31, 2011, and as of December 31, 2013 and December 31, 2012, have been derived from the audited combined financial statements of xpedx included elsewhere in this prospectus. The following summary historical condensed combined financial data of xpedx as of December 31, 2011 have been derived from the audited combined financial statements of xpedx not included in this prospectus. The following summary historical condensed combined financial data for xpedx as of and for the three months ended March 31, 2014 and 2013, and as of March 31, 2014 and 2013, have been derived from the unaudited condensed combined financial statements of xpedx, but are not necessarily indicative of the results or the financial condition to be expected for the remainder of 2014 or any future date or period. Summary historical condensed combined financial statements of xpedx for the three month periods ended March 31, 2014 and 2013 and as of March 31, 2014 are included elsewhere in this prospectus. The summary historical condensed combined financial statements of xpedx as of March 31, 2013 have been derived from the unaudited condensed combined financial statements of xpedx not included in this prospectus. Management of xpedx believes that the unaudited condensed combined financial statements reflect all normal and recurring adjustments necessary for a fair statement of the unaudited condensed combined financial statements reflect all normal and recurring adjustments necessary for a fair statement of the results as of and for the interim periods presented. This information is only a summary and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of xpedx” and the financial statements of xpedx and the notes thereto included elsewhere in this prospectus.

 	  	Three Months Ended
March 31,	 	 	Year Ended December 31,	 	
 	  	2014	 	 	2013	 	 	2013	 	 	2012	 	 	2011	 	
 	  	 	 	 	 	 	 	(as restated (1) )	 	 	(as restated (1) )	 	 	(as restated (1) )	 	
 	  	(Dollars in millions)	 	
Statement of Operations Data:	  				 				 				 				
Net sales	  	$	1,307.4	  	 	$	1,388.4	  	 	$	 5,652.4	  	 	$	6,012.0	  	 	$	6,509.2	  	
Cost of products sold	  	 	1,088.5	  	 	 	1,159.3	  	 	 	4,736.8	  	 	 	5,036.7	  	 	 	5,475.3	  	
Distribution expenses	  	 	77.1	  	 	 	81.5	  	 	 	314.2	  	 	 	324.0	  	 	 	324.5	  	
Selling and administrative expenses	  	 	128.6	  	 	 	139.1	  	 	 	548.2	  	 	 	580.6	  	 	 	598.7	  	
Depreciation and amortization	  	 	4.6	  	 	 	4.3	  	 	 	17.1	  	 	 	14.0	  	 	 	15.6	  	
Restructuring charges	  	 	(0.2	) 	 	 	7.1	  	 	 	37.9	  	 	 	35.1	  	 	 	43.6	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	  	 	8.8	  	 	 	(2.9	) 	 	 	(1.8	) 	 	 	21.6	  	 	 	51.5	  	
Other income, net	  	 	(0.5	) 	 	 	(1.5	) 	 	 	(2.2	) 	 	 	(1.9	) 	 	 	(5.2	) 	
Income tax provision (benefit)	  	 	3.7	  	 	 	(0.5	) 	 	 	0.4	  	 	 	9.1	  	 	 	21.2	  	
(Loss) income from discontinued operations, net of income taxes	  	 	(0.1	) 	 	 	0.2	  	 	 	0.2	  	 	 	(10.0	) 	 	 	(13.6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	$	5.5	  	 	$	(0.7	) 	 	$	0.2	  	 	$	4.4	  	 	$	21.9	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance Sheet Data (at period end):	  				 				 				 				
Accounts receivable, net	  	$	651.3	  	 	$	656.8	  	 	$	669.7	  	 	$	680.6	  	 	$	731.7	  	
Inventories, net	  	 	356.3	  	 	 	379.8	  	 	 	360.9	  	 	 	373.4	  	 	 	387.2	  	
Total assets	  	 	1,231.9	  	 	 	1,289.5	  	 	 	1,256.9	  	 	 	1,307.9	  	 	 	1,379.7	  	
Non-current liabilities	  	 	11.5	  	 	 	12.3	  	 	 	12.5	  	 	 	16.9	  	 	 	16.4	  	
					
Cash Flow Provided by (Used for) Continuing Operations:	  				 				 				 				
Operating activities	  	$	36.3	  	 	$	46.7	  	 	$	53.0	  	 	$	58.6	  	 	$	101.5	  	
Investing activities	  	 	0.5	  	 	 	8.4	  	 	 	13.2	  	 	 	(7.7	) 	 	 	(16.9	) 	
Financing activities	  	 	(35.8	) 	 	 	(56.8	) 	 	 	(76.6	) 	 	 	(47.2	) 	 	 	(91.2	) 	
					
Other Selected Data:	  				 				 				 				
Adjusted EBITDA (2)	  	$	12.5	  	 	$	12.7	  	 	$	74.8	  	 	$	89.5	  	 	$	125.6	  	

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(1)	The financial data presented above has been adjusted to reflect the restatement of xpedx’s Combined Balance Sheets as of December 31, 2013 and 2012 and Combined Statements of Cash Flows and Changes in Parent Company Equity for each of the three years ended December 31, 2013. The restatement is more fully described in Note 15 to the combined financial statements of xpedx included elsewhere in this prospectus. The restatement had no impact on xpedx’s Combined Statement of Operations and Comprehensive Income.	
(2)	xpedx supplements its financial information prepared in accordance with GAAP with Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, cash and non-cash restructuring, stock-based compensation expense, LIFO (income) expense, severance charges, income (loss) from discontinued operations, net of income taxes and certain other costs) because xpedx believes investors commonly use Adjusted EBITDA as a main component of valuing companies such as xpedx. In addition, the credit agreement governing the combined company’s ABL Facility will permit the combined company to exclude these and other charges and expenses in calculating “Consolidated EBITDA” pursuant to such credit agreement. Adjusted EBITDA is not a measurement of financial performance under GAAP. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to, similarly titled measures used by other companies. As a result, management of xpedx considers and evaluates non-GAAP measures in connection with a review of the most directly comparable measure calculated in accordance with GAAP. Management of xpedx cautions investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measure. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analyzing xpedx’s results as reported under GAAP.	
A reconciliation of Adjusted EBITDA to net income determined in accordance with GAAP for the periods presented is provided below:

 	  	Three Months Ended
March 31,	 	 	Year Ended December 31,	 	
 	  	2014	 	 	2013	 	 	2013	 	  	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
Net income (loss)	  	$	5.5	  	 	 	(0.7	) 	 	$	0.2	  	  	$	4.4	  	 	$	21.9	  	
Interest expense, net	  	 	—  	  	 	 	—  	  	 	 	—  	  	  	 	—  	  	 	 	—  	  	
Income tax provision (benefit)	  	 	3.7	  	 	 	(0.5	) 	 	 	0.4	  	  	 	9.1	  	 	 	21.2	  	
Depreciation and amortization	  	 	4.6	  	 	 	4.3	  	 	 	17.1	  	  	 	14.0	  	 	 	15.6	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
EBITDA	  	 	13.8	  	 	 	3.1	  	 	 	17.7	  	  	 	27.5	  	 	 	58.7	  	
Restructuring charges	  	 	(0.2	) 	 	 	7.1	  	 	 	37.9	  	  	 	35.1	  	 	 	43.6	  	
Non-restructuring stock-based compensation expense	  	 	0.9	  	 	 	4.2	  	 	 	13.7	  	  	 	13.1	  	 	 	10.1	  	
LIFO (income) expense	  	 	(3.8	) 	 	 	(1.9	) 	 	 	3.4	  	  	 	1.0	  	 	 	(0.8	) 	
Non-restructuring severance charges	  	 	1.7	  	 	 	0.4	  	 	 	2.3	  	  	 	0.6	  	 	 	0.4	  	
(Loss) income from discontinued operations, net of income taxes	  	 	(0.1	) 	 	 	0.2	  	 	 	0.2	  	  	 	(10.0	) 	 	 	(13.6	) 	
Other (a)	  	 	—  	  	 	 	—  	  	 	 	—  	  	  	 	2.2	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Adjusted EBITDA	  	$	12.5	  	 	$	12.7	  	 	$	74.8	  	  	$	89.5	  	 	$	125.6	  	

 	(a)	“Other” for the year ended December 31, 2012 is comprised of $2.2 million of temporary labor costs incurred due to a labor strike.	

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 SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA OF UNISOURCE
The following summary of historical consolidated financial data of Unisource for the fiscal years ended December 31, 2013, December 29, 2012 and December 31, 2011, and as of December 31, 2013 and December 29, 2012, have been derived from the audited consolidated financial statements of Unisource included elsewhere in this prospectus. The historical consolidated financial data of Unisource as of December 31, 2011 have been derived from the audited consolidated financial statements of Unisource not included in this prospectus. The following summary historical condensed consolidated financial data for Unisource for the three month periods ended March 31, 2014 and March 30, 2013 and as of March 31, 2014 have been derived from the unaudited condensed consolidated financial statements of Unisource included elsewhere in this prospectus but are not necessarily indicative of the results or the financial condition to be expected for the remainder of the fiscal year or any future date or period. The historical condensed consolidated financial data of Unisource as of March 30, 2013 have been derived from the unaudited condensed consolidated financial statements of Unisource not included in this prospectus. Management of Unisource believes that the unaudited condensed consolidated fiscal financial statements reflect all normal and recurring adjustments necessary for a fair statement of the results as of and for the interim periods presented. This information is only a summary and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Unisource” and the financial statements of Unisource and the notes thereto included elsewhere in this prospectus.

 	  	Three Months Ended	 	 	Fiscal Year Ended	 	
 	  	March 31,
2014	 	 	March 30,
2013	 	 	December 31,
2013	 	 	December 29,
2012	 	 	December 31,
2011	 	
 	  	(Dollars in millions)	 	
Statement of Operations Data:	  				 				 				 				 				
Net sales	  	$	930.7	  	 	$	979.4	  	 	$	4,089.1	  	 	$	4,123.3	  	 	$	4,327.8	  	
Cost of products sold, excluding depreciation and amortization	  	 	763.5	  	 	 	805.5	  	 	 	3,370.4	  	 	 	3,405.6	  	 	 	3,591.9	  	
Distribution expenses	  	 	62.6	  	 	 	63.1	  	 	 	250.3	  	 	 	240.0	  	 	 	252.4	  	
Selling and administrative expenses	  	 	94.6	  	 	 	101.5	  	 	 	391.3	  	 	 	392.9	  	 	 	409.0	  	
Depreciation and amortization	  	 	6.1	  	 	 	6.2	  	 	 	25.1	  	 	 	25.4	  	 	 	24.5	  	
Restructuring expenses (gains)	  	 	0.2	  	 	 	0.8	  	 	 	(3.4	) 	 	 	6.6	  	 	 	14.6	  	
Merger expenses	  	 	7.9	  	 	 	0.2	  	 	 	14.3	  	 	 	—  	  	 	 	—  	  	
Asset impairments	  	 	—  	  	 	 	0.1	  	 	 	0.4	  	 	 	4.9	  	 	 	1.0	  	
Other expense, net	  	 	—  	  	 	 	0.6	  	 	 	0.5	  	 	 	0.4	  	 	 	1.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating (loss) income	  	 	(4.2	) 	 	 	1.4	  	 	 	40.2	  	 	 	47.5	  	 	 	32.9	  	
Interest expense, net	  	 	6.3	  	 	 	7.0	  	 	 	27.4	  	 	 	28.3	  	 	 	66.7	  	
Gain on sale of equity-method investments	  	 	(6.6	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) income before income taxes	  	 	(3.9	) 	 	 	(5.6	) 	 	 	12.8	  	 	 	19.2	  	 	 	(33.8	) 	
Income tax (benefit) expense	  	 	(0.3	) 	 	 	0.3	  	 	 	(228.5	) 	 	 	15.2	  	 	 	(5.5	) 	
Equity earnings of affiliates, net of taxes	  	 	(0.2	) 	 	 	(0.3	) 	 	 	(1.1	) 	 	 	(1.1	) 	 	 	(1.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income	  	 	(3.4	) 	 	 	(5.6	) 	 	 	242.4	  	 	 	5.1	  	 	 	(27.1	) 	
Redeemable preferred stock dividends	  	 	(1.6	) 	 	 	(4.8	) 	 	 	(19.4	) 	 	 	(17.2	) 	 	 	(1.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income attributable to common shareholders	  	 	(5.0	) 	 	 	(10.4	) 	 	$	223.0	  	 	$	(12.1	) 	 	$	(28.4	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance Sheet Data (at period end):	  				 				 				 				 				
Accounts receivable, net	  	$	448.8	  	 	$	451.0	  	 	$	467.8	  	 	$	471.9	  	 	$	461.7	  	
Inventories	  	 	308.8	  	 	 	311.3	  	 	 	314.7	  	 	 	315.2	  	 	 	316.7	  	
Total assets	  	 	1,187.1	  	 	 	998.9	  	 	 	1,215.2	  	 	 	1,039.2	  	 	 	1,067.5	  	
Long-term debt (including current maturities)	  	 	348.2	  	 	 	367.6	  	 	 	383.4	  	 	 	382.8	  	 	 	385.6	  	
Other noncurrent liabilities	  	 	60.5	  	 	 	109.5	  	 	 	100.0	  	 	 	110.2	  	 	 	96.1	  	
						
Cash Flow Provided by (used in):	  				 				 				 				 				
Operating activities	  	$	37.6	  	 	$	17.8	  	 	$	(1.5	) 	 	$	18.1	  	 	$	40.9	  	
Investing activities	  	 	3.0	  	 	 	(4.5	) 	 	 	(10.3	) 	 	 	(26.9	) 	 	 	(22.3	) 	
Financing activities	  	 	(33.1	) 	 	 	(14.3	) 	 	 	3.6	  	 	 	(4.7	) 	 	 	(13.3	) 	
						
Other Selected Data :	  				 				 				 				 				
Adjusted EBITDA (1)	  	$	11.3	  	 	$	9.6	  	 	$	87.1	  	 	$	91.6	  	 	$	82.6	  	

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(1)	Unisource supplements its financial information prepared in accordance with GAAP with Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, restructuring (gains) expenses, merger expenses, gain from sale of equity investment, asset impairments, stock-based compensation expense, LIFO (income) expense, severance charges, pension settlement charges and certain other costs) because similar information has historically been required by its lenders pursuant to its senior credit facility. Further, Unisource believes Adjusted EBITDA gives investors meaningful information to help them understand Unisource’s operating results and to analyze Unisource’s financial and business trends on a period-to-period basis and is commonly used as a component when valuing companies such as Unisource. Adjusted EBITDA is not a measurement of financial performance under GAAP. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As result, management of Unisource considers and evaluates non-GAAP measures in connection with a review of the most directly comparable measure calculated in accordance with GAAP. Management of Unisource cautions investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measure. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as substitutes for analysis of Unisource’s results as reported under GAAP.	
A reconciliation of Adjusted EBITDA to net income (loss) determined in accordance with GAAP for the periods presented is provided below:

 	  	Three Months Ended	 	 	Fiscal years ended	 	
 	  	March 31,
2014	 	 	March 30,
2013	 	 	December 31,
2013	 	 	December 29,
2012	 	 	December 31,
2011	 	
 	  	 	 	 	 	 	 	(Dollars in millions)	 	
Net (loss) income	  	$	(3.4	) 	 	$	(5.6	) 	 	$	242.4	  	 	$	5.1	  	 	$	(27.1	) 	
Interest expense, net	  	 	6.3	  	 	 	7.0	  	 	 	27.4	  	 	 	28.3	  	 	 	66.7	  	
Income tax (benefit) expense	  	 	(0.3	) 	 	 	0.3	  	 	 	(228.5	) 	 	 	15.2	  	 	 	(5.5	) 	
Depreciation and amortization	  	 	6.1	  	 	 	6.2	  	 	 	25.1	  	 	 	25.4	  	 	 	24.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDA	  	 	8.7	  	 	 	7.9	  	 	 	66.4	  	 	 	74.0	  	 	 	58.6	  	
Restructuring expenses (gains)	  	 	0.2	  	 	 	0.8	  	 	 	(3.4	) 	 	 	6.6	  	 	 	14.6	  	
Merger expenses	  	 	7.9	  	 	 	0.2	  	 	 	14.3	  	 	 	—  	  	 	 	—  	  	
Gain from sale of equity investment	  	 	(6.6	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Asset impairments	  	 	—  	  	 	 	0.1	  	 	 	0.4	  	 	 	4.9	  	 	 	1.0	  	
Non-restructuring stock-based compensation expense	  	 	—  	  	 	 	0.2	  	 	 	0.4	  	 	 	0.7	  	 	 	1.3	  	
LIFO (income) expense	  	 	(0.2	) 	 	 	(0.7	) 	 	 	3.3	  	 	 	(0.4	) 	 	 	1.9	  	
Non-restructuring severance charges	  	 	0.2	  	 	 	—  	  	 	 	0.5	  	 	 	0.5	  	 	 	0.8	  	
Non-restructuring pension settlement charges	  	 	—  	  	 	 	—  	  	 	 	0.8	  	 	 	0.9	  	 	 	—  	  	
Other (a)	  	 	1.1	  	 	 	1.1	  	 	 	4.4	  	 	 	4.4	  	 	 	4.4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	  	$	11.3	  	 	$	9.6	  	 	$	87.1	  	 	$	91.6	  	 	$	82.6	  	

 	(a)	“Other” consists of fees paid to Bain Capital pursuant to the advisory agreement.	

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 SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following sets forth summary unaudited pro forma condensed combined financial data which combines the combined financial information of xpedx and consolidated financial information of Unisource as of and for the three months ended March 31, 2014 and for the year ended December 31, 2013 after giving effect to the Transactions. The summary unaudited pro forma condensed combined financial data are derived from the unaudited pro forma condensed combined financial statements that are included elsewhere in this prospectus. The summary unaudited pro forma condensed combined financial data are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of the combined company would have been had the Transactions occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position.
This information is only a summary and should be read in conjunction with “Selected Historical Combined Financial Data for xpedx,” “Selected Historical Consolidated Financial Data for Unisource,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of xpedx” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Unisource” which are included elsewhere in this prospectus.

 	  	Three Months Ended
March 31, 2014	 	 	Year Ended
December 31, 2013	 	
	  	(Dollars in millions)	 	
Statement of Operations Data:	  				 				
Net sales	  	$	2,238.1	  	 	$	9,741.5	  	
Cost of products sold	  	 	1,852.0	  	 	 	8,108.7	  	
Distribution expense	  	 	139.7	  	 	 	564.5	  	
Selling and administrative expense	  	 	221.9	  	 	 	934.8	  	
Depreciation and amortization	  	 	13.8	  	 	 	53.1	  	
Restructuring charges	  	 	—  	  	 	 	34.5	  	
Asset impairment	  	 	—  	  	 	 	0.4	  	
	  	 	 	 	 	 	 	 	
Operating income	  	 	10.7	  	 	 	45.5	  	
	  	 	 	 	 	 	 	 	
Other income, net	  	 	(0.5	) 	 	 	(1.7	) 	
Interest expense, net	  	 	6.8	  	 	 	28.6	  	
Gain on sale of equity-method investments	  	 	(6.6	) 	 	 	—  	  	
Income tax provision	  	 	2.5	  	 	 	231.6	  	
Equity earnings of affiliates, net of taxes	  	 	(0.2	) 	 	 	(1.1	) 	
	  	 	 	 	 	 	 	 	
Income from continuing operations	  	$	8.7	  	 	$	251.3	  	
	  	 	 	 	 	 	 	 	
Balance Sheet Data (at period end):	  				 				
Accounts receivable, net	  	 	1,109.1	  	 				
Inventories, net	  	 	707.0	  	 				
Total assets	  	 	2,674.4	  	 				
Long-term debt, net of current maturities	  	 	728.5	  	 				
Total other non-current liabilities	  	 	367.2	  	 				
			
Other Selected Data:	  				 				
Pro Forma Adjusted EBITDA (1)	  	$	24.0	  	 	$	160.7	  	

(1)	In addition to evaluating the financial condition and results of operations in accordance with GAAP, management of xpedx and Unisource also review and evaluate certain alternative financial measures not prepared in accordance with GAAP. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to, similarly titled measures used by other companies. As a result, management of xpedx and Unisource consider and evaluate non-GAAP measures in connection with a review of the most directly comparable measure calculated in accordance with GAAP. Management of	

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 	xpedx and Unisource caution investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measure. In this prospectus, xpedx and Unisource supplement their financial information prepared in accordance with GAAP with Adjusted EBITDA because xpedx and Unisource believe investors commonly use Adjusted EBITDA as a main component of valuing companies such as xpedx and Unisource.	
Pro Forma Adjusted EBITDA, which gives pro forma effect to the Transactions, is not a measurement of financial performance under GAAP. Pro Forma Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analyzing our results as reported under GAAP. A reconciliation of Pro Forma Adjusted EBITDA to pro forma condensed combined net income for the periods presented is provided below:

 	  	Three Months Ended March 31, 2014	 	
 	  	Historical	 	 	 	 	 	 	 	
 	  	xpedx	 	 	Unisource	 	 	Pro Forma
Adjustments	 	 	Pro Forma
Condensed
Combined	 	
 	  	(Dollars in millions)	 	
Net income (loss)	  	$	5.5	  	 	$	(3.4	) 	 	$	6.5	  	 	$	8.6	  	
Income from discontinued operations, net of income taxes	  	 	0.1	  	 	 	—  	  	 	 	—  	  	 	 	0.1	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from continuing operations	  	 	5.6	  	 	 	(3.4	) 	 	 	6.5	  	 	 	8.7	  	
Interest expense, net	  	 	—  	  	 	 	6.3	  	 	 	0.5	  	 	 	6.8	  	
Income tax provision (benefit)	  	 	3.7	  	 	 	(0.3	) 	 	 	(0.9	) 	 	 	2.5	  	
Depreciation and amortization	  	 	4.6	  	 	 	6.1	  	 	 	3.1	  	 	 	13.8	  	
Restructuring charges	  	 	(0.2	) 	 	 	0.2	  	 	 	—  	  	 	 	—  	  	
Merger expenses	  	 	—  	  	 	 	7.9	  	 	 	(7.9	) 	 	 	—  	  	
Gain on sale of equity-method investments	  	 	—  	  	 	 	(6.6	) 	 	 	—  	  	 	 	(6.6	) 	
Non-restructuring stock-based compensation expense	  	 	0.9	  	 	 	—  	  	 	 	—  	  	 	 	0.9	  	
LIFO income	  	 	(3.8	) 	 	 	(0.2	) 	 	 	—  	  	 	 	(4.0	) 	
Non-restructuring severance charges	  	 	1.7	  	 	 	0.2	  	 	 	—  	  	 	 	1.9	  	
Other (a)(b)	  	 	—  	  	 	 	1.1	  	 	 	(1.1	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pro Forma Adjusted EBITDA	  	$	12.5	  	 	$	11.3	  	 	$	0.2	  	 	$	24.0	  	

 
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 	  	Year Ended December 31, 2013	 	
 	  	Historical	 	 	 	 	 	 	 	
 	  	xpedx	 	 	Unisource	 	 	Pro Forma
Adjustments	 	 	Pro Forma
Condensed
Combined	 	
 	  	(Dollars in millions)	 	
Net income	  	$	0.2	  	 	$	242.4	  	 	$	8.9	  	 	$	251.5	  	
Income from discontinued operations, net of income taxes	  	 	(0.2	) 	 	 	—  	  	 	 	—  	  	 	 	(0.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	  	 	—  	  	 	 	242.4	  	 	 	8.9	  	 	 	251.3	  	
Interest expense, net	  	 	—  	  	 	 	27.4	  	 	 	1.2	  	 	 	28.6	  	
Income tax provision (benefit)	  	 	0.4	  	 	 	(228.5	) 	 	 	(3.5	) 	 	 	(231.6	) 	
Depreciation and amortization	  	 	17.1	  	 	 	25.1	  	 	 	10.9	  	 	 	53.1	  	
Restructuring charges	  	 	37.9	  	 	 	(3.4	) 	 	 	—  	  	 	 	34.5	  	
Merger expenses	  	 	—  	  	 	 	14.3	  	 	 	(14.3	) 	 	 	—  	  	
Asset impairment	  	 	—  	  	 	 	0.4	  	 	 	—  	  	 	 	0.4	  	
Non-restructuring stock-based compensation expense	  	 	13.7	  	 	 	0.4	  	 	 	—  	  	 	 	14.1	  	
LIFO expense	  	 	3.4	  	 	 	3.3	  	 	 	—  	  	 	 	6.7	  	
Non-restructuring severance charges	  	 	2.3	  	 	 	0.5	  	 	 	—  	  	 	 	2.8	  	
Non-restructuring pension settlement charges	  	 	—  	  	 	 	0.8	  	 	 	—  	  	 	 	0.8	  	
Other (a)(b)	  	 	—  	  	 	 	4.4	  	 	 	(4.4	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pro Forma Adjusted EBITDA	  	$	74.8	  	 	$	87.1	  	 	$	(1.2	) 	 	$	160.7	  	

 	(a)	In connection with the Transactions, the combined company will enter into a new five-year asset-based revolving credit facility that provides for borrowings of up to $1,400.0 million. The credit agreement governing the combined company’s ABL Facility is expected to contain financial ratio covenants based on “Consolidated EBITDA” as defined therein. Charges and expenses in addition to those set forth in the foregoing table may be included in the calculation of Consolidated EBITDA pursuant to the ABL Facility.	
 	(b)	“Other” for Unisource for the three months ended March 31, 2014 and for the year ended December 31, 2013 consists of advisory fees paid to Bain Capital pursuant to the advisory agreement of $1.1 million and $4.4 million, respectively.	

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 RISK FACTORS
You should carefully consider the following risk factors, together with information contained or incorporated by reference in this prospectus in evaluating us and our common stock. The risks described below are the material risks, although not the only risks relating to the Transactions. If any of the following risks and uncertainties develop into actual events, these events could have a material adverse effect on SpinCo’s business, financial condition, results of operations or cash flows after the Transactions. In addition, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.
Risks Relating to the Transactions
We may not realize the anticipated synergies, cost savings and growth opportunities from the Merger.
The benefits that we expect to achieve as a result of the Merger will depend, in part, on the ability of the combined company to realize anticipated growth opportunities, cost savings and other synergies. Our success in realizing these growth opportunities, cost savings and synergies, and the timing of this realization, depends on the successful integration of the xpedx and Unisource businesses. Even if the combined company is able to integrate the xpedx and Unisource businesses successfully, this integration may not result in the realization of the full benefits of the growth opportunities and cost savings and other synergies that we currently expect from this integration within the anticipated time frame or at all. For example, the combined company may be unable to eliminate duplicative costs. Moreover, we may incur substantial expenses in connection with the integration of xpedx’s and Unisource’s businesses. While we anticipate that certain expenses will be incurred, such expenses are difficult to estimate accurately, and may exceed current estimates. Accordingly, the benefits from the Merger may be offset by costs or delays incurred in integrating the businesses.
The integration of the xpedx business with the Unisource business following the Transactions may present significant challenges.
There is a significant degree of difficulty and management distraction inherent in the process of integrating the xpedx and Unisource businesses. These difficulties include:
 
 	•	 	the challenge of integrating the xpedx and Unisource businesses and carrying on the ongoing operations of each business;	
 
 	•	 	the challenge of integrating the business cultures of each company;	
 
 	•	 	the challenge and cost of integrating the information technology (“IT”) systems of each company; and	
 
 	•	 	the potential difficulty in retaining key employees and sales personnel of xpedx and Unisource.	
The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of xpedx’s or Unisource’s businesses and may require the combined company to incur substantial out-of-pocket costs. Members of our senior management may be required to devote considerable amounts of time and attention to this integration process, which will decrease the time they will have to manage the combined company, service existing customers, attract new customers and develop new services or strategies. If senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, the combined company could suffer.
We cannot assure you that the combined company will successfully or cost-effectively integrate the Unisource and xpedx businesses. The failure to do so could have a material adverse effect on the combined company’s financial condition and results of operations.
 
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The combined company may be unable to provide benefits and services or access to equivalent financial strength and resources to the xpedx business that historically have been provided by International Paper.
The xpedx business has been able to receive benefits and services from International Paper and has been able to benefit from International Paper’s financial strength and extensive business relationships. After the Transactions, the combined company will no longer benefit from International Paper’s resources, other than pursuant to the Transition Services Agreement. While International Paper will provide certain transition services for SpinCo following the Transactions under the Transition Services Agreement, it cannot be assured that we will be able to adequately replace all of the resources provided by International Paper or replace them at the same cost. If we are not able to replace the resources provided by International Paper, are unable to replace them at the same cost or are delayed in replacing the resources provided by International Paper, our business, financial condition and results of operations may be negatively impacted.
Our and Unisource’s historical and pro forma combined financial data are not necessarily representative of the results the combined company would have achieved and may not be a reliable indicator of the combined company’s future results.
Our and Unisource’s historical and pro forma financial data included in this prospectus may not reflect what xpedx’s or Unisource’s results of operations, financial condition and cash flows would have been had we been a combined company during the periods presented, or what the combined company’s results of operations, financial condition and cash flows will be in the future. Among other factors, this is because:
 
 	•	 	Prior to the Transactions, International Paper operated the xpedx business as part of its broader corporate organization and International Paper, or one of its affiliates, performed certain corporate functions for the xpedx business, including tax and treasury administration and certain governance functions, including internal audit and external reporting. Our historical and pro forma financial statements reflect allocations of corporate expenses from International Paper for these and similar functions and may not reflect the costs that the combined company will incur for similar services in the future.	
 
 	•	 	The xpedx business and the Unisource business have and the combined company will rely heavily on the sale of paper and related products. There has been an industry-wide decrease in demand for paper and related products in key markets the combined company will serve, primarily because of the use of email, increased and permanent product substitution, including less print advertising, more electronic billing, more e-commerce, fewer catalogs and a reduced volume of mail.	
 
 	•	 	The working capital and other capital required for the general corporate purposes of the xpedx business, including acquisitions and capital expenditures, historically have been satisfied as part of the company-wide cash management practices of International Paper. Following the completion of the Transactions, the combined company will need to generate its own funds to finance working capital or other cash requirements and may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities or other arrangements.	
 
 	•	 	Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a combined company.	
In addition, the pro forma financial data we have included in this prospectus are based in part upon a number of estimates and assumptions. These estimates and assumptions may prove not to be accurate, and accordingly, our pro forma financial data should not be assumed to be indicative of what our financial condition or results of operations actually would have been as a combined company and may not be a reliable indicator of what our financial condition or results of operations actually may be in the future.
Our accounting, management and financial reporting systems may not be adequately prepared to comply with public company reporting, disclosure controls and internal control over financial reporting requirements.
The financial results of the xpedx business previously were included within the consolidated results of International Paper, and neither SpinCo nor Unisource were subject to the reporting and other requirements of the
 
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Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result of the Transactions, we will be directly subject to reporting and other obligations under the Exchange Act. The Exchange Act requires that we file annual, quarterly and current reports with respect to the combined company’s business and financial condition. Following the Merger, we will be responsible for ensuring that all aspects of the combined company’s business comply with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes Oxley Act”). Under the Sarbanes-Oxley Act, we will be required to maintain effective disclosure controls and procedures and internal control over financial reporting. In addition, our management will be required to assess the effectiveness of our internal control over financial reporting and obtain a report by an independent registered public accounting firm addressing such assessments on an annual basis, subject to applicable phase-in periods.
To comply with these requirements, the combined company may need to upgrade its systems, implement additional financial and management controls, reporting systems and procedures, and hire additional accounting, legal and finance staff. The combined company expects to incur additional annual expenses for the purpose of addressing these requirements, and those expenses may be significant. If the combined company is unable to upgrade its financial and management controls, reporting systems, IT systems and procedures in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies under the Exchange Act and the Sarbanes-Oxley Act could be impaired. Any failure to achieve and maintain effective internal controls could have a material adverse effect on the combined company’s business, financial condition and results of operations.
Subsequent to the issuance of the 2013 audited combined financial statements of the xpedx business, an error related to deferred tax assets was discovered, resulting in a restatement of such financial statements. See Note 15 to the audited combined financial statements of xpedx included elsewhere in this prospectus. Because the error resulted in a restatement of previously issued financial statements, it was determined that there was a material weakness in internal controls related to the process of preparing the financial statements of the xpedx business on a “carve-out” basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.
We expect that the combined company will incur significant one-time costs associated with the Transactions that could affect the period-to-period operating results of the combined company following the completion of the Transactions.
We anticipate that the combined company will incur one-time costs of approximately $225 million over the next five years as a result of costs associated with the Transactions. We will not be able to quantify the exact amount of these charges or the period in which they will be incurred until after the Transactions are completed. Some of the factors affecting the costs associated with the Transactions include the timing of the completion of the Transactions, the resources required in integrating the Unisource business and the xpedx business and the length of time during which transition services are provided to SpinCo by International Paper. The amount and timing of these charges could adversely affect the period-to-period operating results of SpinCo, which could result in a reduction in the market price of shares of SpinCo common stock. Moreover, delays in completing the integration may reduce or delay the synergies and other benefits expected from the Transactions and such reduction may be material.
If costs to integrate our information technology infrastructure and network systems are more than amounts that have been budgeted, our business, financial condition and results of operations could be adversely affected.
We expect to spend approximately $70 million of the anticipated $225 million one-time costs (described above) on information technology infrastructure and systems integration and planning in connection with the Merger. The primary areas of spending will be integrating our financial, operational and human resources systems. We expect that a portion of these expenditures will be capitalized. Expenditures in excess of the budgeted amounts on transition and other costs could adversely affect our business, financial condition and results of operations.
 
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Our business, financial condition and results of operations may be adversely affected following the Merger if we, International Paper and Unisource are unable to obtain required third-party consents for certain contracts.
Certain contracts, including customer contracts, which are required by the Contribution and Distribution Agreement to be transferred or assigned to SpinCo by International Paper and its subsidiaries, contain provisions which require the consent of a third party to the transactions to affect such transfer or assignment. Similarly, certain of Unisource’s existing contracts contain provisions which require the consent of a third party to the Merger. If we, International Paper and Unisource are unable to obtain these consents on commercially reasonable and satisfactory terms or at all, our ability to obtain the benefit of such contracts in the future may be impaired. For example, the failure to obtain the consent of our or Unisource’s customers could result in lost sales and have an adverse effect on our results of operation, cash flows and financial condition.
The combined company’s substantial indebtedness, which would have been approximately $791.6 million on a pro forma basis as of March 31, 2014, could adversely affect our financial condition and impair our ability to operate our business.
In connection with the Transactions, we will enter into a $1.4 billion asset-based revolving credit facility, which will be used to fund the special payment to International Paper, to repay certain outstanding indebtedness of subsidiaries of UWWH and pay related fees and expenses. Based upon Unisource’s outstanding indebtedness as of March 31, 2014, assuming the closing of the Transactions occurred as of March 31, 2014, we expect that the combined company will have approximately $791.6 million in total indebtedness, including the new borrowings of $698.9 million under the ABL Facility, $70.5 million of capital lease obligations (exclusive of the non-monetary portion) and $22.2 million of Unisource Canadian bank overdrafts. See “Capitalization.” This level of indebtedness could have important consequences to the combined company’s financial condition, operating results and business, including the following:
 
 	•	 	limiting our ability to obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;	
 
 	•	 	increasing our cost of borrowing;	
 
 	•	 	requiring that a substantial portion of our cash flows from operations be dedicated to payments on our indebtedness instead of other purposes, including operations, capital expenditures and future business opportunities;	
 
 	•	 	making it more difficult for us to make payments on our indebtedness or satisfy other obligations;	
 
 	•	 	exposing us to risk of increased interest rates because our borrowings under the ABL Facility are at variable rates of interest;	
 
 	•	 	limiting our ability to make the expenditures necessary to complete the integration of xpedx’s business with Unisource’s business;	
 
 	•	 	limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors that have less debt; and	
 
 	•	 	increasing our vulnerability to a downturn in general economic conditions or in our business, and making us unable to carry out capital spending that is important to our growth.	
Despite our substantial indebtedness following the consummation of the Transactions, we may still be able to incur substantially more indebtedness in the future. This could further exacerbate the risks to our financial condition described above.
We may be able to incur significant additional indebtedness in the future, including secured indebtedness. Although the agreements governing the ABL Facility will contain restrictions on the incurrence of additional indebtedness, these restrictions will be subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. If new indebtedness is added to our current indebtedness levels, the related risks we will face could intensify.
 
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The agreements governing our indebtedness will contain restrictive covenants, which will restrict our operational flexibility.
The agreements governing the combined company’s ABL Facility will contain restrictions and limitations on its ability to engage in activities that may be in the combined company’s long-term best interests, including financial and other restrictive covenants that will limit its ability to:
 
 	•	 	incur additional indebtedness or guaranties, or issue certain preferred shares;	
 
 	•	 	pay dividends, redeem stock or make other distributions;	
 
 	•	 	repurchase, prepay or redeem subordinated indebtedness;	
 
 	•	 	make investments or acquisitions;	
 
 	•	 	create liens;	
 
 	•	 	make negative pledges;	
 
 	•	 	consolidate or merge with another company;	
 
 	•	 	sell or otherwise dispose of all or substantially all of our assets;	
 
 	•	 	enter into certain transactions with affiliates; and	
 
 	•	 	change the nature of our business.	
The agreements governing the ABL Facility will also contain other restrictions customary for asset-based facilities of this nature.
Our ability to borrow additional amounts under the ABL Facility will depend upon satisfaction of these covenants. Events beyond our control could affect our ability to meet these covenants. Our failure to comply with obligations under the agreements governing the ABL Facility may result in an event of default under those agreements. A default, if not cured or waived, may permit acceleration of our indebtedness. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all. This could have serious consequences to our financial condition, operating results and business and could cause us to become bankrupt or insolvent.
The Transactions are subject to certain conditions, and therefore the Transactions may not be consummated on the terms or timeline currently contemplated.
The consummation of the Transactions remain subject to the satisfaction or waiver (to the extent permitted by applicable law) of certain conditions, including (i) SpinCo’s receipt of the proceeds of the special payment financing in an amount sufficient to pay the special payment, and International Paper’s receipt of the special payment from SpinCo, (ii) receipt of the IRS ruling to International Paper, (iii) the International Paper board of directors’ receipt of a solvency opinion with respect to International Paper and SpinCo, (iv) this registration statement having been declared effective and the approval for listing on the New York Stock Exchange of SpinCo common stock to be issued in the Merger, (v) subject to certain exceptions, the accuracy of representations and warranties in the Merger Agreement, (vi) receipt of customary tax opinions and (vii) the absence of a material adverse effect on xpedx and Unisource since June 30, 2013. In addition, the consummation of the Merger is subject to the Contribution and Distribution having occurred pursuant to the terms of the Contribution and Distribution Agreement.
In addition, the parties to the Merger Agreement have the right to terminate the Merger Agreement under certain circumstances. See “The Merger Agreement—Termination of the Merger; Termination Fees.” Neither we nor UWWH can assure you that the Transactions will be consummated on the terms or timeline currently contemplated.
 
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We have and will continue to expend a significant amount of capital and management’s time and resources on the Transactions, and a failure to consummate the Transactions as currently contemplated could have a material adverse effect on our business and results of operations.
The pendency of the Merger could potentially adversely affect the business and operations of xpedx and Unisource.
In connection with the pending Merger, some customers of each of xpedx and Unisource may delay or defer decisions, may end their relationships with the relevant company or may reduce the amount of products purchased, which could negatively affect the revenues, earnings and cash flows of the xpedx business and the Unisource business, regardless of whether the Merger is completed. Similarly, it is possible that our and Unisource’s current and prospective employees could experience uncertainty about their future roles with the combined company following the Merger, which could materially adversely affect our ability and that of Unisource to attract and retain key personnel during the pendency and upon consummation of the Merger.
If the spin-off does not qualify as a tax-free spin-off under Section 355 of the Code, including as a result of subsequent acquisitions of stock of International Paper or SpinCo, then International Paper and/or the International Paper shareholders may be required to pay substantial U.S. federal income taxes.
The spin-off and the Merger are conditioned upon International Paper’s receipt of a private letter ruling from the IRS to the effect that the spin-off and certain related transactions will qualify as tax-free to International Paper and the International Paper shareholders for U.S. federal income tax purposes. Although a private letter ruling from the IRS generally is binding on the IRS, the IRS ruling does not rule that the spin-off satisfies every requirement for a tax-free spin-off under Section 355 of the Code, and the parties will rely solely on the opinion of counsel for comfort that such additional requirements are satisfied.
Our and International Paper’s obligations to complete the spin-off and the Merger are also conditioned upon International Paper’s and SpinCo’s receipt of an opinion of Debevoise to the effect that the spin-off will qualify as tax-free to International Paper and the International Paper shareholders, though we expect that the condition that SpinCo receive such opinion will be waived. This opinion will rely on the IRS ruling as to matters covered by the IRS ruling.
The IRS ruling and such opinion will be based on, among other things, certain representations and assumptions as to factual matters made by us, International Paper and UWWH, including assumptions concerning Section 355(e) of the Code as discussed below. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the IRS ruling or such opinion. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the IRS ruling and such opinion will be based on current law, and cannot be relied upon if current law changes with retroactive effect.
If the spin-off does not qualify as a tax-free spin-off under Section 355 of the Code, then the receipt of our common stock would be taxable to the International Paper shareholders, International Paper might recognize a substantial gain on the spin-off, and we may be required to indemnify International Paper for the tax on such gain pursuant to the Tax Matters Agreement.
In addition, the spin-off will be taxable to International Paper pursuant to Section 355(e) of the Code if there is a 50% or more change in ownership of either International Paper or SpinCo, directly or indirectly, as part of a plan or series of related transactions that include the spin-off. Because the International Paper shareholders will collectively own more than 50% of our common stock following the Merger, the Merger alone will not cause the spin-off to be taxable to International Paper under Section 355(e) of the Code. However, Section 355(e) of the Code might apply if other acquisitions of stock of International Paper before or after the Merger, or of SpinCo after the Merger, are considered to be part of a plan or series of related transactions that include the spin-off. If Section 355(e) of the Code applied, then International Paper might recognize a substantial amount of taxable gain, and we may be required to indemnify International Paper for the tax on such gain pursuant to the Tax Matters Agreement.
 
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If the Merger does not qualify as a tax-free reorganization under Section 368(a) of the Code, then we may be required to pay substantial U.S. federal income taxes.
Our and International Paper’s obligations to complete the Merger are conditioned upon International Paper’s and SpinCo’s receipt of an opinion of Debevoise to the effect that the Merger will qualify as a tax-free reorganization under Section 368(a) of the Code, though we have received the private letter ruling described below and therefore expect that such condition will be waived. UWWH’s obligation to complete the Merger is conditioned on receipt of a similar opinion from UWWH’s counsel, Kirkland.
In addition, International Paper has received a private letter ruling from the IRS to the effect that the Merger will qualify as a tax-free reorganization under Section 368(a) of the Code. Although a private letter ruling from the IRS generally is binding on the IRS, the IRS ruling does not rule that the Merger satisfies every requirement for a tax-free reorganization under Section 368(a) of the Code, and the parties will rely solely on the opinion of counsel, to the extent provided, for comfort that such additional requirements are satisfied.
The IRS ruling and such opinions, to the extent provided, will be based on, among other things, certain representations and assumptions as to factual matters made by us, International Paper and UWWH. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the IRS ruling and such opinions. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the IRS ruling and such opinions, to the extent provided, will be based on current law, and cannot be relied upon if current law changes with retroactive effect.
If the Merger does not qualify as a tax-free reorganization under Section 368(a) of the Code, then UWWH would be considered to have made a taxable sale of its assets to us and we would be required to pay the U.S. federal income tax on the gain, if any, arising from such taxable sale as a result of being the surviving corporation in the Merger.
If the Subsidiary Merger does not qualify as a transfer of property to Unisource under Section 351(a) of the Code, then we may be required to pay substantial U.S. federal income taxes.
UWWH’s obligation to complete the Merger is conditioned on receipt of an opinion from Kirkland to the effect that the Subsidiary Merger will qualify as a transfer of property to Unisource under Section 351(a) of the Code. In addition, International Paper has received a private letter ruling from the IRS to the effect that the Subsidiary Merger will qualify as a transfer of property to Unisource under Section 351(a) of the Code. Although a private letter ruling from the IRS generally is binding on the IRS, the IRS ruling does not rule that the Subsidiary Merger satisfies every requirement for a transfer of property to Unisource under Section 351(a) of the Code, and the parties will rely solely on the opinion of counsel for comfort that such additional requirements are satisfied.
The IRS ruling and such opinion will be based on, among other things, certain representations and assumptions as to factual matters made by us, International Paper and UWWH. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the IRS ruling or such opinion. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the IRS ruling and such opinion will be based on current law, and cannot be relied upon if current law changes with retroactive effect.
If the Subsidiary Merger does not qualify as a transfer of property to Unisource under Section 351(a) of the Code, then we would be considered to have made a taxable sale of the assets of xpedx Intermediate to UWW, and we may either be required to pay the U.S. federal income tax on such sale or to indemnify International Paper for the U.S. federal income tax on such sale pursuant to the Tax Matters Agreement.
 
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SpinCo will generally be obligated to pay the UWWH Stockholder an amount equal to 85% of the tax savings arising from pre-merger net operating loss (“NOL”) carryforwards, and our ability to use such NOL carryforwards to offset future taxable income may be subject to limitations, including as a result of an ownership change for Unisource in connection with the Merger under Section 382 of the Code.
Unisource has substantial NOLs for U.S. federal, state and Canadian income tax purposes. Pursuant to the Tax Receivable Agreement, SpinCo generally will be obligated to pay the UWWH Stockholder an amount equal to 85% of the U.S. federal, state and Canadian income tax savings, if any, that SpinCo actually realizes with respect to taxable periods (or portions thereof) beginning after the date of the Merger as a result of the utilization of Unisource’s net operating losses attributable to taxable periods prior to the date of the Merger. The utilization of Unisource’s NOLs, tax credits and other tax attributes following the Merger depends on the timing and amount of taxable income earned by the combined company in the future, which neither Unisource nor xpedx are able to predict, and a lack of future taxable income would adversely affect our ability to utilize these tax attributes. Tax attributes are generally subject to expiration at various times in the future to the extent that they have not previously been applied to offset the taxable income of the combined company, and there is a risk that our existing NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities. Moreover, the Merger will likely result in an ownership change for Unisource under Section 382 of the Code, potentially limiting the use of Unisource’s NOLs to offset future taxable income for both U.S. federal and state income tax purposes. These limitations may affect the timing of when these NOLs may be used which, in turn, may impact the timing and amount of cash taxes payable by the combined company.
Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income, as well as successful implementation of various tax planning strategies. While we believe that the judgments and estimates of Unisource with respect to the valuation allowances included in this prospectus are appropriate and reasonable under the circumstances on a standalone basis, actual results could differ from projected results, which could give rise to additions to valuation allowances or reductions in valuation allowances. It is possible that such changes could have a material effect on the amount of income tax expense (benefit) recorded in our consolidated statement of operations.
We are required to abide by potentially significant restrictions that could limit our ability to undertake certain corporate actions (such as the issuance of common stock or the undertaking of a merger or consolidation) that otherwise could be advantageous.
The Tax Matters Agreement prohibits us from taking actions that could reasonably be expected to cause the Transactions to be taxable. In particular, for two years after the spin-off we may not:
 
 	•	 	cease, or permit certain of our wholly-owned subsidiaries to cease, the active conduct of a business that was conducted immediately prior to the spin-off or from holding certain assets held at the time of the spin-off;	
 
 	•	 	dissolve, liquidate, take any action that is a liquidation for U.S. federal income tax purposes, merge or consolidate with any other person (other than pursuant to the Mergers), or permit certain of our wholly-owned subsidiaries from doing any of the foregoing; or	
 
 	•	 	approve or allow an extraordinary contribution to us by our shareholders in exchange for stock, redeem or otherwise repurchase (directly or indirectly) any of our stock, or amend our certificate of incorporation or other organizational documents, or take any other action, if such amendment or other action would affect the relative voting rights of our capital stock.	
Nevertheless, we are permitted to take any of the actions described above if International Paper obtains a supplemental IRS private letter ruling (or, in certain circumstances, an opinion of counsel that is reasonably acceptable to International Paper) to the effect that such action will not affect the tax-free status of the Transactions. Because of these restrictions, for two years after the spin-off, we may be limited in the amount of capital stock that we can issue to make acquisitions or to raise additional capital.
 
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The number of shares of our common stock that International Paper shareholders will receive in the Distribution is not subject to adjustment based on our performance or that of Unisource. Accordingly, because this performance may fluctuate, the relative market values of our common stock that International Paper shareholders receive in the Distribution may not reflect the performance of the individual companies at the time of the Merger.
In connection with the Transactions, International Paper shareholders or their transferees as of the record date will own approximately 51% of the common stock of the combined company on a fully-diluted basis after giving effect to the Merger. International Paper shareholders who receive our shares in the Distribution will not receive any new shares in the Merger and will continue to hold the existing shares of International Paper and SpinCo. In connection with the Distribution, SpinCo is required to make a special payment to International Paper of $400 million, subject to adjustment based on estimates of changes in the net working capital and net indebtedness of the xpedx business and Unisource, and the transaction expenses of Unisource. If the sum of the changes in the net working capital and net indebtedness of the xpedx business represents a positive change in the value of the xpedx business, the special payment to International Paper will be increased by such amount. If that amount represents a negative change in the value of the xpedx business, the special payment to International Paper will be reduced by such amount. If the sum of the Unisource transaction expenses in excess of $15 million and changes in the net working capital and net indebtedness of Unisource represents a positive change in the value of Unisource, SpinCo shall pay such amount to the UWWH Stockholder. If that amount represents a negative change in the value of Unisource, the special payment to International Paper will be increased by a corresponding amount.
Actual results may be materially lower than the financial forecasts contained in this prospectus.
This prospectus contains financial forecasts for the combined company, including expected 2014 Adjusted EBITDA, anticipated future improvements in Adjusted EBITDA, including expected improvements in Adjusted EBITDA by the end of 2017, expected cost savings and synergies and the timeline to achieve such cost savings and synergies, and the agreed-upon EBITDA target. The financial forecasts are not guarantees of performance of the combined company. The financial forecasts are forward-looking statements that are subject to a number of significant risks, uncertainties and assumptions, and should be read with caution. The financial forecasts are subjective in many respects and thus susceptible to interpretation and periodic revision based on actual experience and recent developments. You should not place undue reliance on the financial forecasts contained in this prospectus. The financial forecasts were not prepared by management of the combined company with a view toward compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, or generally accepted accounting principles in the United States.
The financial forecasts reflect numerous important assumptions made by the management of the combined company in light of current business, industry and market conditions. Many of these assumptions are beyond the combined company’s control. In preparing the financial forecasts, management of each of the companies made assumptions regarding the following matters, among others:
 
 	•	 	future general economic trends, such as inflation rates;	
 
 	•	 	conditions in the print, packaging and facilities solutions markets generally;	
 
 	•	 	selling prices for the combined company’s print, packaging and facilities solutions products;	
 
 	•	 	maintenance of contracts currently in place;	
 
 	•	 	growth in sales volumes through expansion in current markets and penetration of new markets;	
 
 	•	 	continued cost reductions from synergies resulting from the Transactions; and	
 
 	•	 	employee wages and benefits.	
 
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There can be no assurance that the assumptions made in preparing the financial forecasts or the financial forecasts themselves will prove accurate. Actual results may be materially lower than the financial forecasts. We do not intend to (and we specifically disclaims any obligation to) make publicly available any update or other revisions to the financial forecasts.
Risks Relating to the Combined Company’s Business
The industry-wide decline in demand for paper and related products could have an adverse effect on the combined company’s financial condition and results of operations.
The xpedx business and the Unisource business have relied, and the combined company will rely, heavily on the sale of paper and related products. The industry-wide decrease in demand for paper and related products in key markets the combined company serves will place continued pressure on the combined company’s revenues and profit margins and make it more difficult to maintain or grow Adjusted EBITDA. This trend is expected to continue. The failure to effectively differentiate the combined company from its competitors and the failure to grow the Packaging and Facility Solutions businesses in the face of increased use of email, increased and permanent product substitution, including less print advertising, more electronic billing, more e-commerce, fewer catalogs and a reduced volume of mail, could have an adverse impact on market share, sales and profitability through increased expenditures or decreased prices.
The combined company may not realize anticipated benefits from cost reduction efforts.
We expect to implement a number of cost reduction initiatives that we believe are necessary to position the combined company’s business for future success and growth. Future success and earnings growth depend upon our ability to achieve a lower cost structure and operate efficiently in the highly competitive business-to-business distribution industry, particularly in an environment of increased competitive activity and reduced profitability. If we are unable to realize the anticipated benefits from cost cutting efforts, the combined company could have a cost disadvantage in the marketplace, and our competitiveness and profitability could decrease.
Competition in our industry may adversely impact the combined company’s margins and our ability to retain customers and make it difficult to maintain its market share and profitability.
The business-to-business distribution industry is highly competitive, with numerous regional and local competitors, and is a mature industry characterized by slowing revenue growth. The combined company’s principal competitors include regional and local distributors in the Print segment; national distributors, national and regional manufacturers and independent brokers in the Packaging segment; and national, regional and local distributors in the Facility Solutions segment. Most of these competitors generally offer a wide range of products at prices comparable to those the combined company offers. Additionally, new competition could arise from non-traditional sources, group purchasing organizations, e-commerce, discount wholesalers such as Costco or Sam’s Club or consolidation among competitors. New competitive sources may result in increased focus on pricing and on limiting price increases, or may require increased discounting. Such competition may result in margin erosion or make it difficult to attract and retain customers.
Increased competition within the industry, reduced demand for paper, increased and permanent product substitution through less print advertising, more electronic billing, more e-commerce, fewer catalogs, a reduced volume of mail and general economic conditions have served to further increase pressure on the industry’s profit margins, and continued margin pressure within the industry may have a material adverse impact on our operating results and profitability.
Adverse developments in general business and economic conditions as well as conditions in the global capital and credit markets could have an adverse effect on the demand for the combined company’s products and the combined company’s financial condition and results of operations.
The persistent slow growth in gross domestic product (“GDP”) in recent years has adversely affected the results of operations of both xpedx and Unisource. If GDP continues to grow at a slow rate, demand for the
 
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products the combined company sells will be adversely affected. In addition, volatility in the capital and credit markets, which impacts interest rates, currency exchange rates and the availability of credit, could have a material adverse effect on the business, financial condition and results of operations of the combined company and its customers. The combined company has exposure to counterparties with which it routinely executes transactions. Such counterparties include customers and financial institutions. A bankruptcy or illiquidity event by one or more of its counterparties could have a material adverse effect on the business, financial condition and results of operations of the combined company.
In order to compete, the combined company must attract, train and retain highly qualified employees, and the failure to do so could have an adverse effect on results of operations.
To successfully compete, the combined company must attract, train and retain a large number of highly qualified employees while controlling related labor costs. Specifically, the combined company must recruit and retain qualified sales professionals. As a result of the Transactions, sales professionals may choose to leave the combined company. If the combined company were to lose a significant amount of its sales professionals, we could lose a material amount of sales, which would have a material adverse effect on our financial condition and results of operations. Many sales professionals are subject to confidentiality and non-competition agreements. If sales professionals were to violate these agreements, the combined company could seek to legally enforce these agreements and may incur substantial costs in connection with such enforcement. The combined company competes with other businesses for employees and invests significant resources in training and motivating them. There is no assurance that the combined company will be able to attract or retain highly qualified employees. The inability to retain or hire qualified personnel at economically reasonable compensation levels would restrict our ability to grow the combined company’s business and result in lower operating results and profitability.
The combined company’s business may be adversely affected by work stoppages, union negotiations and labor disputes.
Approximately 10% of the combined company’s employees are currently covered by collective bargaining or other similar labor agreements. Historically, the effects of collective bargaining and other similar labor agreements on xpedx and Unisource have not been significant. However, if a larger number of the combined company’s employees were to unionize, including in the wake of any future legislation or administrative regulation that makes it easier for employees to unionize, the effect may be negative. Any inability to negotiate acceptable new contracts under these collective bargaining arrangements could cause strikes or other work stoppages, and new contracts could result in increased operating costs. If any such strikes or other work stoppages occur, or if additional employees become represented by a union, a disruption of our operations and higher labor costs could result. Labor relations matters affecting the combined company’s suppliers of products and services could also adversely affect our business from time to time.
The loss of any of xpedx’s or Unisource’s significant customers could adversely affect the combined company’s financial condition.
xpedx’s ten largest customers generated approximately 16% of its sales in fiscal 2013, and xpedx’s largest customer accounted for approximately 4.3% of its sales in that same period. Unisource’s ten largest customers generated approximately 11.8% of its net sales in fiscal 2013, and Unisource’s largest customer comprised approximately 2.4% of its net sales in fiscal 2013. We cannot guarantee that the combined company will maintain or improve our relationships with these customers or that the combined company will continue to supply these customers at historical levels.
Generally, neither xpedx’s nor Unisource’s customers are contractually required to purchase any minimum amount of products. Should such customers purchase products sold by the combined company in significantly lower quantities than they have in the past, such decreased purchases could have a material adverse effect on the combined company’s financial condition, operating results and cash flows.
 
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In addition, consolidation among customers could also result in changes to the purchasing habits and volumes among some of xpedx’s and Unisource’s present customers. The loss of one or more of these significant customers, a significant customer’s decision to purchase xpedx’s or Unisource’s products in significantly lower quantities than they have in the past, or deterioration in the relationship with any of them could significantly affect the combined company’s financial condition, operating results and cash flows.
Some of the products that the combined company will sell are produced by other businesses of International Paper and Georgia-Pacific and other businesses of International Paper and Georgia-Pacific purchase some of the products the combined company will distribute. There is no guarantee that such arrangements will continue on the same terms on which they currently exist or at all.
The xpedx business receives a significant portion of the products it sells from other businesses of International Paper and supplies many other businesses of International Paper with the products that it distributes. Purchases by xpedx from other businesses of International Paper represented approximately 13% of xpedx’s cost of products sold in fiscal 2013. Unisource purchases certain products from Georgia-Pacific and sells certain products to Georgia-Pacific. Purchases by Unisource from Georgia-Pacific, net of applicable discounts, represented approximately 6.1% of Unisource’s cost of products sold in fiscal 2013. The combined company intends to enter into supply agreements and other commercial arrangements with International Paper in connection with the Transactions. The terms of these agreements and other arrangements will be materially consistent with current terms; however, there is no assurance that the supply agreement or other arrangements will not be terminated or allowed to lapse.
Changes in business conditions in the combined company’s international operations could adversely affect its business and results of operations.
The combined company’s operating results and business prospects could be substantially affected by risks related to Mexico, Canada and other countries where we sell and distribute our products. Some of our operations are in or near locations that have suffered from political, social, and economic issues; civil unrest; and a high level of criminal activity. In those locations where we have employees or operations, we may incur substantial costs to maintain the safety of our personnel and the security of our operations. Downturns in economic activity, adverse tax consequences or any change in social, political or labor conditions in any of the countries in which we operate could negatively affect the combined company’s financial results. In addition, our international operations are subject to regulation under U.S. law and other laws related to operations in foreign jurisdictions. For example, the Foreign Corrupt Practices Act of 1977 (the “FCPA”) prohibits U.S. companies and their representatives from offering, promising, authorizing or making payments to foreign officials for the purpose of obtaining or retaining business abroad. Failure to comply with domestic or foreign laws could result in various adverse consequences, including the imposition of civil or criminal sanctions and the prosecution of executives overseeing the combined company’s international operations.
The combined company will purchase all of the products we sell to our customers from other parties and conditions beyond our control can interrupt our supplies and increase our product costs.
As a distributor, the combined company will obtain all of its packaging, paper and facility products from third-party suppliers. The combined company’s business and financial results will be dependent on our ability to purchase products from suppliers not controlled by the combined company that we, in turn, sell to our customers. The combined company may not be able to obtain the products it needs on open credit, with market or other favorable terms, or at all. Based on historical data as of December 31, 2013, we estimate that approximately 35% of the combined company’s purchases will be made from only ten suppliers. A sustained disruption in the combined company’s ability to source product from one or more of the largest of these vendors might have a material impact on our ability to fulfill customer orders resulting in lost sales and, in rare cases, damages for late or non-delivery.
For the most part, we do not expect that the combined company will have a significant number of long-term contracts with its suppliers committing them to provide products to us. Although our purchasing volume can
 
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provide benefits when dealing with suppliers, suppliers may not provide the products and supplies needed in the quantities and at the prices requested. The combined company will also be subject to delays caused by interruption in production and increases in product costs based on conditions outside of its control. These conditions include raw material shortages, environmental restrictions on operations, work slowdowns, work interruptions, strikes or other job actions by employees of suppliers, product recalls, transportation interruptions, unavailability of fuel or increases in fuel costs, competitive demands and natural disasters or other catastrophic events. The combined company’s inability to obtain adequate supplies of paper, packaging and facility supply products as a result of any of the foregoing factors or otherwise could mean that we could not fulfill our obligations to customers, and customers may turn to other distributors.
In addition, increases in product costs may reduce our margins if we are unable to pass all or a portion of these costs along to our customers, which xpedx and Unisource have historically had difficulty doing. Any such inability may have a negative impact on our business and our profitability.
Changes in prices for raw materials, including pulp, paper and resin, could negatively impact the combined company’s results of operations and cash flows.
Changes in prices for raw materials, such as pulp, paper and resin, could significantly impact the combined company’s results of operations in the print market. Although the combined company does not produce paper products and is not directly exposed to production of raw materials risk associated with production, declines in pulp and paper prices, driven by falling secular demand, periods of industry overcapacity and overproduction by paper suppliers, may adversely affect the combined company’s revenues and net income to the extent such factors produce lower paper prices. Declining pulp and paper prices generally produce lower revenues and profits, even when volume and trading margin percentages remain constant. During periods of declining pulp and paper prices, customers may alter purchasing patterns and defer paper purchases or deplete inventory levels until long-term price stability occurs. Alternatively, if prices for raw materials rise and we are unable to pass these increases on to our customers, our results of operations and profits may also be negatively impacted.
The combined company may not be able to fully compensate for increases in fuel costs.
Volatile fuel prices have a direct impact on our industry. The cost of fuel affects the price paid by the combined company for products as well as the costs incurred to deliver products to its customers. Although we have been able to pass along a portion of increased fuel costs to our customers in the past, there is no guarantee that the combined company can continue to do so. We currently pass on some of our fuel costs through a fuel surcharge on orders, but the combined company may experience difficulties in passing all or a portion of these costs along to our customers, which may have a negative impact on our business and our profitability.
Inclement weather, anti-terrorism measures and other disruptions to the transportation network could impact the combined company’s distribution system and operations.
The combined company’s ability to provide efficient distribution of products to our customers is an integral component of our overall business strategy. Disruptions at distribution centers or shipping ports or the closure of roads or imposition of other driving bans due to events such as the flooding from Superstorm Sandy, Hurricane Irene and the outbreaks of tornadoes in 2011 and blizzards in 2010 may affect our ability to both maintain key products in inventory and deliver products to our customers on a timely basis, which may in turn adversely affect our results of operations.
Furthermore, in the aftermath of terrorist attacks in the United States, federal, state and local authorities have implemented and continue to implement various security measures that affect many parts of the transportation network in the United States and abroad. Our customers typically need quick delivery and will rely on the combined company’s on-time delivery capabilities. If security measures disrupt or impede the timing of our deliveries, we may fail to meet the needs of the combined company’s customers, or may incur increased expenses to do so. Any of these disruptions to the combined company’s operations may reduce our sales and have an adverse effect on our business, financial condition and results of operation.
 
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The combined company will be dependent on a variety of IT and telecommunications systems and the Internet, and any failure of these systems could adversely impact our business and operating results.
The combined company will depend on IT and telecommunications systems and the Internet for our operations. These systems support a variety of functions including inventory management, order placement and processing with vendors and from customers, shipping, shipment tracking and billing. The combined company will maintain redundant information systems as part of our disaster recovery program and, if necessary, are able to operate in many respects using a paper-based system to help mitigate a complete interruption in our information processing capabilities. Nonetheless, the combined company’s information systems remain vulnerable to natural disasters, wide-area telecommunications or power utility outages, terrorist or cyber-attack and other major disruptions.
Failures or significant downtime of the combined company’s IT or telecommunications systems for any reason, including as a result of disruptions from integrating the xpedx and Unisource businesses, prevent us from taking customer orders, printing product pick-lists, shipping products, billing customers and handling call volume. Sales also may be affected if our reseller and retail customers are unable to access pricing and product availability information. We will also rely on the Internet, and in particular electronic data interchange, for a large portion of our orders and information exchanges with our suppliers and customers. The Internet and individual websites have experienced a number of disruptions and slowdowns, some of which were caused by organized attacks. In addition, some websites have experienced security breakdowns. If the combined company were to experience a security breakdown, disruption or breach that compromised sensitive information, it could harm our relationships with our suppliers and customers. Disruption of the combined company’s website or the Internet in general could impair our order processing or more generally prevent our suppliers and resellers from accessing information. Failures of our systems could also lead to delivery delays and may expose us to litigation and penalties under some of our contracts. Any significant increase in the combined company’s IT and telecommunications costs or temporary or permanent loss of our IT or telecommunications systems, including as a result of disruptions from integrating the xpedx and Unisource businesses, could harm our relationships with our customers and suppliers and result in lost sales, business delays and bad publicity. The occurrence of any of these events could have an adverse effect on the combined company’s business, financial condition and results of operations.
The combined company will be subject to cyber-security risks related to breaches of security pertaining to sensitive company, customer, employee and vendor information as well as breaches in the technology that manages operations and other business processes.
The combined company’s business operations will rely upon secure IT systems for data capture, processing, storage and reporting. Our IT systems, and those of our third party providers, could become subject to cyber-attacks. Network, system, application and data breaches could result in operational disruptions or information misappropriation including, but not limited to, interruption of systems availability, denial of access to and misuse of applications required by our customers to conduct business with the combined company. Access to internal applications required to plan our operations, source materials, assemble and ship finished goods and account for orders could be denied or misused. Theft of intellectual property or trade secrets, and inappropriate disclosure of confidential information, could stem from such incidents. Any of these operational disruptions or misappropriation of information could harm the combined company’s relationship with our customers and suppliers, result in lost sales, business delays and negative publicity and could have a material effect on our business, financial condition and results of operation.
Costs to comply with environmental, health and safety laws, and to satisfy any liability or obligation imposed under such laws, could impact the combined company’s business and results of operations.
The combined company’s operations will be subject to U.S. and international environmental, health and safety laws, including laws regulating the emission or discharge of materials into the environment, the use, storage, treatment, disposal and management of hazardous substances and waste, the investigation and remediation of contamination and the health and safety of our employees and the public. The combined company
 
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could incur substantial fines or sanctions, enforcement actions (including orders limiting our operations or requiring corrective measures), investigation, remediation and closure costs and third-party claims for property damage and personal injury as a result of violations of, or liabilities or obligations under, environmental, health and safety laws. The combined company could be held liable for the costs to address contamination at any real property we have ever owned, operated or used as a disposal site.
In addition, changes in, or new interpretations of, existing laws, the discovery of previously unknown contamination, or the imposition of other environmental liabilities or obligations in the future, may lead to additional compliance or other costs that could impact the combined company’s business and results of operations. Moreover, as environmental issues, such as climate change, have become more prevalent, U.S. and foreign governments, have responded and are expected to continue to respond, with increased legislation and regulation, which could negatively affect us.
Expenditures related to the cost of compliance with laws, rules and regulations could impact the combined company’s business and results of operations.
The combined company’s operations will be subject to U.S. and international laws and regulations, including regulations of the U.S. Department of Transportation Federal Motor Carrier Safety Administration, the import and export of goods, customs regulations, Office of Foreign Asset Control and the FCPA. The combined company could incur substantial fines or sanctions, enforcement actions (including orders limiting our operations or requiring corrective measures), and third-party claims for property damage and personal injury as a result of violations of, or liabilities under, laws, regulations, codes and common law.
Tax assessments and unclaimed property audits by governmental authorities could adversely impact our operating results.
We remit a variety of taxes and fees to various governmental authorities, including federal and state income taxes, excise taxes, property taxes, sales and use taxes, and payroll taxes. The taxes and fees remitted by us are subject to review and audit by the applicable governmental authorities which could result in liability for additional assessments. In addition, we are subject to unclaimed property (escheat) laws which require us to turn over to certain government authorities the property of others held by us that has been unclaimed for a specified period of time. We are subject to audit by individual U.S. states with regard to our escheatment practices. The legislation and regulations related to tax and unclaimed property matters tend to be complex and subject to varying interpretations by both government authorities and taxpayers. Although management believes that the positions are reasonable, various taxing authorities may challenge certain of the positions we have taken, which may also potentially result in additional liabilities for taxes, unclaimed property and interest in excess of accrued liabilities. Our positions are reviewed as events occur such as the availability of new information, the lapsing of applicable statutes of limitations, the conclusion of tax audits, the measurement of additional estimated liability based on current calculations, the identification of new tax contingencies, or the rendering of relevant court decisions. An unfavorable resolution of assessments by a governmental authority could negatively impact our results of operations and cash flows in future periods.
Our inability to renew existing leases on acceptable terms, negotiate rent decreases or concessions and identify affordable real estate could affect our operating results.
We may be unable to successfully negotiate or renew existing leases at attractive rents, negotiate rent decreases or concessions or identify affordable real estate. A key factor in our operating performance is the location and associated real estate costs of our distribution centers. In particular, approximately 40 of Unisource’s lease and sublease agreements expire in June 2018. Our inability to negotiate or renew these or any other leases on favorable terms, or at all, could have a material adverse effect on our business and results of operations due to, among other things, any resultant increased lease payments.
 
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Results of legal proceedings could have a material effect on our consolidated financial statements.
The combined company will rely on manufacturers and other suppliers to provide us with the products and equipment we sell, distribute and service. As we will not have direct control over the quality of the products manufactured or supplied by such third-party suppliers, we will be exposed to risks relating to the quality of the products and equipment we sell, distribute and service. It is possible that inventory from a manufacturer or supplier could be sold to our customers and later be alleged to have quality problems or to have caused personal injury, subjecting the combined company to potential claims from customers or third parties. Our ability to hold such manufacturer or supplier liable will depend on a variety of factors, including its financial viability. Moreover, as the combined company increases the number of private label products we distribute, our exposure to potential liability for product liability claims may increase. Finally, even if the combined company is successful in defending any claim relating to the products or equipment we distribute, claims of this nature could negatively impact our reputation and customer confidence in our products, equipment and company. xpedx and Unisource have been subject to such claims in the past, which have been resolved without material financial impact. The combined company also operates a significant number of facilities and a large fleet of trucks and other vehicles and therefore faces the risk of premises-related liabilities and vehicle-related liabilities including traffic accidents.
From time to time, we may also be involved in government inquiries and investigations, as well as class action, employment and other litigation. We cannot predict with certainty the outcomes of these legal proceedings and other contingencies, including environmental remediation and other proceedings commenced by government authorities. The costs and other effects of pending litigation against us cannot be determined with certainty. Although we believe that the outcome of any pending or future lawsuits or claims will not have a material adverse effect on the combined company’s business or consolidated financial statements, there can be no assurance that the outcome of any lawsuit or claim will be as expected. The defense of these lawsuits may divert our management’s attention, and significant expenses may be incurred in defending these lawsuits. In addition, we may be required to pay damage awards or settlements, or become subject to injunctions or other equitable remedies, that could have a material adverse effect on the combined company’s business, financial condition, results of operations and cash flows.
While we currently maintain insurance coverage to address a portion of these types of liabilities, we cannot make assurances that we will be able to obtain such insurance on acceptable terms in the future, if at all, or that any such insurance will provide adequate coverage against potential claims. In addition, the combined company may choose not to seek to obtain such insurance in the future. Moreover, indemnification rights that we have may be insufficient or unavailable to protect us against potential loss exposures.
The combined company may not be able to adequately protect its intellectual property and other proprietary rights that are material to the combined company, or to defend successfully against intellectual property infringement claims by third parties.
The combined company’s ability to compete effectively depends in part upon its intellectual property rights, including but not limited to trademarks, copyrights and proprietary technology. The use of contractual provisions, confidentiality procedures and agreements, and trademark, copyright, unfair competition, trade secret and other laws to protect intellectual property rights and proprietary technology may not be adequate. Litigation may be necessary to enforce the combined company’s intellectual property rights and protect proprietary technology, or to defend against claims by third parties that the conduct of the combined company or its use of intellectual property infringes upon such third party’s intellectual property rights. Any intellectual property litigation or claims brought against the combined company, whether or not meritorious, could result in substantial costs and diversion of its resources, and there can be no assurances that favorable final outcomes will be obtained in all cases. The terms of any settlement or judgment may require the combined company to pay substantial amounts to the other party or cease exercising its rights in such intellectual property, including ceasing the use of certain trademarks used by us to distinguish our services from those of others or ceasing the exercise of our rights in copyrightable works. In addition, the combined company may have to seek a license to continue practices found to be in violation of a third party’s rights, which may not be available on reasonable terms, or at all. The combined company’s business, financial condition or results of operations could be adversely affected as a result.
 
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The combined company’s pension and health care costs are subject to numerous factors which could cause these costs to change.
The combined company’s pension costs are dependent upon numerous factors resulting from actual plan experience and assumptions of future experience, including actuarial assumptions regarding life expectancies. Pension plan assets are primarily made up of equity and fixed income investments. Fluctuations in actual equity market returns, changes in general interest rates and changes in the number of retirees may result in increased pension costs in future periods. Significant changes in any of these factors may adversely impact the combined company’s cash flows, financial condition and results of operations.
As a division of International Paper employing less than 8% of International Paper’s total U.S. employee population, our experience rating and resulting health care costs and rates were blended with International Paper and the rest of its employee population. Once separated from International Paper our health care costs and rates will be more reflective of the experiences of our employees, rather than those of International Paper. As a result, our health care costs may be greater than our historical financial statements reflect.
The combined company will participate in multiemployer pension plans and multiemployer health and welfare plans, which could create additional obligations and payment liabilities.
The combined company will contribute to multiemployer defined benefit pension as well as multiemployer health and welfare plans under the terms of collective-bargaining agreements that cover certain unionized employee groups in the United States. The risks of participating in multiemployer pension plans differ from single employer-sponsored plans and such plans are subject to regulation under the Pension Protection Act (PPA). Multiemployer pension plans are cost-sharing plans subject to collective-bargaining agreements. Contributions to a multiemployer plan by one employer are not specifically earmarked for its employees and may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan are borne by the remaining participating employers. In addition, if a multiemployer plan is determined to be underfunded based on the criteria established by the PPA, the plan may be required to implement a financial improvement plan or rehabilitation plan that may require additional contributions or surcharges by participating employers.
In addition to the contributions discussed above, the combined company could be obligated to pay additional amounts, known as withdrawal liability, upon decrease or cessation of participation in a multiemployer pension plan. While an employer may obtain an estimate of such liability, the final calculation of withdrawal liability may not be determined for an extended period. The cash obligation of such withdrawal liability is payable over a 20 year period.
Risks Relating to SpinCo’s Common Stock
We are a holding company with no operations of our own, and we depend on our subsidiaries for cash to fund all of our operations and expenses, including making future dividend payments, if any.
Our operations, including the Unisource business, will be conducted almost entirely through our subsidiaries and our ability to generate cash to meet our debt service obligations or to pay dividends is highly dependent on the earnings and the receipt of funds from our subsidiaries via dividends or intercompany loans. We do not currently expect to declare or pay dividends on our common stock for the foreseeable future. Furthermore, we are restricted under the Contribution and Distribution Agreement from declaring or paying special dividends through the second anniversary of the Closing Date (or, in certain circumstances, January 1, 2016). To the extent that we determine in the future to pay dividends on our common stock, existing indebtedness, including our ABL Facility, and debt incurred by our subsidiaries, may significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us, which will negatively impact our ability to pay dividends to our shareholders. In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our common stock. There can be no assurance that we will pay a dividend or continue to pay any dividend if we do commence the payment of dividends.
 
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There is currently no public market for our common stock and we cannot be certain that an active trading market will develop or be sustained after the Transactions, and following the Transactions our stock price may fluctuate significantly.
There is currently no public market for our common stock. It is anticipated that on or shortly before the record date for the Distribution, trading of our common stock will begin on a “when-issued” basis and such trading will continue through the distribution date. However, there can be no assurance that an active trading market for our common stock will develop as a result of the Transactions or be sustained in the future. The lack of an active market may make it more difficult for you to sell our common stock and could lead to the price of our common stock being depressed or more volatile. We cannot predict the prices at which our common stock may trade after the Transactions. The market price of our common stock may fluctuate widely, depending on many factors, some of which may be beyond our control, including:
 
 	•	 	the combined company’s business profile and market capitalization may not fit the investment objectives of some International Paper shareholders and, as a result, these shareholders may sell our shares after the Transactions are completed;	
 
 	•	 	actual or anticipated fluctuations in the operating results of the combined company due to factors related to our business;	
 
 	•	 	success or failure of the strategy of our combined company;	
 
 	•	 	the quarterly or annual earnings of the combined company, or those of other companies in our industry;	
 
 	•	 	continued industry-wide decrease in demand for paper and related products;	
 
 	•	 	our ability to obtain third-party financing as needed;	
 
 	•	 	announcements by us or our competitors of significant acquisitions or dispositions;	
 
 	•	 	the inability to issue equity securities or convertible debt securities during the two year period following the date of the Distribution without jeopardizing the intended tax consequences of the Transactions;	
 
 	•	 	restrictions on our ability to pay dividends under our ABL Facility;	
 
 	•	 	changes in accounting standards, policies, guidance, interpretations or principles;	
 
 	•	 	the failure of securities analysts to cover our common stock after the Transactions;	
 
 	•	 	changes in earnings estimates by securities analysts or the combined company’s ability to meet those estimates;	
 
 	•	 	the operating and stock price performance of other comparable companies;	
 
 	•	 	investor perception of the combined company;	
 
 	•	 	natural or environmental disasters that investors believe may affect the combined company;	
 
 	•	 	overall market fluctuations;	
 
 	•	 	results from any material litigation or government investigation;	
 
 	•	 	changes in laws and regulations affecting the combined company or any of the principal products sold by the combined company; and	
 
 	•	 	general economic conditions and other external factors.	
Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could adversely affect the trading price of our common stock. Until an orderly market develops, the trading prices for our common stock may fluctuate significantly.
 
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After the completion of the Merger, sales of our common stock may negatively affect its market price.
The SpinCo common stock that International Paper distributes to its shareholders in the Distribution may be sold immediately in the public market. It is likely that some International Paper shareholders, including some large shareholders, may sell our common stock received in the Transactions for various reasons such as if our business profile or market capitalization as a combined company following the Transactions does not fit their investment objectives. In particular, International Paper is a member of the S&P 500 Index, while the combined company will not initially be and may not be in the future. Accordingly, certain International Paper shareholders may elect or be required to sell our shares following the Transactions due to investment guidelines or other reasons. The sales of significant amounts of our common stock or the perception in the market that this will occur may result in the lowering of the market price of our common stock. A fund associated with International Paper’s 401(k) plans will receive shares of SpinCo common stock in the Distribution as a result of its ownership of International Paper common stock, representing approximately 1.5% of SpinCo’s common stock as of the distribution date. We anticipate that the 401(k) plans will sell all of these shares, to the extent not sold by individual 401(k) plan participants by December 10, 2014. Following the Transactions, approximately 49% of our outstanding shares of common stock will be owned by the UWWH Stockholder. Pursuant to the Registration Rights Agreement, all of these shares will be eligible to be registered, subject to certain limitations, following the expiration of a 180-day lock-up period. These shares will be restricted securities within the meaning of Rule 144 under the Securities Act and will also be eligible for resale in the public market without registration subject to volume, manner of sale and holding period limitations under Rule 144 under the Securities Act. If some or all of these shares are sold, or if it is perceived that they will be sold, in the public market, the price of our common stock could decline substantially.
If securities or industry analysts do not publish research or publish unfavorable research about the combined company, our stock price and trading volume could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about the combined company and our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If there is no coverage of the combined company by securities or industry analysts, the trading price for our stock would be negatively impacted. In the event we obtain securities or industry analyst coverage, if one or more of these analysts downgrades our stock or publishes misleading or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price or trading volume to decline.
A few shareholders may exert significant control over the direction of the combined company. Ownership of our common stock will be highly concentrated after the Transactions and could prevent you and other shareholders from influencing significant corporate decisions.
Following the completion of the Transactions, the UWWH Stockholder, controlled by Bain Capital, will beneficially own approximately 49% of the outstanding shares of our common stock. As a result, the UWWH Stockholder will exercise significant influence over all matters requiring shareholder approval for the foreseeable future, including approval of significant corporate transactions, which may reduce the market price of our common stock. The interests of the UWWH Stockholder may conflict with the interests of our other shareholders. Our board of directors intends to adopt corporate governance guidelines that will, among other things, address potential conflicts between a director’s interests and our interests. In addition, we intend to adopt a code of business conduct that, among other things, requires our employees to avoid actions or relationships that might conflict or appear to conflict with their job responsibilities or our interests and to disclose their outside activities, financial interests or relationships that may present a possible conflict of interest or the appearance of a conflict to management or corporate counsel. These corporate governance guidelines and code of business ethics will not, by themselves, prohibit transactions with our principal shareholders.
 
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Under our amended and restated certificate of incorporation, the UWWH Stockholder, Bain Capital Fund VII, L.P. and their respective affiliates and, in some circumstances, any of our directors and officers who is also a director, officer, employee, member or partner of the UWWH Stockholder, Bain Capital Fund VII, L.P. and their respective affiliates, have no obligation to offer us corporate opportunities.
The policies relating to corporate opportunities and transactions with the UWWH Stockholder, Bain Capital Fund VII, L.P. and their respective affiliates to be set forth in our amended and restated certificate of incorporation address potential conflicts of interest between SpinCo, on the one hand, and the UWWH Stockholder, Bain Capital Fund VII, L.P., their respective affiliates and their respective officers and directors who are directors or officers of our company, on the other hand. By becoming a shareholder in SpinCo, you will be deemed to have notice of and have consented to these provisions of our amended and restated certificate of incorporation. Although these provisions are designed to resolve conflicts between us and the UWWH Stockholder, Bain Capital Fund VII, L.P. and their respective affiliates fairly, conflicts may not be so resolved.
Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated by-laws could discourage, delay or prevent a change of control of our company and may affect the trading price of our common stock.
Our amended and restated certificate of incorporation and amended and restated by-laws include a number of provisions that may discourage, delay or prevent a change in our management or control over us that shareholders may consider favorable. For example, our amended and restated certificate of incorporation and amended and restated by-laws will collectively:
 
 	•	 	authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt;	
 
 	•	 	limit the ability of shareholders to remove directors;	
 
 	•	 	provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office;	
 
 	•	 	prohibit shareholders from calling special meetings of shareholders unless called by the holders of not less than 20% of our outstanding shares of common stock;	
 
 	•	 	prohibit shareholder action by written consent, unless initiated by the holders of not less than 20% of the outstanding shares of common stock;	
 
 	•	 	establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our shareholders; and	
 
 	•	 	require the approval of holders of at least a majority of the outstanding shares of our common stock to amend our amended and restated by-laws and certain provisions of our amended and restated certificate of incorporation.	
These provisions may prevent our shareholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if the provisions are viewed as discouraging takeover attempts in the future.
Our amended and restated certificate of incorporation and amended and restated by-laws may also make it difficult for shareholders to replace or remove our management. These provisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our shareholders.
We do not intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
We do not intend to declare and pay dividends on our common stock for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth, to develop our business, for working
 
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capital needs and for general corporate purposes. Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future and the success of an investment in shares of our common stock will depend upon any future appreciation in their value. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our shareholders have received their shares in the Distribution. In addition, our operations are conducted almost entirely through our subsidiaries. As such, to the extent that we determine in the future to pay dividends on our common stock, none of our subsidiaries will be obligated to make funds available to us for the payment of dividends. Further, agreements governing the ABL Facility will restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. We are also restricted under the Contribution and Distribution Agreement from declaring or paying special dividends through the second anniversary of the Closing Date (or, in certain circumstances, January 1, 2016). In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our common stock.
Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.
Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our shareholders by any of our directors, officers, employees or agents, (iii) any action asserting a claim against us arising under the DGCL or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine. By becoming a shareholder in our company, you will be deemed to have notice of and have consented to the provisions of our amended and restated certificate of incorporation related to choice of forum. The choice of forum provision in our amended and restated certificate of incorporation may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.
 
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 NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION
This prospectus includes forward-looking statements, including in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of xpedx,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Unisource,” “Business of xpedx” and “Business of Unisource.” These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations concerning our market position, anticipated synergies from the Merger and the timeline for achieving those synergies, expected 2014 Adjusted EBITDA, anticipated future improvement in Adjusted EBITDA, including expected improvements in Adjusted EBITDA by the end of 2017, the agreed-upon EBITDA target, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this prospectus.
Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include those set forth under “Risk Factors,” as well as, among others, risks and uncertainties relating to:
 
 	•	 	our ability to realize the anticipated synergies, cost savings and growth opportunities from the Merger;	
 
 	•	 	our ability to successfully integrate the xpedx business with the Unisource business following the Transactions;	
 
 	•	 	our ability to comply with public company reporting, disclosure controls and internal control over financial reporting requirements;	
 
 	•	 	continued industry-wide decrease in demand for paper and related products;	
 
 	•	 	unanticipated costs associated with infrastructure and network systems integration and planning following the Merger;	
 
 	•	 	the combined company’s substantial indebtedness;	
 
 	•	 	restrictive covenants in our financing agreements;	
 
 	•	 	our ability to provide or replace benefits and services that historically have been provided by International Paper;	
 
 	•	 	the pendency of the Merger adversely affecting the business and operations of xpedx and Unisource;	
 
 	•	 	incurrence of significant one-time costs;	
 
 	•	 	unfavorable economic conditions in our industry and the economy as a whole;	
 
 	•	 	our ability to realize anticipated benefits from cost reduction efforts;	
 
 	•	 	our ability to compete effectively;	
 
 	•	 	expiration or termination of our supplier and sales relationships with businesses of International Paper and Georgia-Pacific;	
 
 	•	 	our ability to attract and retain qualified employees and key personnel;	
 
 	•	 	work stoppages, union negotiations and labor disputes;	
 
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 	•	 	loss of significant customers;	
 
 	•	 	changes in business conditions in our international operations;	
 
 	•	 	our reliance on our suppliers;	
 
 	•	 	fuel cost increases;	
 
 	•	 	inclement weather, anti-terrorism measures and other disruptions to the transportation network;	
 
 	•	 	reliability of the combined company’s IT and telecommunications systems and the Internet;	
 
 	•	 	cyber-security risks relating to breaches of security pertaining to sensitive information;	
 
 	•	 	unanticipated costs to comply with environmental, health and safety laws and other laws, rules and regulation;	
 
 	•	 	our ability to renew existing leases on acceptable terms;	
 
 	•	 	adverse results in legal proceedings; and	
 
 	•	 	unanticipated pension and health care costs.	
Any of the foregoing events, or other events, could cause financial information to vary materially from the forward-looking statements included in this prospectus. You should consider these important factors, as well as the risk factors set forth in this prospectus, in evaluating any statement made in this prospectus. See “Risk Factors.” For the foregoing reasons, you are cautioned against relying on any forward-looking statements. SpinCo does not undertake any obligation to update or revise these forward-looking statements, except as required by law.
 
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 THE TRANSACTIONS
Background of the Distribution and the Merger
International Paper, SpinCo, UWWH and UWW have agreed pursuant to the Merger Agreement to merge UWWH with and into SpinCo, with SpinCo as the surviving corporation. Prior to consummating the Merger and pursuant to the Contribution and Distribution Agreement, International Paper will transfer the xpedx business to a subsidiary of SpinCo and subsequently distribute all of the shares of SpinCo common stock outstanding prior to the Merger to holders of International Paper common stock on a pro rata basis in connection with the Distribution. Immediately following the Distribution, UWWH and SpinCo will consummate the Merger upon the terms and subject to the conditions of the Merger Agreement, with SpinCo as the surviving corporation. xpedx Intermediate, which will be a wholly-owned, direct subsidiary of SpinCo will then merge with and into UWW, and UWW will survive the Subsidiary Merger as a wholly-owned, direct subsidiary of SpinCo. Immediately after consummation of the Merger, on a fully-diluted basis, approximately 51% of SpinCo common stock will be held by International Paper shareholders and approximately 49% of SpinCo common stock will be held by the UWWH Stockholder. After the Transactions, SpinCo will be an independent, publicly-traded company that operates the Unisource and the xpedx businesses.
A RMT transaction is a spin-off structure in which, as part of a plan, a merger partner, here UWWH, merges with the spun-off subsidiary, here SpinCo, in a tax-free transaction. To ensure that a RMT transaction remains tax free to the distributing parent and the distributing parent’s shareholders the transaction must meet several criteria, including that immediately following the transaction, historic shareholders of the distributing parent must own more than 50% of the stock by vote and value of the combined company. The Transactions were structured as a RMT transaction to provide a tax-free transaction for International Paper and its shareholders.
The discussions with respect to the Transactions were initiated when Unisource approached International Paper about a possible transaction involving xpedx, and on April 22, 2013, International Paper announced that it had entered into a letter of intent with UWWH regarding a proposed business combination of xpedx and Unisource. The parties negotiated the transaction after entering into the non-binding letter of intent and entered into definitive agreements with respect to the Transactions on January 28, 2014.
The UWWH board of directors (i) has approved and declared advisable, and in the best interests of UWWH and the UWWH Stockholder, the Merger Agreement and the Transactions, including the Merger, and (ii) has recommended the adoption by the UWWH Stockholder of the Merger Agreement and its approval of the Transactions. The UWW board of directors (i) has approved and declared advisable, and in the best interests of UWW and its sole shareholder, UWWH, the Merger Agreement and the Transactions, including the Subsidiary Merger, and (ii) has recommended the adoption by UWWH, as the sole shareholder of UWW, of the Merger Agreement and its approval of the Transactions.
International Paper’s Reasons for the Transactions
International Paper determined that the Transactions would be in the best interests of International Paper and its shareholders because the Transactions would provide a number of key benefits, including primarily: (i) greater strategic focus of resources and management’s efforts for each of International Paper and for the combined company, (ii) the special payment, (iii) direct and differentiated access by each of International Paper and the combined company to capital resources and (iv) increased value to International Paper’s shareholders, in particular the combined company’s anticipated value on a stand-alone basis. In assessing and approving the Transactions, International Paper considered the unavailability of alternative transactions that would produce similar or better results for International Paper and its shareholders, and the spinoff’s facilitating the strategic combination of the xpedx and Unisource businesses.
To ensure tax-free treatment of the Transactions, a RMT transaction requires, among other things, that the distributing parent’s stockholders receive more than 50% of the stock by vote and value of the combined
 
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company. The approximate 51% ownership of the International Paper shareholders following the Merger was determined, in part, based on the tax requirements applicable to the RMT transaction structure. Additionally, the approximate 51% ownership of the International Paper shareholders, when coupled with the special payment to International Paper and the potential earnout payment, reflects the relative valuation of each company to the Merger as determined by the parties during extensive negotiations. The $400 million special payment, subject to certain adjustments, to International Paper and the potential $100 million earnout payment were the product of extensive negotiation between the parties and reflect the relative contribution of each of xpedx and Unisource to the combined company.
The International Paper board of directors has approved and declared advisable, and in the best interests of the International Paper shareholders, the Merger Agreement and the Contribution and Distribution Agreement and the Transactions, including the Distribution and the Merger. Finally, the SpinCo board of directors (i) has approved and declared advisable, and in the best interests of SpinCo and its sole shareholder, International Paper, the Merger Agreement and the Contribution and Distribution Agreement and the Transactions, including the Contribution and the Merger, and (ii) has recommended the adoption by International Paper, as the sole shareholder of SpinCo, of the Merger Agreement and its approval of the Transactions. International Paper, as the sole shareholder of SpinCo, has approved and adopted the Merger Agreement. International Paper, as the sole member and managing member of xpedx Intermediate and xpedx LLC, has approved and adopted the Merger Agreement and the Transactions, including the Subsidiary Merger.
You are encouraged to read carefully the sections titled “The Merger Agreement” and “The Contribution and Distribution Agreement and the Ancillary Agreements,” because they set forth the terms of the Merger and the Distribution, respectively.
Structure of the Spin-Off and Merger
Below is a step-by-step list describing the sequence of material events relating to the Distribution and the Merger. Each of these events is discussed in more detail elsewhere in this prospectus. We anticipate that the steps will occur in the following order:
Step 1—International Paper will cause all non-U.S. xpedx assets, liabilities and entities (other than those owned or owed directly or indirectly by xpedx International, Inc., which is a U.S. subsidiary of International Paper) to be directly or indirectly transferred, assigned, delivered and conveyed to or assumed by a Luxembourg entity to be formed as an indirect, wholly-owned subsidiary of International Paper.
Step 2—International Paper will contribute 100% of the equity interests of the Luxembourg entity and xpedx International, Inc., and any xpedx assets not held by the Luxembourg entity or xpedx International, Inc., to xpedx LLC or a subsidiary of xpedx LLC and will cause xpedx LLC or its subsidiaries to assume any xpedx liabilities not assumed by the Luxembourg entity or otherwise held by xpedx International, Inc.
Step 3—International Paper will contribute all of the membership interest in xpedx LLC to xpedx Intermediate and then contribute all of the membership interest in xpedx Intermediate to SpinCo.
Step 4—xpedx LLC will incur indebtedness under the ABL Facility and will distribute all or a portion of the proceeds to xpedx Intermediate, which in turn will distribute such proceeds to SpinCo to fund the special payment to International Paper.
Step 5—In exchange for the Contribution, SpinCo will issue shares of SpinCo common stock to International Paper and make a special payment to International Paper of $400 million, subject to certain adjustments.
Step 6—International Paper will effect the Distribution by distributing all of the shares of SpinCo common stock it holds to International Paper shareholders as of the record date of the Distribution on a pro rata basis. Shareholders otherwise entitled to receive fractional shares will receive cash in lieu thereof.
 
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Step 7—UWWH will merge with and into SpinCo with SpinCo being the surviving corporation of the Merger. As a result of the Merger, in exchange for its shares, the UWWH Stockholder will receive a number of shares of SpinCo common stock for each share of UWWH common stock that it held at the time of the Merger that will result in International Paper’s shareholders owning approximately 51%, and the UWWH Stockholder owning approximately 49%, of the common stock of SpinCo on a fully-diluted basis immediately following the Merger.
Step 8—Immediately following completion of the Merger, xpedx Intermediate will merge with and into UWW, with UWW surviving the Subsidiary Merger as a wholly-owned subsidiary of SpinCo. Following completion of the Subsidiary Merger, Unisource will accede to incur indebtedness under the ABL Facility, the proceeds of which will be used to repay all third-party indebtedness for borrowed money of Unisource and its subsidiaries outstanding on the Closing Date (except for capitalized lease obligations).
After the Distribution, International Paper will not own any shares of SpinCo common stock.
Manner of Effecting the Distribution
Before we can complete the Merger, we must consummate the Distribution. The Distribution will be a pro rata distribution of shares of SpinCo common stock to holders of International Paper common stock. Each share of International Paper common stock outstanding as of the record date will entitle its holder to receive a number of shares of SpinCo common stock, as determined by a formula based on the number of shares of International Paper common stock outstanding at 5:00 p.m., New York City time, on the record date. Each such holder will receive a number of shares of SpinCo common stock equal to the percentage of the total number of SpinCo shares of common stock outstanding as of the time of the Distribution as is equal to a fraction, (a) the numerator of which is the total number of issued and outstanding International Paper shares of common stock held by such holder as of the record date and (b) the denominator of which is the total number of International Paper shares of common stock issued and outstanding as of the record date (excluding treasury shares held by International Paper and any other International Paper shares otherwise held by International Paper or one of its subsidiaries). Based on the number of International Paper shares of common stock outstanding as of June 9, 2014, we expect the distribution ratio to be approximately 0.0188 SpinCo shares for each share of International Paper common stock. Although the number of International Paper shares of common stock outstanding may increase or decrease prior to the record date and as a result this distribution ratio may change, it will nonetheless result in International Paper shareholders owning approximately 51%, and the UWWH Stockholder owning approximately 49%, of the common stock of SpinCo on a fully-diluted basis immediately following the Merger.
How You Will Receive SpinCo Common Stock
Upon the Distribution, the shares of SpinCo common stock distributed to each record holder of International Paper common stock on the record date will be registered in such record holder’s name on the share registry books of SpinCo, and such International Paper record holder will become the record holder of that number of shares of SpinCo common stock.
SpinCo common stock will be issued as uncertificated shares. This means that we will not issue physical stock certificates. SpinCo common stock will be issued electronically, as of the distribution date, to you or to your bank or brokerage firm on your behalf by way of direct registration in book-entry form. Registration in book-entry form refers to a method of recording stock ownership when no physical stock certificates are issued to shareholders.
Commencing on or shortly after the distribution date, if you hold physical stock certificates that represent your shares of International Paper common stock and you are the registered holder of the shares of International Paper common stock represented by those certificates, the distribution agent will mail to you an account statement that indicates the number of our shares of common stock that have been registered in book-entry form in your name.
 
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Many of International Paper’s shareholders hold their International Paper common stock through a bank or brokerage firm. In such cases, the bank or brokerage firm would be said to hold the share of common stock in “street name” and ownership would be recorded on the bank or brokerage firm’s books. If you hold your International Paper common stock through a bank or brokerage firm, your bank or brokerage firm will credit your account for the SpinCo common stock that you are entitled to receive in the Distribution. If you have any questions concerning the mechanics of having shares of common stock held in “street name,” we encourage you to contact your bank or brokerage firm.
No International Paper shareholder will be required to pay any cash or other consideration for shares of SpinCo common stock received in the distribution, or to surrender or exchange International Paper shares of common stock in order to receive shares of SpinCo common stock. No vote of International Paper shareholders is required or sought in connection with the Transactions, and International Paper shareholders will have no appraisal rights in connection with the Transactions.
Treatment of Fractional Shares
The distribution agent will not deliver any fractional shares of our common stock in connection with the Distribution. Instead, the distribution agent will aggregate all fractional shares of SpinCo common stock and sell them on behalf of those holders who otherwise would be entitled to receive a fractional share. We anticipate that these sales will occur as soon as practicable after the distribution date. Those holders will then receive a cash payment in the form of a check or wire transfer, as applicable, in an amount equal to their pro rata share of the total net proceeds of those sales. If you physically hold International Paper stock certificates or hold your stock in book-entry form, your check for any cash that you may be entitled to receive instead of fractional shares of our common stock will be mailed to you separately, or if applicable and practicable, a deposit will be made by wire transfer provided you are enrolled in direct deposit.
It is expected that all fractional shares held in street name will be aggregated and sold by brokers or other nominees according to their standard procedures and that brokers or other nominees may request the distribution agent to sell the fractional shares on their behalf. The distribution agent, in its sole discretion, without any influence from International Paper or SpinCo, will determine when, how, through which broker-dealer and at what price to sell the whole shares. Any broker-dealer used by the distribution agent will not be an affiliate of either International Paper or us. Any applicable expenses, including brokerage fees, will be paid by us. You should contact your broker or other nominee for additional details.
None of International Paper, SpinCo or the distribution agent will guarantee any minimum sale price for the fractional shares of our common stock. Neither we nor International Paper will pay any interest on the proceeds from the sale of fractional shares. The receipt of cash in lieu of fractional shares will generally be taxable to the recipient shareholders. See “—Material U.S. Federal Income Tax Consequences of the Transactions.”
Effects of the Distribution and Merger on International Paper Stock Options and Other International Paper Stock-Based Awards
International Paper granted stock options in 2004, which have expiration dates of May 10, 2014 and October 11, 2014. These options are currently fully vested. Employees of International Paper who hold International Paper options will retain the options and will not be granted SpinCo options (as replacement for such International Paper options) in connection with the Transactions. No adjustment to International Paper options or exercise prices will be made by reason of the Transactions. Any outstanding options held by employees of International Paper who will be employed by SpinCo following the closing of the Transactions will be treated by International Paper in accordance with the terms of the relevant International Paper equity incentive plan as though each employee incurred a termination of employment without cause from International Paper as of the closing of the Transactions.
Certain International Paper employees hold International Paper Performance Share Plan (“PSP”) awards pursuant to which an employee has been granted units that are paid in International Paper common stock at the
 
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end of a three-year period. The amounts earned under the PSP fluctuate based on the performance of International Paper, measured at the end of each year in the three-year period. No adjustment to the performance metrics of the PSP awards by reason of the Transactions is currently contemplated. Current International Paper employees who will be employed by SpinCo following the Transactions will continue to hold the 2012, 2013, and 2014 grants through the remainder of the performance period. The amounts to which these individuals will be entitled will be based on International Paper’s actual performance during the performance period but will be prorated based on the period of time from the grant date through the occurrence of the Transactions. Payments in respect of these awards will be paid in February of the year following the end of the relevant three-year period (e.g., the employee’s pro rata portion of the 2012 grant will be paid in February 2015).
Certain employees of International Paper also hold restricted shares of International Paper common stock. No adjustment to International Paper restricted stock will be made for the value of SpinCo. Other than Mary A. Laschinger, Chief Executive Officer of SpinCo, no employee of the xpedx business currently holds International Paper restricted stock awards. The awards of restricted stock currently held by Ms. Laschinger will vest by reason of the Transactions.
Material U.S. Federal Income Tax Consequences of the Transactions
The following is a summary of the material U.S. federal income tax consequences of the Transactions to SpinCo, International Paper and the International Paper shareholders. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations promulgated or proposed thereunder and administrative and judicial interpretations thereof, all as in effect on the date hereof, and all of which are subject to change, possibly with retroactive effect, or to different interpretation. This summary does not address all of the U.S. federal income tax consequences of the Transactions. In particular, it may not address U.S. federal income tax considerations applicable to the International Paper shareholders subject to special treatment under U.S. federal income tax law, such as financial institutions, dealers in securities, traders in securities who elect to apply a mark-to-market method of accounting, insurance companies, tax-exempt entities, partnerships and other pass-through entities, shareholders who hold their shares as part of a “hedge,” “straddle,” “conversion” or “constructive sale” transaction, shareholders who are subject to the alternative minimum tax and shareholders who acquired their shares upon the exercise of employee stock options or otherwise as compensation. In addition, this summary is limited to shareholders that hold their International Paper and SpinCo common stock as a capital asset. This summary does not address the U.S. federal income tax considerations applicable to the UWWH Stockholder or any of its direct or indirect owners. Finally, this discussion does not address any U.S. state or local or non-U.S. tax considerations or any U.S. federal estate, gift or alternative minimum tax considerations.
This summary is limited to the International Paper shareholders that are United States holders. A United States holder is a beneficial owner of International Paper stock that, for U.S. federal income tax purposes, is (i) an individual who is a citizen or resident of the United States, (ii) a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source or (iv) a trust (x) with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions or (y) that has in effect a valid election under applicable U.S. Treasury regulations to be treated as a U.S. person.
If an entity treated as a partnership for U.S. federal income tax purposes holds stock of International Paper or SpinCo, the U.S. federal income tax considerations relating to such investment will depend in part upon the status and activities of such entity and the particular partner. Any such entity should consult its own tax advisor regarding the U.S. federal income tax considerations applicable to it and its partners of the Transactions.
INTERNATIONAL PAPER’S SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE TRANSACTIONS TO THEM, INCLUDING THE EFFECTS OF UNITED STATES FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
 
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The Spin-Off
The Transactions are conditioned upon International Paper’s receipt of a private letter ruling from the IRS to the effect that the spin-off and certain related transactions will qualify as tax-free to International Paper and the International Paper shareholders for U.S. federal income tax purposes. Although a private letter ruling from the IRS generally is binding on the IRS, the IRS ruling does not rule that the spin-off satisfies every requirement for a tax-free spin-off under Section 355 of the Code, and the parties will rely solely on the opinion of counsel for comfort that such additional requirements are satisfied.
Our and International Paper’s obligations to complete the Transactions are also conditioned upon International Paper’s and SpinCo’s receipt of an opinion of Debevoise, to the effect that the spin-off will qualify as tax-free to International Paper and the International Paper shareholders (the “Spin Opinion of Counsel”), though we expect that the condition that SpinCo receive the Spin Opinion of Counsel will be waived. The Spin Opinion of Counsel will rely on the IRS ruling as to matters covered by the IRS ruling.
The IRS ruling and the Spin Opinion of Counsel will be based on, among other things, certain representations and assumptions as to factual matters made by us, International Paper and UWWH, including assumptions concerning Section 355(e) of the Code as discussed below. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the IRS ruling or the Spin Opinion of Counsel. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the IRS ruling and the Spin Opinion of Counsel will be based on current law, and cannot be relied upon if current law changes with retroactive effect.
The IRS ruling concludes that:
 
 	(1)	the contribution by International Paper to SpinCo of 100% of the membership interests in xpedx Intermediate in exchange for additional shares of our common stock and receipt by International Paper of the special cash payment, followed by the distribution of our common stock in the spin-off, will qualify as a reorganization within the meaning of Section 368(a)(1)(D) of the Code, and International Paper and SpinCo will each be a party to a reorganization within the meaning of Section 368(b) of the Code;	
 
 	(2)	no gain or loss will be recognized by International Paper on the contribution to SpinCo of 100% of the membership interests in xpedx Intermediate, receipt of the special payment or distribution of our common stock in the spin-off under Section 361 of the Code (except that the IRS ruling does not address whether International Paper will recognize gain with respect to the earnout payment);	
 
 	(3)	no gain or loss will be recognized by the International Paper shareholders on the receipt of our common stock in the spin-off under Section 355(a)(1) of the Code;	
 
 	(4)	each International Paper shareholder’s holding period in our common stock received in the spin-off will include the holding period of the International Paper common stock held by such shareholder; and	
 
 	(5)	each International Paper shareholder’s aggregate basis in its shares of International Paper common stock and our common stock (including fractional shares) immediately after the spin-off will equal the aggregate basis of the International Paper common stock held by such shareholder immediately before the spin-off, with such basis allocated between the International Paper common stock and our common stock held by such shareholder in proportion to their respective fair market values.	
The IRS ruling also concludes that certain internal contributions and distributions in connection with the spin-off will be tax-free to International Paper and to us.
If the spin-off does not qualify as a tax-free spin-off under Section 355 of the Code, then each International Paper shareholder who receives our common stock would be treated as receiving a taxable dividend in an amount equal to the fair market value of our stock received, to the extent of such shareholder’s ratable share of International Paper’s earnings and profits.
 
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In addition, if the spin-off does not qualify as a tax-free spin-off under Section 355 of the Code, International Paper would have taxable gain equal to the excess of the value of the assets transferred to SpinCo plus the value of the liabilities assumed by SpinCo over International Paper’s tax basis for those assets. Even if the spin-off otherwise qualifies as a tax-free spin-off under Section 355 of the Code, the spin-off will be taxable to International Paper pursuant to Section 355(e) of the Code if there is a 50% or more change in ownership of either International Paper or SpinCo, directly or indirectly, as part of a plan or series of related transactions that include the spin-off. Because the International Paper shareholders will collectively own more than 50% of our common stock following the Merger, the Merger alone will not cause the spin-off to be taxable to International Paper under Section 355(e) of the Code. However, Section 355(e) of the Code might apply if other acquisitions of stock of International Paper before or after the Merger, or of SpinCo after the Merger, are considered to be part of a plan or series of related transactions that include the spin-off. In connection with the request for the IRS ruling, International Paper has represented, and in connection with the Spin Opinion of Counsel, International Paper, SpinCo and UWWH will represent, that the spin-off is not part of any such plan or series of related transactions. If Section 355(e) of the Code applied, then International Paper might recognize a substantial amount of taxable gain. Even if Section 355(e) of the Code causes the spin-off to be taxable to International Paper, the spin-off will nevertheless remain tax-free to the International Paper shareholders.
Under the Tax Matters Agreement, in certain circumstances and subject to certain limitations, we are required to indemnify International Paper for taxes on the spin-off, including taxes that arise as a result of actions or failures to act by SpinCo or its subsidiaries, as a result of changes in ownership of the stock of SpinCo after the Merger or as a result of acquisition of International Paper’s common stock by the UWWH Stockholder or certain related persons prior to the spin-off. See “The Contribution and Distribution Agreement and the Ancillary Agreements—Tax Matters Agreement.” In some cases however, International Paper might recognize gain on the spin-off without being entitled to an indemnification payment under the Tax Matters Agreement.
U.S. Treasury regulations require each International Paper shareholder that owns at least 5% of the total outstanding stock of International Paper and receives stock in the spin-off to attach to its U.S. federal income tax return for the year in which the spin-off occurs a statement containing certain information relating to the tax-free nature of the spin-off.
Each International Paper shareholder that receives cash in lieu of fractional shares will recognize gain or loss on such fractional shares computed based on the difference between the cash so received and such shareholder’s basis in such fractional shares (computed as described above).
The Merger
Our and International Paper’s obligation to complete the Merger are conditioned on receipt by International Paper and SpinCo of an opinion of Debevoise to the effect that the Merger will qualify as a tax-free reorganization under Section 368(a) of the Code (the “Debevoise Merger Opinion”), though we have received the private letter ruling described below and therefore expect that such condition will be waived. UWWH’s obligation to complete the Merger is conditioned on receipt of a similar opinion (the “Kirkland Merger Opinion”) from UWWH’s counsel, Kirkland.
In addition, International Paper has received a private letter ruling from the IRS to the effect that the Merger will qualify as a tax-free reorganization under Section 368(a) of the Code. Although a private letter ruling from the IRS generally is binding on the IRS, the IRS ruling does not rule that the Merger satisfies every requirement for a tax-free reorganization under Section 368(a) of the Code, and the parties will rely solely on the opinion of counsel, to the extent provided, for comfort that such additional requirements are satisfied.
The IRS ruling, the Debevoise Merger Opinion, to the extent provided, and the Kirkland Merger Opinion will be based on, among other things, certain representations and assumptions as to factual matters made by us, International Paper and UWWH. The failure of any factual representation or assumption to be true, correct and
 
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complete in all material respects could adversely affect the validity of the IRS ruling, the Debevoise Merger Opinion, to the extent provided, and the Kirkland Merger Opinion. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the IRS ruling, the Debevoise Merger Opinion, to the extent provided, and the Kirkland Merger Opinion will be based on current law, and cannot be relied upon if current law changes with retroactive effect.
The IRS ruling, the Debevoise Merger Opinion, to the extent provided, and the Kirkland Merger Opinion are expected to conclude that:
 
 	•	 	the Merger will qualify as a reorganization under Section 368(a)(1)(A) of the Code and SpinCo and UWWH will each be a party to a reorganization within the meaning of Section 368(b) of the Code; and	
 
 	•	 	no gain or loss will be recognized by UWWH on the transfer of its assets to SpinCo and SpinCo’s assumption of UWWH’s liabilities.	
If the Merger does not qualify as a tax-free reorganization under Section 368(a) of the Code, then UWWH would be considered to have made a taxable sale of its assets to us and we would be required to pay the U.S. federal income tax on the gain, if any, arising from such taxable sale as a result of being the surviving corporation in the Merger.
The Subsidiary Merger
UWWH’s obligation to complete the Merger is conditioned on receipt of an opinion from Kirkland to the effect that the Subsidiary Merger will qualify as a transfer of property to Unisource under Section 351(a) of the Code (the “Subsidiary Merger Opinion of Counsel”).
In addition, International Paper has received a private letter ruling from the IRS to the effect that the Subsidiary Merger will qualify as a transfer of property to Unisource under Section 351(a) of the Code. Although a private letter ruling from the IRS generally is binding on the IRS, the IRS ruling does not rule that the Subsidiary Merger satisfies every requirement for a transfer of property to Unisource under Section 351(a) of the Code, and the parties will rely solely on the opinion of counsel for comfort that such additional requirements are satisfied.
The IRS ruling and the Subsidiary Merger Opinion of Counsel will be based on, among other things, certain representations and assumptions as to factual matters made by us, International Paper and UWWH. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the IRS ruling or the Subsidiary Merger Opinion of Counsel. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the IRS ruling and the Subsidiary Merger Opinion of Counsel will be based on current law, and cannot be relied upon if current law changes with retroactive effect.
The IRS ruling and the Subsidiary Merger Opinion of Counsel are expected to conclude that:
 
 	•	 	the Subsidiary Merger will qualify as a transfer of property to Unisource under Section 351(a) of the Code; and	
 
 	•	 	no gain or loss will be recognized by SpinCo on the transfer of xpedx Intermediate’s assets to Unisource and Unisource’s assumption of xpedx Intermediate’s liabilities.	
If the Subsidiary Merger does not qualify as a transfer of property to Unisource under Section 351(a) of the Code, then we will be considered to have made a taxable sale of the assets of xpedx Intermediate to Unisource, and we may either be required to pay the U.S. federal income tax on such sale or to indemnify International Paper for the U.S. federal income tax on such sale pursuant to the Tax Matters Agreement.
 
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Regulatory Approvals
The Merger Agreement provides that each of the parties to the Merger Agreement will use reasonable best efforts to obtain all necessary actions, waivers, consents and approvals from any governmental authority, and to take all steps as may be necessary to obtain an approval or waiver from, or to avoid an action by, any governmental authority. This includes making all necessary filings and defending or contesting all actions or proceedings (subject to certain limitations). As of the date hereof, all material regulatory approvals expected by the parties to be required in connection with the Transactions have been obtained.
Accounting Treatment and Considerations
ASC 805, Business Combinations, requires the use of the acquisition method of accounting for business combinations. In applying the acquisition method, it is necessary to identify both the accounting acquiree and the accounting acquiror. In a business combination effected through an exchange of equity interests, such as the Merger, the entity that issues the interests (SpinCo in this case) is generally the acquiring entity. In identifying the acquiring entity in a combination effected through an exchange of equity interests, however, all pertinent facts and circumstances must be considered, including the following:
 
 	•	 	The relative voting interests of SpinCo after the Transactions . In this case, shareholders of International Paper, the sole shareholder of SpinCo, will receive at least 51% of the equity ownership and associated voting rights in SpinCo after the Transactions.	
 
 	•	 	The composition of the governing body of SpinCo after the Transactions . In this case, the board of directors of SpinCo immediately following the Merger will consist of the members of the board of directors of SpinCo immediately prior to the consummation of the Merger. The Chairman of the board of directors will be Mary A. Laschinger, who currently serves as a Senior Vice President of International Paper and President of xpedx and will be the Chief Executive Officer of SpinCo.	
 
 	•	 	The composition of the senior management of SpinCo after the Transactions . The Chief Executive Officer, the General Counsel and the Chief Human Resources Officer are existing members of SpinCo management. The remaining executive officers including the Chief Financial Officer and Senior Vice President Corporate Affairs have been hired from outside the combined company with the direct input of the Chief Executive Officer. In addition it is expected that there will be approximately four to six operational leaders as well as functional leaders which would also report to the Chief Executive Officer.	
SpinCo’s management has determined that SpinCo will be the accounting acquiror in the Merger based on the facts and circumstances outlined above and the detailed analysis of the relevant GAAP guidance. Consequently, SpinCo will apply acquisition accounting to the assets acquired and liabilities assumed of Unisource upon consummation of the Merger.
Listing and Trading of Our Common Stock
There is currently no market for our common stock. However, a “when-issued” market in our common stock may develop prior to the Distribution. See “—Trading Prior to the Distribution Date” below for an explanation of a “when-issued” market. We have applied to list our common stock on the NYSE under the symbol “VTRV”. We expect that our common stock will begin trading on a “when-issued” basis on the NYSE under the symbol “VRTV WI” shortly before the record date. Following the Transactions, International Paper’s common stock will continue to trade on the NYSE under the symbol “IP”.
Neither we nor International Paper can assure you as to the trading price of International Paper common stock or SpinCo common stock after the Transactions, or as to whether the combined trading prices of SpinCo’s common stock and International Paper common stock after the Transactions will be less than, equal to or greater than the trading prices of International Paper common stock prior to the Transactions. The trading price of SpinCo’s common stock may fluctuate significantly following the Transactions. See “Risk Factors—Risks
 
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Related to SpinCo’s Common Stock— There is currently no public market for our common stock and we cannot be certain that an active trading market will develop or be sustained after the Transactions, and following the Transactions our stock price may fluctuate significantly.”
Trading Prior to the Distribution Date
It is anticipated that shortly before the record date and through the distribution date, there will be a “when-issued” market in our common stock under the symbol “VRTV WI”. When-issued trading refers to a sale or purchase of securities made conditionally because the security has been authorized but not yet issued. The when-issued trading market will be a market for SpinCo common stock that will be distributed to holders of International Paper common stock on the distribution date. If you own shares of International Paper common stock as of 5:00 p.m., New York City time on the record date, you will be entitled to SpinCo common stock distributed pursuant to the spin-off. You may trade this entitlement to SpinCo common stock, without the shares of International Paper common stock you own, on the when-issued market. On the first trading day following the distribution date, we expect when-issued trading with respect to SpinCo common stock will end and regular-way trading will begin. When-issued trading is expected to begin two days before the record date and when-issued trades are expected to settle within four days of the distribution date.
It is also anticipated that shortly before the record date and through the distribution date, there will be two markets in International Paper common stock: a “regular-way” market and an “ex-distribution” market (which will trade under the symbol “IP WI”). International Paper common stock that trades on the regular way market will trade with an entitlement to SpinCo common stock distributed pursuant to the Distribution. Shares that trade on the ex-distribution market will trade without an entitlement to SpinCo common stock distributed pursuant to the Distribution. Therefore, if you sell shares of International Paper common stock in the regular-way market up to and including the distribution date, you will be selling your right to receive SpinCo common stock in the Distribution. However, if you own shares of International Paper common stock as of 5:00 p.m., New York City time, on the record date and sell those shares on the ex-distribution market up to and including the distribution date, you will still receive the SpinCo common stock that you would otherwise be entitled to receive pursuant to your ownership of shares of International Paper common stock because you owned these shares of common stock as of 5:00 p.m., New York City time, on the record date. Ex-distribution trading is expected to begin two days before the record date and ex-distribution trades are expected to settle within four days of the distribution date.
 
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 THE MERGER AGREEMENT
The following is a summary of material provisions of the Merger Agreement, which we entered into on January 28, 2014, as amended on May 28, 2014. This summary is qualified in its entirety by reference to the full text of the Merger Agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part.
The Merger
Under the Merger Agreement and in accordance with the DGCL, at the effective time of the Merger, UWWH will merge with and into SpinCo. As a result of the Merger, the separate corporate existence of UWWH will cease and SpinCo will continue as the surviving corporation and will succeed to and assume all the rights, powers and privileges and franchises, and be subject to all of the obligations of UWWH in accordance with the DGCL and upon the terms set forth in the Merger Agreement. The certificate of incorporation and bylaws of SpinCo, as in effect immediately prior to the effective time of the Merger, will be the certificate of incorporation and bylaws of the combined company from and after the effective time of the Merger until amended in accordance with applicable law and such certificate of incorporation.
Under the terms of the Merger Agreement, the board of directors of SpinCo immediately prior to the effective time of the Merger will be, from and after the effective time of the Merger, the initial members of the board of directors of the combined company and will serve until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the combined company’s certificate of incorporation and bylaws.
The Subsidiary Merger
Under the Merger Agreement and in accordance with the DGCL, immediately following the effective time of the Merger, xpedx Intermediate will be merged with and into UWW. Following the Subsidiary Merger, the separate corporate existence of xpedx Intermediate will cease, and UWW will continue as the surviving corporation and will succeed to and assume all the rights, powers, privileges and franchises, and be subject to all of the obligations of xpedx Intermediate in accordance with the DGCL and upon the terms set forth in the Merger Agreement. The certificate of incorporation and bylaws of Unisource as in effect immediately prior to the consummation of the Subsidiary Merger will be the certificate of incorporation and bylaws of Unisource following the Subsidiary Merger until amended in accordance with the terms thereof and applicable law.
All membership interests in xpedx Intermediate outstanding immediately prior to the consummation of the Subsidiary Merger will be automatically converted into the right to receive one fully paid and non-assessable share of UWW common stock.
Closing and Effective Time
Under the terms of the Merger Agreement, the closing of the Merger will take place at 10:00 a.m., New York time, on a date to be specified by the parties to the Merger Agreement, which will be no later than the eighth business day after the satisfaction or, to the extent permitted by applicable law, waiver of the conditions precedent to the Merger, unless another date is agreed to in writing by such parties.
On the Closing Date, SpinCo and UWWH will execute and file with the office of the Secretary of State of the State of Delaware a certificate of merger executed in accordance with the DGCL. The Merger will become effective at the time of filing of the certificate of merger, or at such later time as is agreed upon by the parties and set forth in the certificate of merger. We cannot assure you on what date we will consummate the Merger.
Merger Consideration
The Merger Agreement provides that, as of the effective time of the Merger, and without any action on part of any holder of capital stock of International Paper, SpinCo or UWWH, each share of UWWH common stock
 
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issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive a number of shares of SpinCo common stock issued and outstanding equal to (i) (a) the aggregate number of shares of SpinCo common stock issued and outstanding after the Distribution, but prior to the Merger, divided by (b) 0.51, multiplied by (c) 0.49, divided by (d) the aggregate number of shares of UWWH common stock issued and outstanding on a fully diluted basis as of immediately prior to the effective time of the Merger, (ii) any rights provided to UWWH or the UWWH Stockholder under the Tax Receivable Agreement and (iii) the right to receive any amounts payable pursuant to certain adjustments described below.
No fractional shares of SpinCo common stock will be issued to the UWWH Stockholder in the Merger. Following the effective time of the Merger, all shares of UWWH common stock will be automatically cancelled and cease to exist.
Working Capital, Net Indebtedness and Transaction Expenses Adjustments
The Merger Agreement provides that not less than three (but not more than five) business days prior to the anticipated date of the Distribution, UWWH will deliver to International Paper and SpinCo an unaudited balance sheet of UWWH and its subsidiaries and a statement setting forth its good faith estimate of Unisource’s transaction expenses, working capital and net indebtedness (as defined in the Merger Agreement as the “UWWH Estimated Transaction Expenses Amount,” “UWWH Estimated Working Capital Adjustment” and “UWWH Estimated Net Debt Adjustment,” respectively) as of the closing date. If the transaction expenses of Unisource exceed $15 million, the special payment to International Paper pursuant to the Contribution and Distribution Agreement will be increased by a corresponding amount. If the estimated working capital of Unisource as of the date of the Distribution exceeds $499.1 million, SpinCo will make a payment to the UWWH Stockholder in an amount equal to the excess. If the estimated net indebtedness of Unisource as of the date of the Distribution is less than $318.2 million, SpinCo will make a payment to the UWWH Stockholder in an amount equal to the absolute value of the deficit. If the estimated working capital of Unisource as of the date of the Distribution is less than $499.1 million, the special payment to International Paper will be increased by an amount equal to the absolute value of the difference. If the estimated net indebtedness of Unisource as of the date of the Distribution is more than $318.2 million, the special payment to International Paper will be increased by an amount equal to the excess.
The Merger Agreement provides that within 90 days after the Distribution, the combined company will cause to be prepared and delivered to International Paper and the UWWH Stockholder an unaudited balance sheet of Unisource and a calculation of the amounts referred to above. The parties will resolve any disputes they may have over the statement and agree upon a final, conclusive calculation of such amounts, and if they are unable to resolve such disputes, they will retain an accounting firm to make a final determination of the amounts. After the amounts are finally determined, an appropriate payment will be made to account for any difference between the finally determined amounts and the estimated amounts used at closing.
Conditions to Consummation of the Merger
The obligations of each party to consummate the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of closing conditions that are contained in the Merger Agreement, including:
 
 	•	 	the Contribution and Distribution having occurred pursuant to the terms of the Contribution and Distribution Agreement;	
 
 	•	 	SpinCo’s receipt of the proceeds from the special payment financing in an amount sufficient to pay the special payment, and International Paper’s receipt of the special payment from SpinCo;	
 
 	•	 	International Paper’s receipt of one or more private letter rulings from the IRS, which rulings shall be in full force and effect on the Closing Date, to the effect that (i) the transactions that comprise the Distribution will qualify as a “reorganization” within the meaning of Section 368(a)(1)(D) of the Code,	
 
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 	(ii) International Paper will recognize no gain or loss under Section 361(c) of the Code upon the Distribution and (iii) International Paper’s shareholders will recognize no gain or loss under Section 355(a) of the Code upon the receipt of SpinCo shares in the Distribution;	
 
 	•	 	the receipt of the approval of shareholders of UWWH, UWW and SpinCo and the approval of the sole member of xpedx Intermediate;	
 
 	•	 	the receipt of all consents, approvals and authorizations by governmental authorities;	
 
 	•	 	the receipt by International Paper’s board of directors of a customary solvency and surplus opinion of a nationally recognized investment banking or appraisal firm;	
 
 	•	 	the expiration or termination of any required waiting period, or the non-issuance of a stop order, as applicable, under the HSR Act, Competition Act (Canada), Federal Law on Economic Competition of Mexico and Austrian Cartel Act of 2005;	
 
 	•	 	the effectiveness of the registration statement on Form S-1, of which this prospectus forms a part, and the approval of the listing of the shares of SpinCo common stock on the NYSE, subject to official notice of the issuance; and	
 
 	•	 	the absence of any order issued by any governmental authority of competent jurisdiction or other legal impediment preventing or making illegal the consummation of the Transactions.	
In addition, International Paper, SpinCo, xpedx Intermediate and xpedx LLC’s obligations to consummate the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of the following conditions:
 
 	•	 	the representations and warranties of the UWWH Stockholder, UWWH and UWW, disregarding all materiality or material adverse effect qualifications, being true and correct in all respects in each case as of the effective time of the Merger as if made as of the effective time of the Merger (except to the extent such representations and warranties address matters as of a particular date, in which case as of such date), except where the failure to be true and correct has not had or would not, individually or in the aggregate, reasonably be expected to have a UWWH MAE (other than certain representations and warranties which must be true and correct in all respects);	
 
 	•	 	the covenants and agreements being performed by the UWWH Stockholder, UWWH and UWW in all material respects at or prior to the effective time of the Merger (other than certain covenants and agreements which must be performed in all respects);	
 
 	•	 	the delivery by UWWH of an officer’s certificate certifying the satisfaction of the above conditions;	
 
 	•	 	the absence of a UWWH MAE since June 30, 2013;	
 
 	•	 	the receipt by International Paper and SpinCo of a tax opinion regarding the tax-free treatment of the spin-off;	
 
 	•	 	the receipt of the Debevoise Merger Opinion;	
 
 	•	 	the entrance into and delivery of the applicable Transaction Agreements by the UWWH Stockholder and UWWH, which are in full force and effect;	
 
 	•	 	the delivery by the UWWH Stockholder to SpinCo of a certification that it is not a foreign person; and	
 
 	•	 	the termination of the advisory agreement among UWWH, UWW and Bain Capital, without liability to SpinCo or its subsidiaries.	
Furthermore, UWWH and UWW’s obligations to consummate the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable law) of the following conditions:
 
 	•	 	the representations and warranties of International Paper, SpinCo, xpedx Intermediate and xpedx LLC, disregarding all materiality or material adverse effect qualifications, being true and correct in all respects in each case as of the effective time of the Merger as if made as of the effective time (except to	
 
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 	the extent such representations and warranties address matters as of a particular date, in which case as of such date), except where the failure to be true and correct has not had or would not, individually or in the aggregate, reasonably be expected to have a SpinCo MAE (other than certain representations and warranties which must be true and correct in all respects);	
 
 	•	 	the covenants and agreements being performed by International Paper, SpinCo, xpedx Intermediate and xpedx LLC in all material respects at or prior to the effective time of the Merger (other than certain covenants and agreements which must be performed in all respects);	
 
 	•	 	the delivery by each of International Paper and SpinCo of an officer’s certificate certifying the satisfaction of the above conditions;	
 
 	•	 	the absence of any SpinCo MAE since June 30, 2013;	
 
 	•	 	the receipt of the Kirkland Merger Opinion and the Subsidiary Merger Opinion; and	
 
 	•	 	the entrance into and delivery of the applicable Transaction Agreements by International Paper, SpinCo, xpedx Intermediate and xpedx LLC, which are in full force and effect.	
Furthermore, the effective date of the registration statement of which this prospectus forms a part will be no earlier than the date on which SpinCo as the surviving corporation would be reasonably able to meet its obligations and requirements as a public company with securities listed on the NYSE and is otherwise reasonably prepared to operate as a standalone entity taking into account all resources available to it under the Transaction Agreements and on commercially reasonable terms from third parties.
To the extent permitted by applicable law, each party to the Merger Agreement may waive, at its sole discretion, any of the conditions to its respective obligations to complete the Merger.
Regulatory Approvals
Under the HSR Act, and the rules promulgated under the HSR Act by the U.S. Federal Trade Commission (the “FTC”), the parties must file notification and report forms with the FTC and the Antitrust Division of the Department of Justice (the “Antitrust Division”) and observe specified waiting period requirements before consummating the Merger. Bain Capital Fund VII, L.P. and SpinCo each filed the requisite notification and report forms with the FTC and the Antitrust Division on May 31, 2013. The FTC granted early termination of the waiting period under the HSR Act on June 14, 2013. Because such termination of the waiting period under this notification remains effective for 12 months, and the possibility that the Closing Date could occur after June 14, 2014, Bain Capital Fund VII, L.P. and SpinCo each filed a second notification and report forms with the FTC and the Antitrust Division on December 23, 2013. The FTC granted early termination of the second waiting period under the HSR Act on January 7, 2014.
Under the Competition Act in Canada, the parties must file a pre-merger notification and observe the specified waiting period requirements before consummating the Merger, unless the parties are exempted from such requirements through the issuance of an Advance Ruling Certificate, or a “no-action” letter together with a waiver of the notification and waiting period requirements. UWWH and International Paper filed the requisite notification and report forms with the Competition Bureau of Canada on June 17, 2013. On June 27, 2013, the Competition Bureau of Canada issued a “no-action” letter together with a waiver of the notification and waiting period requirements in Canada in respect of the Merger.
Under the Austrian Cartel Act 2005, Bain Capital Investors, LLC must file a pre-merger notification and observe the specified waiting period requirements before consummating the Merger, unless the Federal Competition Authority and the Federal Cartel Attorney of Austria (together the “Official Parties”) inform the parties in writing that neither of the Official Parties has requested an in-depth investigation before the Cartel Court of Austria (Phase II) prior to the expiry of the waiting period requirements or the Official Parties waive, upon the request of the parties, the specified waiting period requirements. Bain Capital Investors LLC filed the
 
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requisite notification and report forms with the Federal Competition Authority on August 23, 2013. On September 23, 2013, the Federal Competition Authority issued a letter confirming that neither of the Official Parties had requested an in-depth investigation before the Cartel Court of Austria in respect of the Merger and that the prohibition to implement the Merger ended on September 21, 2013.
Under the Federal Economic Competition Law of Mexico, the parties are required to file a concentration notice requesting the authorization of the transaction from the regulator, the Federal Economic Competition Commission (“FECC”). SpinCo and UWWH filed the concentration notice with the FECC on September 4, 2013. On September 9, 2013, the FECC issued a “stop order,” which provided that the Transactions could not close until final approval by the FECC was issued. We received the FECC approval on January 31, 2014. Based on subsequent discussions with the FECC, the parties deemed it advisable to file a second concentration notice to enable the FECC to review the covenant not to compete included in the Merger Agreement. The covenant not to compete was not agreed by the parties until signing of the Merger Agreement on January 28, 2014, and this was not reviewed by the FECC under the notice filed September 4, 2013, which was based on a letter of intent. Based on discussions with the FECC staff regarding the second notice, the parties amended the Merger Agreement on May 28, 2014 to reduce the length of the covenant not to compete from four years to three years. The FECC reviewed the parties’ second notice at its June 5, 2014 meeting, and we are awaiting formal notification of the FECC’s resolution of the second notice.
Representations and Warranties
The Merger Agreement contains substantially reciprocal customary representations and warranties that International Paper, SpinCo, xpedx Intermediate, xpedx LLC, UWWH and UWW made to each other as of specific dates. The UWWH Stockholder also made similar representations and warranties with respect to, among other things, its capital structure and status as an investor.
The representations and warranties by each of International Paper, SpinCo, xpedx Intermediate, xpedx LLC, UWWH and UWW in the Merger Agreement relate to, among other things:
 
 	•	 	due organization, good standing, corporate power and subsidiaries;	
 
 	•	 	authority to enter into the Merger Agreement (and other transaction-related agreements) and no conflicts with or violations of governance documents, other obligations or laws;	
 
 	•	 	capitalization;	
 
 	•	 	affiliate transactions;	
 
 	•	 	financial statements and absence of undisclosed liabilities;	
 
 	•	 	compliance with SEC requirements of the information supplied for this prospectus;	
 
 	•	 	ownership of assets;	
 
 	•	 	absence of certain changes or events;	
 
 	•	 	litigation and similar actions;	
 
 	•	 	compliance with applicable laws and ownership of certain licenses;	
 
 	•	 	environmental matters;	
 
 	•	 	tax matters;	
 
 	•	 	employee benefit matters;	
 
 	•	 	labor and employment matters;	
 
 	•	 	intellectual property matters;	
 
 	•	 	existence and enforceability of material contracts;	
 
 	•	 	approval by the board of directors and votes required;	
 
 	•	 	insurance;	
 
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 	•	 	payment of fees to brokers or finders in connection with the Merger Agreement and other Transaction Agreements;	
 
 	•	 	transaction bonuses; and	
 
 	•	 	true and complete disclosure of bank accounts.	
In addition, International Paper, SpinCo, xpedx Intermediate and xpedx LLC made representations and warranties that relate to:
 
 	•	 	the sufficiency of assets necessary to run the xpedx business;	
 
 	•	 	status of the new SpinCo common stock; and	
 
 	•	 	operations of SpinCo.	
Furthermore, UWWH and UWW made representations and warranties that relate to the absence of dividends since June 30, 2013.
In addition to making representations and warranties related to due organization, good standing, corporate power, authority to enter into the Merger Agreement (and additional agreements) and no conflicts with or violation of governance documents, and other obligations or laws, the UWWH Stockholder also made representations to International Paper and SpinCo relating to the prohibition of public sale or distribution of SpinCo common stock, its accredited investor status, its reliance on exemptions from the U.S. securities laws, the supply of requested information, the absence of a governmental review of the investment in and offering of SpinCo common stock and the transfer or resale of SpinCo common stock.
Many of the representations and warranties contained in the Merger Agreement are subject to a “material adverse effect” standard, and, except for the representations and warranties related to information supplied in this prospectus (which survive for two years after the effective time of the Merger), do not survive the closing.
Under the Merger Agreement, SpinCo MAE means any effect, change or circumstance, individually or in the aggregate, that is, or would reasonably be expected to be, materially adverse to (i) the xpedx business, SpinCo or any of its subsidiaries, International Paper or any of its subsidiaries with respect to the xpedx business, or the financial condition or results of operations of the xpedx business, taken as a whole, or (ii) the ability of International Paper, SpinCo or any of their respective subsidiaries to consummate the Merger and to perform their obligations under the Merger Agreement and the Transaction Agreements. However, any adverse effect, change or circumstance, individually or in the aggregate, arising from or relating to the following will not be deemed either to constitute, or be taken into account in determining whether there has occurred a SpinCo MAE (but only if the xpedx business, SpinCo or its subsidiaries or International Paper or its subsidiaries with respect to the xpedx business are not disproportionately affected thereby compared to other operators of xpedx’s business):
 
 	•	 	general business or economic conditions, including any such conditions as they relate to the xpedx business and matters generally affecting the industries in which the xpedx business operates;	
 
 	•	 	national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States	
 
 	•	 	financial, banking or securities markets;	
 
 	•	 	changes in GAAP;	
 
 	•	 	changes in any laws; and	
 
 	•	 	except for the purposes of clause (ii) above, the negotiation or execution of the Merger Agreement or any Transaction Agreement, any actions that are required to be taken by the Merger Agreement or the Transaction Agreements or the pendency or announcement of the Transactions.	
 
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In addition, the term UWWH MAE, means any effect, change or circumstance, individually or in the aggregate, that is, or would reasonably be expected to be, materially adverse to (i) UWWH, its subsidiaries or the financial condition or results of operations of Unisource, taken as a whole, or (ii) the ability of UWWH to consummate the Merger and to perform its obligations under the Merger Agreement and the Transaction Agreements. However, any adverse effect, change or circumstance, individually or in the aggregate, arising from or relating to the following will not be deemed either to constitute, or be taken into account in determining whether there has occurred a UWWH MAE (but only if UWWH and its subsidiaries are not disproportionately affected thereby compared to other operators of Unisource’s business):
 
 	•	 	general business or economic conditions, including any such conditions as they relate to Unisource, and matters generally affecting the industries in which Unisource operates;	
 
 	•	 	national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States;	
 
 	•	 	financial, banking or securities markets;	
 
 	•	 	changes in GAAP;	
 
 	•	 	changes in any laws; and	
 
 	•	 	except for the purposes of clause (ii) above, the negotiation or execution of the Merger Agreement or any Transaction Agreement, any actions that are required to be taken by the Merger Agreement or the Transaction Agreements or the pendency or announcement of the Transactions.	
Covenants
In the Merger Agreement, each of International Paper and SpinCo and each of their respective subsidiaries have made certain covenants relating to its conduct in respect of the SpinCo business, and UWWH and its subsidiaries has made certain covenants relating to its conduct of its business, with certain exceptions specified in the Merger Agreement. Some of these covenants are not easily summarized. You are urged to read carefully the sections of the Merger Agreement entitled “Conduct of the Business Pending the Merger.” The following summarizes the more significant of these covenants:
Conduct of Business
Each of International Paper and SpinCo, with respect to the xpedx business, and UWWH are required to carry on its respective business in the ordinary course consistent with past practice and to use reasonable best efforts to preserve intact its respective current business organization, maintain material rights and licenses, keep available the services of current officers and key employees and preserve relationships with customers, suppliers and others having business dealings with it in such a manner that its goodwill and ongoing businesses are not impaired in any material respect as of the effective time of the Merger.
Required Consent
Without the prior written consent of the other parties to the Merger Agreement, subject to certain exceptions and items disclosed in the schedules to the Merger Agreement, none of International Paper (with respect to the xpedx business only), SpinCo, UWWH or any of their respective subsidiaries may take any or all of the following actions or authorize, commit or agree to take any of the following actions:
 
 	•	 	split, combine or reclassify any of its capital stock or issue or propose to issue any other securities;	
 
 	•	 	amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire any securities of any of their respective subsidiaries or propose to do any of the foregoing;	
 
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 	•	 	issue, sell, pledge, dispose of or encumber any shares of capital stock of any class or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest; or accelerate the timing of payments or vesting under, or otherwise materially amend or supplement, any existing benefit, stock option compensation plan or arrangement, except as otherwise provided for in the Merger Agreement;	
 
 	•	 	amend or propose to amend or otherwise change the certificate of incorporation or bylaws or similar governance documents;	
 
 	•	 	enter into a transaction, acquire by merging or consolidating with, or by purchasing any equity interest in or the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;	
 
 	•	 	enter into a transaction, sell, lease, pledge, encumber, transfer, license or otherwise dispose of any of its assets, excluding the disposition for fair market value in the ordinary course of business of assets having a fair market value not exceeding $500,000 in the aggregate;	
 
 	•	 	obligate the combined company or its subsidiaries to pay any amounts or assume any obligations at or after the effective time of the Merger;	
 
 	•	 	incur any indebtedness for borrowed money or guarantee or otherwise become contingently liable for any such indebtedness or issue or sell any debt securities or warrants or rights to acquire any of its debt securities or guarantee any debt securities of others or enter into any material lease other than in connection with operating leases in the ordinary course of business;	
 
 	•	 	issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person for borrowed money or otherwise;	
 
 	•	 	make any loans, advances, capital contributions to or investments in any other person other than as specified in the Merger Agreement;	
 
 	•	 	authorize material capital expenditures or purchases of fixed assets other than from third parties in the ordinary course of business;	
 
 	•	 	incur liabilities secured by an encumbrance on its assets other than in the ordinary course of business;	
 
 	•	 	adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization or any other transaction that would preclude or be inconsistent in any material respect with, or hinder or delay in any material respect, the transactions contemplated by the Merger Agreement or the Transaction Agreements;	
 
 	•	 	make any material change in the methods of accounting or procedures in effect as of January 1, 2013 (except as required by changes in GAAP or in response to SEC guidance or as may be required in connection with the Merger);	
 
 	•	 	make, change or rescind any material tax election, settle, compromise or abandon any material action or controversy relating to taxes, amend any material returns, adopt or change any material method of tax accounting or change any annual tax accounting period or consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment, in filing returns;	
 
 	•	 	enter into or amend any contract or arrangement with affiliates, except in connection with the Merger or for arm’s length commercial arrangements entered into in the ordinary course of business with certain limitations;	
 
 	•	 	modify, amend, terminate or enter into any material contracts with a third party, or waive, realize or assign any material rights or claims, except in the ordinary course of business and, in the case of SpinCo, except in connection with an approved offer of employment to certain senior employees of SpinCo;	
 
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 	•	 	pay discharge, satisfy or settle any action, other than any action in respect of taxes, if such payment would (i) require any material payment prior to the effective time of the Merger or (ii) restrict operations in any material respect or require the taking of action that would, or would reasonably be expected to, materially and adversely, affect the operation of business;	
 
 	•	 	enter into any contract or arrangement that limits or restricts the entity from engaging in its business;	
 
 	•	 	sell, transfer, license, abandon, let lapse, encumber or otherwise dispose of any intellectual property that is necessary to carry on the business substantially as currently conducted; or	
 
 	•	 	agree or commit to do any of the actions inconsistent with the foregoing restrictions and limitations.	
In addition, without the prior written consent of the other parties to the Merger Agreement, and with certain exceptions described in or contemplated by the Merger Agreement (which exceptions apply to certain but not all of the following items), neither UWWH nor any of its subsidiaries may declare, set aside or pay dividends on or make other distributions in respect of any shares of the capital stock or partnership or equity interests of itself or any of its subsidiaries, or authorize, commit or agree to take the foregoing actions.
Competition Approvals; IRS Rulings
Each party to the Merger Agreement agreed to use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary under applicable laws and regulations to consummate and make effective the Transactions and the Transaction Agreements, including providing information and using their reasonable best efforts to obtain all necessary exemptions, rulings, consents, authorizations, approvals and waivers to effect all necessary registrations and filings and to lift any injunction or other legal bar to the Transactions, as promptly as practicable, and to take all other actions necessary to consummate the Transactions in a manner consistent with applicable law. Any filing fees required to be paid by the parties under any filing with any governmental authority will be borne one-half by International Paper and one-half by UWWH.
International Paper and SpinCo also agreed to use their reasonable best efforts to seek, as promptly as practicable, one or more private letter rulings from the IRS, in form and substance reasonably satisfactory to International Paper, and an opinion of their tax counsel regarding certain United States federal income tax matters relating to the Transactions. UWWH and the UWWH Stockholder each agreed to cooperate and use reasonable best efforts to assist in obtaining such rulings and opinion. In addition, International Paper agreed to obtain an opinion of its tax counsel regarding certain United States federal income tax matters related to the Merger and UWWH agreed to obtain opinions of its tax counsel regarding certain United States federal income tax matters related to the Merger and the Subsidiary Merger, unless, in each case, such party waives such requirement to obtain the opinion.
Employee Matters
Subject to certain exceptions and other than as required by law or certain collective bargaining agreements, none of International Paper (with respect to the xpedx business), SpinCo, UWWH or their respective subsidiaries will:
 
 	•	 	grant any material increase in compensation or fringe benefits to its employees;	
 
 	•	 	pay or agree to pay any pension, retirement allowance, severance benefit or other material employee benefit not required by any of the existing benefit plans as in effect on the date the Merger Agreement was signed or in connection with an approved offer of employment to certain senior employees of SpinCo;	
 
 	•	 	except in the ordinary course of business or with respect to an approved offer of employment to certain senior employees of SpinCo, enter into any new, or materially terminate or amend any existing collective bargaining agreement or relationship, employment, severance or termination contract or other arrangement with any employee; provided, that any such new or material amendment to a collective bargaining agreement will be subject to review by xpedx management and UWWH and subject to approval by xpedx management;	
 
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 	•	 	become obligated under any new, or amend any existing, pension plan, welfare plan, employee benefit plan, severance plan, benefit arrangement or similar plan or arrangement, except as would not result in a material increase in the annual aggregate cost of maintaining such plan;	
 
 	•	 	except to the extent that it has obtained written consent from the other parties to the Merger Agreement, grant any equity-based compensation to any employee or director or independent contractor in respect of its stock;	
 
 	•	 	make any offer for the employment or engagement of any employee providing for annual compensation in excess of $250,000, other than an approved offer of employment to certain senior employees of SpinCo;	
 
 	•	 	implement any distribution center, facility, warehouse or business unit closing or mass layoff that could implicate the Worker Adjustment and Retraining Notification Act of 1988; or	
 
 	•	 	make any loan to any director, officer or member of senior management, or except in the ordinary course of business and in compliance with applicable law, to any other employee.	
Directors of SpinCo
The board of directors of SpinCo immediately prior to the effective time of the Merger will be the initial members of the board of directors of the combined company at and immediately following the effective time of the Merger.
Directors and Officers Indemnification; Insurance
The Merger Agreement provides that for a period of at least six years after the effective time of the Merger, the combined company will indemnify and hold harmless, and provide advancement of expenses, subject to certain conditions, to all past and present directors or officers of International Paper, SpinCo, UWWH and their respective subsidiaries and each individual who prior to the effective time of the Merger becomes a director or officer of International Paper, SpinCo or UWWH or their respective subsidiaries, to the maximum extent allowed under applicable law in respect of acts or omissions occurring at or prior to the effective time of the Merger Agreement or other Transaction Agreements. The Merger Agreement also provides that the combined company will maintain in effect for the benefit of such individuals directors’ and officers’ liability and fiduciary liability insurance for a period of at least six years following the Merger.
No Solicitation of Acquisition Proposals
Each of UWWH, International Paper and SpinCo agreed that, except in certain circumstances, it and its subsidiaries will not authorize or permit any of the following actions:
 
 	•	 	directly or indirectly, solicit, initiate or encourage any inquiry or proposal that constitutes or could reasonably be expected to lead to an acquisition proposal;	
 
 	•	 	provide any non-public information or data to any person relating to or in connection with an acquisition proposal;	
 
 	•	 	waive, amend or modify any standstill or confidentiality agreement to which it or any of its subsidiaries is a party in connection with an acquisition proposal;	
 
 	•	 	enter into, maintain or continue any discussions or negotiations concerning an acquisition proposal; or	
 
 	•	 	otherwise cooperate with, participate in or facilitate any effort to attempt to make or implement, or approve, agree to, recommend or accept, or execute or enter into, any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar agreement related to any acquisition proposal.	
 
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Other than in connection with the Merger or as specifically contemplated in the Merger Agreement or the Transaction Agreements, an “acquisition proposal” includes, with respect to SpinCo, any proposal relating to:
 
 	•	 	any merger, consolidation, share exchange, business combination, recapitalization or other similar transaction or series of related transactions with respect to the xpedx business;	
 
 	•	 	any sale, lease, exchange transfer or other disposition in a single transaction or a series of related transactions, of the assets of the xpedx business or SpinCo entities constituting 15% or more of the consolidated assets of the xpedx business or accounting for 15% or more of the consolidated revenues of the xpedx business; or	
 
 	•	 	any other similar transaction that would reasonably be expected to prevent or materially impair or delay the consummation of the Transactions or the Transaction Agreements.	
Other than in connection with the Merger or as specifically contemplated in the Merger Agreement or the Transaction Agreements, an “acquisition proposal” includes, with respect to UWWH, any proposal relating to:
 
 	•	 	any merger, consolidation, share exchange, business combination, recapitalization or other similar transaction or series of related transactions with respect to UWWH or its subsidiaries representing a material portion of UWWH’s business;	
 
 	•	 	any sale, lease, exchange, transfer or other disposition, in a single transaction or a series of related transactions, of the assets of UWWH or any of its subsidiaries constituting 15% or more of the consolidated assets of UWWH or accounting for 15% or more of the consolidated revenues of UWWH; or	
 
 	•	 	any other similar transaction that would reasonably be expected to prevent or materially impair or delay the consummation of the Transactions or the Transaction Agreements.	
Tax Matters
Each party to the Merger Agreement has agreed that it will not take any action, or refrain from taking any action, which (i) is inconsistent with the facts presented and the representations made in the IRS submissions with respect to such party or its affiliates or (ii) could reasonably be expected to cause any tax-free transaction failure (as described in the Tax Matters Agreement). See “The Contribution and Distribution Agreement and Ancillary Agreements—Tax Matters Agreement.”
Financing
International Paper, SpinCo and UWWH agreed to use their reasonable best efforts to consummate the debt financing to be incurred by xpedx LLC or its subsidiaries to fund the special payment to International Paper and the refinancing of the Unisource credit facility on terms and conditions no less favorable in the aggregate than the terms set forth in the debt commitment letter, dated as of January 28, 2014, as amended by the amendment to commitment letter, dated as of February 14, 2014, and the second amendment to commitment letter, dated as of February 28, 2014, among SpinCo, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, N.A., SunTrust Bank, SunTrust Robinson Humphrey, Inc., HSBC Bank USA, National Association, HSBC Bank Canada, Regions Bank, RBS Citizens Business Capital (a division of RBS Asset Finance, Inc.) and RBS Citizens, N.A. If such financing becomes unavailable on such terms and conditions, International Paper, SpinCo and UWWH will use their reasonable best efforts to promptly obtain alternative financing from the same or alternative sources in an amount sufficient to consummate the transactions contemplated by the Merger Agreement and the other Transaction Agreements. Without the prior written consent of International Paper and UWWH, SpinCo cannot, among other things, (x) terminate the debt commitment letter, (y) consent to any amendment or modification that would add or change the conditions precedent, delay or prevent the funding under the debt financing, be more restrictive with respect to payments under the Tax Receivable Agreement, adversely affect in any material respect those terms set forth in the debt commitment letter or result in terms less favorable in the aggregate to International Paper, SpinCo or UWWH or (z) enter into any definitive documentation with terms inconsistent with the debt commitment letter. Each of International Paper, SpinCo and UWWH will use their reasonable best efforts to cooperate with each other and to assist in marketing the surviving corporation and the common stock of SpinCo.
 
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Non-Solicitation of Employees and Customers
Subject to certain exceptions set forth in the Merger Agreement, International Paper agreed that for a period of 18 months from and after the effective time of the Merger, it and its subsidiaries would not, without the prior written consent of the combined company, approach, solicit, induce or attempt to induce certain restricted employees from leaving the employ of the combined company or hire, employ or enter into a consulting agreement with certain restricted employees unless such employee ceased to be an employee or was terminated six months prior to his or her employment.
Subject to certain exceptions set forth in the Merger Agreement, International Paper also agreed that for a period of two years from and after the effective time of the Merger it and its subsidiaries would not, without the prior written consent of the combined company, solicit certain restricted customers of the combined company with respect to offset paper products, cut-size paper products, forms and converting paper products or coated paperboard products that are manufactured by International Paper or any of its subsidiaries and sold by the xpedx business to such restricted customers as of the date of the Merger Agreement. Nothing in the Merger Agreement, however, prevents International Paper or its subsidiaries from responding to unsolicited requests initiated by restricted customers for such covered products or from selling the category of covered product that International Paper or its subsidiaries (other than the xpedx business) sold to such restricted customer as of the date of the Merger Agreement. If a restricted customer makes an unsolicited request of International Paper or its subsidiaries and such request is in connection with such restricted customer seeking multiple supplier bids, International Paper will inform the combined company of such unsolicited request and its or its subsidiary’s intention to respond to such unsolicited request. The non-solicit of a restricted customer with respect to a covered product falls away in the event that (i) the combined company has not during the immediately preceding 30 days (or more) sold such category of covered product to such restricted customer and International Paper and the combined company reasonably agree that such failure to sell is due to specified reasons set forth in the Merger Agreement or (ii) the combined company transfers the supply of covered product of a restricted customer away from International Paper and its subsidiaries to another supplier, unless the combined company provides notice of the terms such other supplier is willing to offer and International Paper is unwilling to supply such covered product on terms not less favorable than those offered by such other supplier.
In the event that a division producing covered products is sold or transferred by International Paper, the non-solicit obligations shall continue to be binding upon such division after such sale or transfer until the end of the two-year period.
Non-Competition
For a period of three years from and following the effective time of the Merger, International Paper agreed that it and its subsidiaries would not, without the prior written consent of the combined company, acquire any interest in, operate, manage, control, or engage in certain restricted businesses specified in the Merger Agreement; provided, however, that nothing in the Merger Agreement prohibits (i) International Paper or its subsidiaries from selling or distributing products manufactured by third parties that are ancillary to and sold in connection with sales of products manufactured by International Paper or its affiliates so long as all such products in the aggregate (other than certain specified products) are of a de minimis value in relation to all International Paper manufactured covered products in the aggregate, (ii) selling any products to or performing any services for the combined company or (iii) acquiring the assets or capital stock or other equity interests of any other entity engaged in certain restricted businesses (provided that International Paper divests or terminates such restricted business within 12 months of its acquisition). The protocol for divesting such acquired restricted business is set forth in the Merger Agreement. The restricted business does not include (i) the sale by International Paper or any of its subsidiaries of products manufactured by International Paper or any of its subsidiaries, or (ii) any other activities conducted by International Paper or any of its subsidiaries as of the date of the Merger Agreement (so long as there is no material expansion thereof after the date of the Merger Agreement), other than the xpedx business.
 
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Other Covenants and Agreements
The Merger Agreement contains certain other covenants and agreements, including covenants (with certain exceptions specified in the Merger Agreement) relating to:
 
 	•	 	cooperation among the parties relating to the prompt preparation and filing of the registration statement of which this prospectus forms a part;	
 
 	•	 	prior to the effective time of the Merger, the approval of the listing on the NYSE of the SpinCo common stock issued pursuant to the Distribution and the Merger;	
 
 	•	 	SpinCo’s actions as may be required under state securities or blue sky laws in connection with the issuance of shares of SpinCo common stock pursuant to the Distribution and the Merger;	
 
 	•	 	assistance as any party may reasonably request and as may be reasonably necessary or appropriate in effectuating the provisions of the Merger Agreement;	
 
 	•	 	cooperation of any third parties necessary for each party to fulfill its obligations under the Merger Agreement;	
 
 	•	 	confidentiality, reasonable access with respect to certain information relating to the parties and the preservation of records following the effective time of the Merger;	
 
 	•	 	International Paper’s obligation to use its reasonable best efforts to list all license agreements or contracts that are material to the xpedx business, subject to certain exceptions;	
 
 	•	 	the making of public announcements or press releases with respect to the Merger or the Transactions;	
 
 	•	 	defense of litigation and other actions attempting to challenge, enjoin, restrain or prohibit the consummation of the Transactions;	
 
 	•	 	the notification of events, the occurrence or nonoccurrence of which could result in a closing condition to the Merger Agreement being incapable of being fulfilled;	
 
 	•	 	the delivery of payoff letters with respect to certain indebtedness and the delivery of invoices with respect to those expenses that the parties to the Merger Agreement have agreed to share;	
 
 	•	 	termination of the advisory agreement among UWWH, Unisource and Bain Capital;	
 
 	•	 	the delivery of audited and unaudited financial statements between the signing of the Merger Agreement and the effective date of the Merger;	
 
 	•	 	the development of a system of internal controls over financial reporting and integration of the financial reporting systems of SpinCo and UWWH; and	
 
 	•	 	the amount allocated to International Paper with respect to the restructuring of the xpedx business.	
Amendment; Extension; Waiver
The Merger Agreement may be amended by the parties at any time, provided that any amendment that by law requires the further approval of the shareholders of SpinCo, UWWH or UWW and the member approval of xpedx Intermediate will not be made without such approvals. Prior to the effective time of the Merger, the parties may extend the time for the performance of any of the obligations or other acts of the parties or waive any inaccuracies in the representations and warranties or compliance with any of the agreements or conditions contained in the Merger Agreement.
 
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Termination of the Merger; Termination Fees
The Merger Agreement may be terminated at any time before the effective time of the Merger by the mutual written consent of International Paper and UWWH. It may also be terminated by either International Paper or UWWH if:
 
 	•	 	the effective time of the Merger has not occurred on or before January 5, 2015 unless the failure to effect the Merger by that date is due to the failure of the party seeking to terminate the Merger Agreement to perform its obligations set forth in the Merger Agreement; or	
 
 	•	 	if any law or order of any governmental authority preventing or prohibiting the completion of the Transactions has become final and nonappealable.	
The Merger Agreement may also be terminated by:
 
 	•	 	UWWH at any time before the effective time if there has been a material breach by International Paper or SpinCo of any of its representations, warranties or covenants or agreements contained in the Merger Agreement, or any such representation and warranty has become untrue in any material respect, and such breach or inaccuracy has not been cured within 30 business days following notice of such breach (so long as UWWH is not then in material breach of any covenant, representation or warranty or other agreement contained in the Merger Agreement which breach would cause the closing conditions of International Paper or SpinCo not to be satisfied if the closing were to occur at the time of termination); or	
 
 	•	 	International Paper at any time before the effective time if there has been a material breach by UWWH of any of its representations, warranties or covenants or agreements contained in the Merger Agreement, or any such representation and warranty has become untrue in any material respect, and such breach or inaccuracy has not been cured within 30 business days following notice of such breach (so long as International Paper is not then in material breach of any covenant, representation or warranty or other agreement contained in the Merger Agreement which breach would cause the closing conditions of UWWH or the UWWH Stockholder not to be satisfied if the closing were to occur at the time of termination).	
In the event the Merger Agreement is terminated, UWWH and International Paper, as applicable, may be obligated to pay a termination fee to the other party as follows:
 
 	•	 	If the Merger Agreement is terminated as described in the second bullet of the preceding paragraph and (i) an acquisition proposal for UWWH has commenced or is publicly disclosed, proposed or announced or otherwise communicated to UWWH or the UWWH Stockholder prior to such termination and (ii) within 15 months following such termination, UWWH or any of its subsidiaries enters into a definitive agreement with respect to such acquisition proposal, UWWH will pay to International Paper a termination fee equal to $6 million; and	
 
 	•	 	If the Merger Agreement is terminated as described in the first bullet of the preceding paragraph and (i) an acquisition proposal for the xpedx business has commenced or is publicly disclosed, proposed or announced or otherwise communicated to International Paper or the International Paper shareholders prior to such termination and (ii) within 15 months following such termination, International Paper or SpinCo enters into a definitive agreement with respect to such acquisition proposal, International Paper will pay to UWWH a termination fee equal to $6 million.	
Fees and Expenses
Generally, all fees and expenses incurred in connection with the Transactions are to be paid by the party incurring such fees or expenses. Expenses incurred in connection with the SpinCo debt financing or by certain consultants or for certain other products or services for the benefit of the combined company are to be paid (i) by the combined company if the Merger is consummated or (ii) one-half by International Paper and one-half by UWWH if the Merger is not consummated. Subject to certain exceptions, the combined company will bear certain scheduled severance obligations, transaction bonus obligations and retention bonus obligations of UWWH and the xpedx business.
 
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 THE CONTRIBUTION AND DISTRIBUTION AGREEMENT AND THE ANCILLARY AGREEMENTS
Contribution and Distribution Agreement
The following is a summary of material provisions of the Contribution and Distribution Agreement, which we entered into on January 28, 2014, as amended on May 28, 2014. This summary is qualified in its entirety by reference to the full text of the Contribution and Distribution Agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part.
General
The Contribution and Distribution Agreement among International Paper, SpinCo, UWWH and the UWWH Stockholder provides for, among other matters, the principal corporate transactions required to effect the proposed contribution of the xpedx business to SpinCo and distribution of SpinCo common stock to International Paper shareholders and certain other terms governing the relationship between International Paper and SpinCo with respect to or as a result of the Contribution and the Distribution.
Preliminary Transactions
Transfer of Assets . Pursuant to the Contribution and Distribution Agreement, and subject to certain exceptions, International Paper will transfer or cause to be transferred to xpedx LLC all of the right, title and interest of International Paper and its affiliates in the assets that are primarily used or held for use in, or that primarily arise from, the operation or conduct of the xpedx business or that are produced by the xpedx business for use in or sale by the xpedx business, including certain subsidiaries of International Paper through which the xpedx business is conducted internationally, after which all of the membership interests in xpedx LLC will be transferred to xpedx Intermediate and, in turn, all of the membership interests in xpedx Intermediate will be transferred to SpinCo.
The xpedx business consists of the business segment of International Paper referred to in International Paper’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 as “Distribution,” which includes the business of purchasing for resale, and reselling, or acting as a broker for the purchase or sale of, products manufactured by third parties, including (i) printing, reprographics and writing paper products, (ii) paperboard and other consumer packaging products, (iii) containerboard, linerboard, corrugated products and other industrial packaging products, (iv) tissue, toilet paper, paper towels, paper napkins, plates, utensils, cups, and food containers, (v) cleaning products, liners, sanitation products, and other facilities supplies, (vi) cushioning and void fill products, shrink film, stretch film, pallet covering materials, strapping, bags, tape or other packaging materials and (vii) warehouse supply products, in each case, in North America. For purposes of the Contribution and Distribution Agreement, the xpedx business does not include the International Paper Asia Distribution business, nor does it include certain international entities that no longer have any operations or material assets.
Transfer of Liabilities . The transfer of assets to SpinCo is made subject to the assumption by xpedx LLC of liabilities of International Paper or its subsidiaries to the extent relating to or arising from the xpedx business or the transferred assets, subject to certain exceptions.
Exceptions to Transfers . Transfers of assets and liabilities are subject to receipt of applicable consents, waivers and approvals. International Paper must use its reasonable best efforts to obtain such consents, waivers and approvals that are required in order to effect the transfers of assets and liabilities. If International Paper cannot do so prior to the Distribution, it must use its reasonable best efforts (and SpinCo must cooperate with International Paper) to establish arrangements under which the SpinCo Group will obtain the economic claims, rights and benefits and assume the economic burden with respect to such assets and liabilities as closely as possible with the use of reasonable best efforts to that which would be applicable if the consent had been obtained and the asset or liability transferred.
 
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Consideration . Following certain preliminary transfers of assets and liabilities, and prior to the Distribution and Merger, International Paper will contribute all of the membership interests in xpedx Intermediate to SpinCo in exchange for the issuance of SpinCo common stock to International Paper and a special payment to International Paper equal to an amount determined by International Paper, which shall not exceed $400 million, subject to the working capital and net indebtedness adjustments described below.
The financing associated with these transactions is described further in “The Merger Agreement—Covenants—Financing” and “Description of Material Indebtedness.”
Working Capital and Net Indebtedness Adjustments
The Contribution and Distribution Agreement provides that not less than three (but not more than five) business days prior to the anticipated date of the Distribution, International Paper will cause to be prepared and delivered to SpinCo and UWWH an unaudited balance sheet of the xpedx business and a statement setting forth its good faith estimate of working capital and net indebtedness (as defined in the Contribution and Distribution Agreement as “Spinco Closing Date Working Capital” and “Spinco Closing Date Net Debt,” respectively) of SpinCo and its subsidiaries as of the Closing Date. If the estimated working capital of SpinCo as of the date of the Distribution exceeds $661.3 million, the special payment to International Paper will be increased by an amount equal to the excess. If the estimated net indebtedness of SpinCo as of the date of the Distribution is less than $5.9 million, the special payment to International Paper will be increased by an amount equal to the absolute value of the difference. If the estimated working capital of SpinCo as of the date of the Distribution is less than $661.3 million, the special payment to International Paper will be reduced by an amount equal to the absolute value of the difference. If the estimated net indebtedness of SpinCo as of the date of the Distribution is more than $5.9 million, the special payment to International Paper will be decreased by an amount equal to the excess. The Contribution and Distribution Agreement also provides that the special payment may, in certain circumstances, be increased by the estimated working capital and net indebtedness adjustments of UWWH, as described further in “The Merger Agreement—Working Capital, Net Indebtedness Adjustments and Transaction Expenses Adjustments.”
The Contribution and Distribution Agreement provides that within 90 days after the Distribution, the combined company will cause to be prepared and delivered to International Paper an unaudited balance sheet of the xpedx business and a calculation of the amounts referred to above. The parties will resolve any disputes they may have over the statement and agree upon a final, conclusive calculation of such amounts, and if they are unable to resolve such disputes, they will retain an accounting firm to make a final determination of the amounts. After the amounts are finally determined, an appropriate payment will be made to account for any difference between the finally determined amounts and the estimated amounts used at closing.
Earnout Payment
The Contribution and Distribution Agreement provides that in 2020 the combined company may be required to pay to International Paper an earnout payment of up to $100 million if the combined company’s aggregate EBITDA for its 2017, 2018 and 2019 fiscal years exceeds an agreed-upon target EBITDA of $759 million. The amount of the earnout payment, if owed by the combined company, will be an amount equal to (i) the excess of the surviving corporation’s aggregate EBITDA for its 2017, 2018 and 2019 fiscal years over the agreed-upon target, multiplied by (ii) four divided by three, capped at $100 million in the aggregate. For purposes of the earnout payment, EBITDA means consolidated net income (loss), plus interest expense, income tax expense, depreciation and amortization, minus interest income. The EBITDA target is subject to certain adjustments, including adjustments for acquisitions, dispositions, extraordinary items of gain or loss, asset write-ups or write-downs, restructuring costs and out-of-pocket expenses. There can be no assurance that the combined company’s aggregate EBITDA for its 2017, 2018 and 2019 fiscal years will exceed the agreed-upon target EBITDA, and the combined company’s actual results may be materially lower. See “Risk Factors.”
If any person or group acquires a majority of the voting power of the combined company’s capital stock, or a majority of the assets of the combined company and its subsidiaries, such person or group must agree in writing
 
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to International Paper that (i) the collective business activities of the combined company will continue to be operated and accounted for separately from any other business activities and operations, (ii) complete and accurate books of account and records covering all transactions relating to the computation of the earnout payment will be maintained and (iii) the combined company will remain an SEC registrant or will provide International Paper with unaudited quarterly and audited annual financial statements and financial data of the type and on the timetable as if it were an SEC registrant. If the combined company and such acquiror do not provide International Paper with such written agreement prior to the closing of such acquisition, and such acquisition closes prior to the end of fiscal year 2019, the earnout payment will be deemed to be due and payable to International Paper in an amount equal to $100 million, subject to the right described in the following paragraph.
At any time prior to the date the earnout payment is to be paid, the combined company may elect to make a payment to International Paper in full satisfaction of its obligation to make the earnout payment by paying an amount equal to the present value of $100 million on the date of payment assuming a discount rate of 6%.
Covenants
Each of International Paper and SpinCo has agreed to take certain actions after the signing of the Contribution and Distribution Agreement. These actions include the following:
 
 	•	 	immediately prior to the Distribution, International Paper and SpinCo terminating any agreements entered into pursuant to any contract or other arrangement, formal or informal (including with respect to intercompany cash balances and accounts and notes payable), between International Paper and its subsidiaries (such subsidiaries determined assuming that the Distribution has occurred), collectively referred to as the International Paper Group, on the one hand, and SpinCo or any of its subsidiaries, collectively referred to as the SpinCo Group, on the other hand (except as contemplated by the other agreements executed in connection with the Transactions, outstanding payment obligations with respect to ordinary course commercial transactions and specific agreements intended to replace intercompany arrangements between the International Paper Group and the SpinCo Group);	
 
 	•	 	immediately prior to the Distribution, International Paper assigning to SpinCo or a member of the SpinCo Group designated by UWWH all of the agreements to which any employee of the SpinCo Group is a party that contain restrictive covenants related to confidentiality, ownership of intellectual property, non-competition or non-solicitation;	
 
 	•	 	immediately prior to the date of the Distribution, International Paper and SpinCo electing new directors of SpinCo;	
 
 	•	 	appointing Deloitte & Touche LLP as the auditors of SpinCo (and the surviving corporation after the Merger), subject to a contrary determination by the board of directors of SpinCo (or the surviving corporation after the Merger);	
 
 	•	 	cooperating in good faith to prepare and negotiate supply agreements for the provision by International Paper to SpinCo of coated paperboard and printing and communications papers and the provision by SpinCo to International Paper of certain paper and supply products in each case which will include terms set forth in the disclosure letter to the Contribution and Distribution Agreement; and	
 
 	•	 	cooperating in seeking to release the International Paper Group, on the one hand, and the SpinCo Group, on the other hand, from guarantee obligations that either group may have entered into with respect to the other’s business and providing indemnification with respect to any losses in connection with the guarantees.	
Conditions to the Completion of the Spin-Off
The Contribution and Distribution Agreement provides that the distribution of SpinCo common stock will occur only if the special payment to International Paper has been made and each condition to the obligations of
 
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International Paper and SpinCo to consummate the Merger shall have been fulfilled or waived by International Paper (except for the consummation of the contribution and the Distribution). See “The Merger Agreement—Conditions to Consummation of the Merger.”
Subsequent Transfers
In the event that at any time during the two-year period following the Distribution International Paper becomes aware that it possesses any assets or liabilities that should have been transferred to the SpinCo Group as part of the Contribution, International Paper will hold those assets or liabilities in trust, pay over to SpinCo any benefits received by International Paper with respect to such assets and cause the prompt transfer of the assets or liabilities to SpinCo or a member of the SpinCo Group. In the event that at any time during the two-year period following the Distribution a member of the SpinCo Group becomes aware that it possesses any assets or liabilities that should not have been transferred to SpinCo, SpinCo will hold those assets or liabilities in trust, pay over to International Paper any benefits received by SpinCo with respect to such assets and cause the prompt transfer of the applicable assets or liabilities to International Paper.
Mutual Release and Indemnification
SpinCo and International Paper have each agreed to release the other party and the other party’s respective subsidiaries and representatives from any and all liabilities that it has or may have against the other party which exist or arise out of or relate to events, circumstances or actions taken by the other party occurring or failing to occur or any conditions existing at or prior to the time of the spin-off. The mutual release is subject to specified exceptions set forth in the Contribution and Distribution Agreement. The specified exceptions include:
 
 	•	 	any liability assumed, transferred, assigned or allocated to SpinCo or to International Paper in accordance with, or any liability or obligation of either of them arising under the Contribution and Distribution Agreement, any other transaction agreements or any of the contracts or affiliate arrangements contemplated thereby; and	
 
 	•	 	the ability of any person to enforce its rights under the Contribution and Distribution Agreement, any other Transaction Agreements or any of the contracts or affiliate arrangements contemplated thereby.	
SpinCo and UWWH have agreed to indemnify, defend and hold harmless the International Paper Group and certain other related parties from and against all indemnifiable losses relating to or arising from (a) the liabilities of the xpedx business assumed by SpinCo in accordance with the terms of the Contribution and Distribution Agreement; (b) any breach by UWWH or its subsidiaries of any obligation, covenant or agreement pursuant to the Transaction Agreements to be performed by them prior or subsequent to the Closing Date; (c) any breach by any member of the SpinCo Group of any obligation, covenant or agreement pursuant to the Transaction Agreements to be performed by them subsequent to the Closing Date (in the case of each of clauses (b) and (c), in accordance with the applicable survival period(s) set forth therein); and (d) any breach of the representation contained in the Merger Agreement that the information supplied by UWWH for inclusion in this prospectus does not contain an untrue statement of a material fact or omission of a material fact.
International Paper has agreed to indemnify, defend and hold harmless SpinCo and its subsidiaries and certain other related parties from and against all indemnifiable losses relating to or arising from (a) any liabilities not transferred to SpinCo in accordance with the terms of the Contribution and Distribution Agreement; (b) any breach by International Paper or its subsidiaries of any obligation, covenant or agreement pursuant to the Transaction Agreements to be performed by them prior or subsequent to the Closing Date; (c) any breach by any member of the SpinCo Group of any obligation, covenant or agreement pursuant to the Transaction Agreements to be performed by them prior to the Closing Date (in the case of each of clauses (b) and (c), in accordance with the applicable survival period(s) set forth therein); and (d) any breach of the representation contained in the Merger Agreement that the information supplied by International Paper or SpinCo for inclusion in this prospectus does not contain an untrue statement of a material fact or omission of a material fact.
 
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The UWWH Stockholder has agreed to indemnify, defend and hold harmless SpinCo, its subsidiaries and certain other related parties from and against all indemnifiable losses relating to or arising from any breach of the covenants of UWWH in the Merger Agreement related to (a) any material increases in the compensation (including bonus and incentive compensation) or fringe benefits of any employee of UWWH or (b) any transaction or severance bonus obligations entered into by UWWH and not disclosed to International Paper prior to the date of the Merger Agreement.
Expenses
All fees and expenses incurred by the parties in connection with the transactions contemplated by the Contribution and Distribution Agreement and the other Transaction Agreements will be paid as provided for in the Merger Agreement, provided that SpinCo will reimburse International Paper for all financial printer costs in connection with the preparation of any information statement and Form 8-K in connection with the transactions contemplated by the Merger Agreement and Contribution and Distribution Agreement and all mailing costs associated with delivery to International Paper shareholders of such information statement. See “The Merger Agreement—Fees and Expenses.”
Additional Post-Closing Covenants
The Contribution and Distribution Agreement contains additional post-closing covenants of International Paper and SpinCo (as the combined company following the Merger), including:
 
 	•	 	restrictions on the SpinCo Group and the International Paper Group using any material showing any affiliation with the other group (and the International Paper name being removed from the corporate names of the SpinCo Group) other than as provided in the Transaction Agreements;	
 
 	•	 	restrictions on SpinCo from repurchasing or redeeming any of its capital stock prior to the second anniversary of the Closing Date;	
 
 	•	 	restrictions on SpinCo from declaring or paying any dividend on its capital stock (except for regular quarterly cash dividends) prior to the second anniversary of the Closing Date, unless the combined company makes a payment in full satisfaction of its obligation to make an earnout payment to International Paper, as described further in “—Earnout Payment,” in which case such restriction continues in full force and effect until January 1, 2016;	
 
 	•	 	International Paper’s agreement to use reasonable best efforts to assert claims under occurrence-based insurance policies with respect to incidents occurring prior to the Distribution (subject to cost reimbursement);	
 
 	•	 	providing certain access to books and records relating to the xpedx business following the Distribution; and	
 
 	•	 	International Paper’s agreement to transfer, provide access to or provide a replacement for certain assets necessary to operate the xpedx business that are not transferred to SpinCo pursuant to the terms of the Contribution and Distribution Agreement and not identified as such.	
Amendment; Waiver
The Contribution and Distribution Agreement may be amended only by a written instrument signed by each of the parties, and any right may be waived only in a written instrument signed by the party against whom the waiver is to be effective. No failure or delay by any party to the Contribution and Distribution Agreement to exercise a right operates as a waiver thereof.
Termination
Following termination of the Merger Agreement, the Contribution and Distribution Agreement may be terminated and the spin-off abandoned at any time prior to the Distribution by and in the sole discretion of International Paper.
 
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Tax Receivable Agreement
The following is a summary of material provisions of the Tax Receivable Agreement. This summary is qualified in its entirety by reference to the Tax Receivable Agreement, which is included as an exhibit to the registration statement of which this prospectus is a part.
The Tax Receivable Agreement sets forth the terms by which SpinCo generally will be obligated to pay UWWH Stockholder an amount equal to 85% of the U.S. federal, state and Canadian income tax savings, if any, that SpinCo actually realizes as a result of the utilization of Unisource’s net operating losses attributable to taxable periods prior to the date of the Merger.
For purposes of the Tax Receivable Agreement, SpinCo’s income tax savings will generally be computed by comparing SpinCo’s actual aggregate U.S. federal, state and Canadian income tax liability for taxable periods (or portions thereof) beginning after the date of the Merger to the amount of SpinCo’s aggregate U.S federal, state and Canadian income tax liability for taxable periods (or portions thereof) beginning after the date of the Merger had SpinCo not been able to utilize Unisource’s net operating losses attributable to taxable periods prior to the date of the Merger. SpinCo will pay to UWWH Stockholder an amount equal to 85% of such tax savings, plus interest at a rate of LIBOR plus 1.00%, computed from the earlier of the date that SpinCo filed its U.S. federal income tax return for the applicable taxable year and the date that such tax return was due (without extensions) until payments are made. Under the Tax Receivable Agreement, UWWH Stockholder will not be required to reimburse SpinCo for any payments previously made if such tax benefits are subsequently disallowed or adjusted (although future payments under the Tax Receivable Agreement would be adjusted to the extent possible to reflect the result of such disallowance or adjustment).
If Unisource ceases to be includable in SpinCo’s affiliated group of corporations for U.S. federal income tax purposes, SpinCo shall cause the parent of the affiliated group of corporations that includes Unisource to enter into an agreement with UWWH Stockholder that is substantially similar to the Tax Receivable Agreement. In addition, SpinCo shall cause any indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of SpinCo to assume and agree to perform the obligations under the Tax Receivable Agreement in the same manner that SpinCo would be required to perform had no succession occurred.
The Tax Receivable Agreement provides that in the event SpinCo breaches any of its material obligations by operation of law as a result of the rejection of it in a case commenced under the United States Bankruptcy Code, then all obligations under the Tax Receivable Agreement will be accelerated. If SpinCo does not timely make payments under the Tax Receivable Agreement for any reason, except as described below, such payments will accrue interest at a rate of LIBOR plus 5.00% per annum until paid. The Tax Receivable Agreement provides that SpinCo is permitted to defer payments under the Tax Receivable Agreement if such payments (or payments to SpinCo from its subsidiaries to allow SpinCo to make such payments) are not permitted pursuant to the terms of SpinCo’s or its direct or indirect subsidiary’s debt agreements. Any payment so deferred shall accrue interest at a rate of LIBOR plus 1.00% per annum until paid.
UWWH Stockholder and later beneficiaries of the Tax Receivable Agreement are permitted to assign or transfer their rights thereunder, provided that in certain circumstances the transferor must notify SpinCo of the proposed transfer, including its terms, and SpinCo will have a right to acquire the transferred interest on such terms.
The Tax Receivable Agreement will be binding on and inure to the benefit any permitted assignees of UWWH Stockholder and to any successors to any of the parties of the Tax Receivable Agreement to the same extent as if such permitted assignee or successor had been an original party to the Tax Receivable Agreement. The Tax Receivable Agreement may be amended only by a written instrument signed by each of the parties. Any provision of the Tax Receivable Agreement may be waived only if such waiver is in writing and signed by the party against whom the waiver is to be effective.
 
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Transition Services Agreement
The following is a summary of material provisions of the Transition Services Agreement. This summary is qualified in its entirety by reference to the Transition Services Agreement, which is included as an exhibit to the registration statement of which this prospectus is a part.
The Transition Services Agreement, to be dated as of the Closing Date, by and between International Paper and SpinCo, sets forth the terms and conditions for the provision by each of International Paper and SpinCo of services to the other, from and following the Closing Date. A party providing a service is referred to as the service provider and a party receiving a service is referred to as the service recipient.
The term of the Transition Services Agreement extends for a period of up to one year from the Closing Date, and, subject to certain fee increases and obtaining any necessary consents, can be extended for up to a total of two years from the Closing Date at the election of the service recipient. Individual services provided under the agreement may terminate earlier in accordance with the schedules to the Transition Services Agreement or, in most cases, at the option of the service recipient. The period during which services are provided is referred to as the transition period. The fees to be paid by SpinCo under the Transition Services Agreement for the one-year period from the Closing Date are estimated to be approximately $40 million.
The services expected to be performed by International Paper will relate generally to the following areas, among others:
 
 	•	 	Real estate services, including lease administration and transaction management;	
 
 	•	 	Finance and accounting services, including accounts receivable services;	
 
 	•	 	Network optimization services; and	
 
 	•	 	Information technology services, including data center, WAN, remote access, facility support, messaging, internet, document management, telecom, support and other services.	
In addition, each of SpinCo and International Paper is generally entitled to obtain additional services from the other if those services are needed by the service recipient and were provided to it by the service provider prior to the Closing (or, in the case of services to be received by SpinCo, are services it cannot obtain on commercially reasonable terms from third parties and that are provided by International Paper to its other businesses).
However, the parties have agreed that International Paper will not be required to provide certain services related to information technology, finance, accounting, sourcing and procurement, tax, legal and compliance, government relations, investor relations, risk management, human resource and treasury functions. Within 90 days after the Closing Date, the parties will consult regarding the terms of and a plan for the service migration.
The Transition Services Agreement may be amended only by a written instrument signed by each of the parties, and any right may be waived only in a written instrument signed by the party against whom the waiver is to be effective. No failure or delay by any party to the Transition Services Agreement to exercise a right operates as a waiver thereof.
Supply Agreements
The Contribution and Distribution Agreement provides that, prior to the Closing Date, UWWH, SpinCo and International Paper will cooperate in good faith to prepare and negotiate supply agreements to be entered into at the time of the Distribution, pursuant to which International Paper will supply xpedx LLC with certain printing and communications papers and coated paperboard and xpedx LLC will supply International Paper with certain products, in each case, for a period of 18 months.
 
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Employee Matters Agreement
In connection with the Transactions, International Paper, SpinCo and UWWH entered into an Employee Matters Agreement with respect to the transfer of employees engaged in the xpedx business and matters related to the terms of employment, health and welfare benefits, fringe benefits, retirement plans, and collective bargaining agreements. The following is a summary of material provisions of the Employee Matters Agreement. This summary is qualified in its entirety by reference to the Employee Matters Agreement, dated as of January 28, 2014, as amended on June 4, 2014, which is filed as an exhibit to the registration statement of which this prospectus forms a part.
Transfer of Employment and General Allocation of Employee Liabilities
Prior to the Distribution, International Paper will take all actions necessary to ensure that each employee working in the xpedx business, except those specifically designated to remain with International Paper, is employed by SpinCo or its Affiliates no later than the Distribution. In general, SpinCo will assume all employment-related liabilities related to such transferred xpedx business employees, and International Paper will assume or retain all employment-related liabilities related to its retained employees. From January 28, 2014 until the Effective Time, International Paper has agreed not to solicit or otherwise transfer any xpedx business employee to another International Paper business without prior written consent of UWWH, and UWWH has agreed not to solicit any xpedx business employee (other than on behalf of SpinCo) or any other employee to be retained by International Paper without prior written consent of International Paper.
Collective Bargaining Agreements
As of the Distribution, SpinCo will assume existing collective bargaining agreements covering employees of the xpedx business and, in accordance with applicable law, be bound by the terms of any expired collective bargaining agreements covering employees of the xpedx business. With limited exceptions, SpinCo will assume all liabilities related to such collective bargaining agreements, regardless of whether the liabilities arise from or relate to events occurring prior to, on or after the Distribution. International Paper will retain any liabilities related to any alleged failure to satisfy any “decision” or “effects” bargaining obligations pursuant to the collective bargaining agreements arising from the transactions contemplated by the Transaction Agreements.
Benefit Plans and Arrangements
Effective as of the Distribution, employees working in the xpedx business will generally cease active participation in International Paper’s employee benefit plans, and International Paper will retain all liabilities related to employee benefit plans sponsored or maintained by International Paper, including on behalf of xpedx business employees. Following the Distribution, SpinCo will be required to notify International Paper promptly of any termination of employment of certain employees who are identified by International Paper; this information will be relevant for a determination by International Paper of benefits to which such employee may be entitled under the International Paper employee benefit plans.
Following the Distribution, SpinCo will recognize xpedx business employees’ accrued and unused paid time off and allow employees to use such time after the Distribution in accordance with SpinCo policies.
Prior to the Distribution, SpinCo will, in consultation with UWWH, establish new employee benefit plans in which eligible xpedx business employees will participate no later than the Distribution. The new employee benefit plans for the benefit of xpedx business employees will be no more favorable than the analogous International Paper benefit plans that previously covered such employees and will not, unless required by a collective bargaining agreement, include any defined benefit pension plan, non-qualified retirement plan or non-qualified deferred compensation plan, or retiree medical program. Subject to the following paragraph, the UWWH-sponsored employee benefit plans will remain in effect and continue to cover eligible UWWH employees.
 
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After the effective time of the Merger, the board of directors of SpinCo will have full discretion to determine the scope, terms and conditions of the employee benefit plans covering the xpedx business employees and UWWH employees, subject to applicable law and the terms of any applicable collective bargaining agreement. For any new plans established for either xpedx business employees or UWWH employees after the effective time of the Merger, SpinCo will use its reasonable best efforts to prevent interruption of coverage and to credit service of such employee under all SpinCo benefit plans for purposes of eligibility and vesting, and, for any vacation, paid time off plan or severance plan, for determination of level of benefits. SpinCo is not required to establish any retiree or post-termination medical, life or other benefit plan, but must establish tax-qualified health care and dependent care flexible spending account plans.
Cash and Equity Incentive Compensation Plans
Effective on or as soon as practicable following the Distribution, the board of directors of SpinCo or its designee will establish incentive plans for management incentive, commissions or goal sharing awards for xpedx business employees who will cease to participate in such plans maintained by International Paper by reason of the Transactions. SpinCo has the sole obligation to fund and pay such cash incentives for xpedx business employees. International Paper is solely responsible for all liabilities under any of its plans that provide for equity incentive awards in respect of International Paper common stock. Any outstanding International Paper equity incentive awards held by xpedx business employees will be treated by International Paper in accordance with the terms of the applicable International Paper plan as though each xpedx business employee incurred a termination without cause from International Paper as of the Distribution.
Retirement Plans
International Paper will fully vest each xpedx business employee who is a participant in any International Paper defined benefit pension plan as of the Distribution, and each such employee will be eligible to receive pension benefits in accordance with the terms of the applicable International Paper plan. No transfers of assets or liabilities from an International Paper defined benefit pension plan will occur as a result of the Transactions. SpinCo will not establish a defined benefit pension plan for xpedx business employees unless otherwise required by an assumed collective bargaining agreement. If such a pension plan is established by SpinCo, it will provide the pension benefit required by the collective bargaining agreement, offset by the pension benefit provided to such employee by the International Paper pension plan based on service prior to the Distribution.
SpinCo will continue its participation in multiemployer pension and multiemployer health and welfare plans on behalf of covered union employees of the xpedx business to the extent required by an assumed collective bargaining agreement. SpinCo will assume all liabilities related to such multiemployer plans to the extent related to the xpedx business, whether arising from or relating to events occurring prior to, on or after the Distribution, and International Paper will assume or retain any liabilities related to such multiemployer plans to the extent related to International Paper’s unrelated businesses whether arising from or relating to events occurring prior to, on or after the Distribution.
International Paper will fully vest all xpedx business employees in their accounts under the International Paper 401(k) plan as of the Distribution. SpinCo will establish a 401(k) plan and trust, in consultation with UWWH, to cover xpedx business employees effective as of the Distribution, and as soon as practicable after the Distribution this SpinCo 401(k) plan will accept a transfer of accounts of xpedx business employees from the International Paper 401(k) plan. Any account that is invested in International Paper common stock will be converted to cash prior to such transfer, such that the SpinCo 401(k) plan will not hold any investments in International Paper common stock. SpinCo will not have any liability with respect to the investment of xpedx business employees’ 401(k) plan accounts in International Paper common stock prior to the transfer or any failure by International Paper or any fiduciary, agent, administrator or recordkeeper to comply with applicable law or contract governing the International Paper 401(k) plan.
 
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Health and Welfare Claims
The applicable International Paper-sponsored health or welfare plans will retain the obligation to pay any claims incurred by xpedx business employees prior to the Distribution, and SpinCo’s new health and welfare plans will have the obligation to pay any claims incurred by xpedx business employees after the Distribution.
Amendment; Waiver
The Employee Matters Agreement may be amended only by a written instrument signed by each of the parties, and any right may be waived only in a written instrument signed by the party against whom the waiver is to be effective. No failure or delay by any party to the Employee Matters Agreement to exercise a right operates as a waiver thereof.
Tax Matters Agreement
The following is a summary of material provisions of the Tax Matters Agreement. This summary is qualified in its entirety by reference to the Tax Matters Agreement, dated as of January 28, 2014, which is included as an exhibit to the registration statement of which this prospectus is a part.
The Tax Matters Agreement addresses federal, state, local and non-U.S. tax matters related to the Distribution, Merger, Subsidiary Merger and other Transactions. In particular, the Tax Matters Agreement addresses the filing of tax returns by SpinCo and International Paper, tax indemnification obligations of International Paper and SpinCo, the conduct of tax proceedings by International Paper and SpinCo and representations, warranties and covenants with respect to the intended tax-free treatment of the Transactions.
Pursuant to the Tax Matters Agreement, SpinCo shall indemnify International Paper for a variety of taxes, including (i) certain pre-Merger non-income taxes and non-U.S. income taxes attributable to the xpedx business and (ii) income taxes imposed on International Paper, SpinCo or UWWH attributable to a failure of the Transactions to qualify as tax-free as a result of, among other items, a breach of representations by UWWH or its shareholders, a breach of covenants (following the Distribution) by SpinCo, acquisitions of SpinCo stock after the Distribution, acquisitions of International Paper stock by UWWH and certain persons related thereto prior to the Distribution, the failure of the Merger to qualify as a reorganization under Section 368 of the Code or the failure of the Subsidiary Merger to qualify as a tax-free capital contribution under Section 351(a) of the Code. Pursuant to the Tax Matters Agreement, International Paper shall indemnify SpinCo for a variety of taxes not specifically indemnified by SpinCo, including (i) taxes attributable to any business retained by International Paper, (ii) International Paper’s consolidated U.S. federal income taxes, (iii) certain pre-Distribution income taxes of SpinCo and its subsidiaries to the extent not specifically apportioned to SpinCo pursuant to the Tax Matters Agreement, and (iv) income taxes attributable to a failure of the Transactions to qualify as tax-free to the extent not specifically apportioned to SpinCo pursuant to the Tax Matters Agreement.
The Tax Matters Agreement prohibits SpinCo and International Paper from taking actions (or refraining from taking actions) that could reasonably be expected to cause the Transactions to be taxable or to jeopardize the conclusions of the IRS ruling or opinions of counsel received by SpinCo or International Paper. In particular, for two years after the Distribution, SpinCo may not:
 
 	•	 	cease, or permit certain of its wholly-owned subsidiaries to cease, the active conduct of a business that was conducted immediately prior to the Distribution or from holding certain assets held at the time of the Distribution;	
 
 	•	 	dissolve, liquidate, take any action that is a liquidation for federal income tax purposes, merge or consolidate with any other person (other than pursuant to the Mergers), or permit certain of its wholly-owned subsidiaries from doing any of the foregoing; or	
 
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 	•	 	approve or allow an extraordinary contribution to SpinCo by its shareholders in exchange for stock, redeem or otherwise repurchase (directly or indirectly) any of SpinCo’s stock, or amend its certificate of incorporation or other organizational documents, or take any other action, if such amendment or other action would affect the relative voting rights of its capital stock.	
Nevertheless, SpinCo is permitted to take any of the actions described above if International Paper obtains a supplemental IRS private letter ruling (or, in certain circumstances, an opinion of counsel that is reasonably acceptable to International Paper) to the effect that the action will not affect the tax-free status of the Distribution or the Merger. Notwithstanding the above, under the Tax Matters Agreement, SpinCo may make stock issuances that meet certain safe harbors provided in Section 1.355-7(d) of the Treasury Regulations and may redeem any such stock so long as such issuances or redemptions are not inconsistent with formal or informal written guidance provided by the IRS in connection with the IRS ruling.
The Tax Matters Agreement will be binding on and inure to the benefit of any permitted assignees and any successor to any of the parties of the Tax Matters Agreement. The Tax Matters Agreement may be amended only by a written instrument signed by each of the parties, and any right may be waived only in a written instrument signed by the party against whom the waiver is to be effective. No failure or delay by any party to the Tax Matters Agreement to exercise a right operates as a waiver thereof.
Registration Rights Agreement
In connection with the Transactions, on the Closing Date we will enter into a registration rights agreement, or the “Registration Rights Agreement,” with the UWWH Stockholder. The following is a summary of material provisions of the Registration Rights Agreement. This summary is qualified in its entirety by reference to the full text of the Registration Rights Agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part. The registration of shares of our common stock pursuant to the exercise of registration rights described below would enable the holders to trade these shares, without restriction under the Securities Act when the applicable registration statement is deemed effective. We will pay the registration expenses, other than underwriting discounts and commissions, of the shares registered pursuant to the demand and piggyback registrations described below.
Pursuant to the terms of the Registration Rights Agreement, UWWH Stockholder may transfer our common stock to one or more of its affiliates or equityholders and may exercise registration rights on behalf of such transferees if such transferees become a party to the Registration Rights Agreement.
The demand rights described below will commence 180 days after the distribution date. We are not required to effect more than one demand registration in any 150-day period or more than two demand registrations in any 365-day period. If we believe that a registration or an offering would materially affect a significant transaction or would require us to disclose confidential information which we in good faith believe would be adverse to our interest, then we may delay a registration or filing for no more than 120 days in a 360-day period. Generally, in an underwritten offering, the managing underwriter, if any, has the right, subject to market conditions, to limit the number of shares such holders may include.
Demand Registration Rights. Under the terms of the Registration Rights Agreement, the UWWH Stockholder on behalf of the holders of shares of our common stock that are party to the Registration Rights Agreement, under certain circumstances and provided certain thresholds described in the Registration Rights Agreement are met may make a written request to us for the registration of the offer and sale of all or part of the shares subject to such registration rights, or Registrable Securities, provided that the Registrable Securities to be registered under a “long-form” registration on Form S-1 have an aggregate market value, based upon the offering price to the public, equal to at least $40 million. We may be required to make up to three long-form registrations, which may also include shelf registrations. If we are eligible to file a registration statement on Form S-3 or any successor form with similar “short-form” disclosure requirements, UWWH Stockholder on behalf of holders of Registrable Securities may make a written request to us for the registration of the offer and sale of all or part of
 
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the Registrable Securities provided that the Registrable Securities to be registered under such short-form registration have an aggregate market value, based upon the offering price to the public, equal to at least $15 million. The Registration Rights Agreement also provides for “take down” offerings, provided that the Registrable Securities proposed to be offered have an aggregate market value, based on the offering price to the public, equal to at least $15 million.
Piggyback Registration Rights . If we register the offer and sale of our common stock (other than pursuant to a demand registration or in connection with registration on Form S-4 and Form S-8 or any successor or similar forms, or relating solely to the sale of debt or convertible debt instruments) either on our behalf or on the behalf of other security holders, the holders of the Registrable Securities under the Registration Rights Agreement are entitled to include their Registrable Securities in the registration. The managing underwriters of any underwritten offering may limit the number of Registrable Securities included in the underwritten offering if the underwriters believe that including these shares would have a materially adverse effect on the offering. If the number of Registrable Securities is limited by the managing underwriter, the securities to be included first in the registration will depend on whether we or certain holders of our securities initiate the Piggyback registration. If we initiate the Piggyback registration, we are required to include in the offering (i) first, the securities we propose to sell, (ii) second, the Registrable Securities requested to be included in such registration, pro rata among holders of such Registrable Securities on the basis of the number of Registrable Securities owned by each such holder and (iii) third, any other shares of common stock requested to be included. If holders of common stock other than the Registrable Securities initiated the Piggyback registration, it is required to include in the offering (i) first, the shares of common stock other than the Registrable Securities and the Registrable Securities requested to be included in such registration, pro rata among holders of such shares of common stock and the Registrable Securities on the basis of the number of Registrable Securities owned by each such holder and (ii) second, any other shares of common stock requested to be included.
Amendment and Waiver . The Registration Rights Agreement may be amended, extended, terminated or waived only by an agreement in writing signed by each of the parties. Any party to the Registration Rights Agreement may waive any right thereunder, as to itself, by an instrument in writing signed by such party. The failure of any party to the Registration Rights Agreement to enforce any provision does not operate as a waiver thereof.
Board of Directors Matters . Upon the UWWH Stockholder and its affiliates in the aggregate ceasing to hold at least 3% of the outstanding shares of SpinCo common stock and equity securities issued in respect of such SpinCo common stock, any individual nominated by the UWWH Stockholder to the SpinCo board of directors is required to promptly tender his or her resignation to the SpinCo board of directors and will not remain a director of SpinCo, unless a majority of the SpinCo board of directors affirmatively votes not to accept such director’s resignation.
Restrictions on Acquisitions of Common Stock by the UWWH Stockholder . Commencing on the Closing Date and ending on the second anniversary of the Closing Date, the UWWH Stockholder is not permitted to acquire any shares of SpinCo common stock other than shares of SpinCo common stock issued in respect to outstanding shares of SpinCo common stock by way of stock dividend or stock split or in connection with a combination or exchange of shares, recapitalization, merger, consolidation or other reorganization. If, prior to the second anniversary of the Closing Date, the UWWH Stockholder desires to transfer shares of SpinCo common stock to a permitted transferee, as a condition to the transfer, the transferee must enter into an agreement with SpinCo to be bound by the restriction on acquiring any shares of SpinCo common stock, as described above.
 
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 DIVIDEND POLICY
We do not currently expect to declare or pay dividends on our common stock for the foreseeable future. Instead, we intend to retain earnings to finance the growth and development of our business and for working capital and general corporate purposes. Our ability to pay dividends to holders of our common stock is limited by our ability to obtain cash or other assets from our subsidiaries. Further, the agreements governing our ABL Facility, will restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. Any payment of dividends will be at the discretion of our board of directors and will depend upon various factors then existing, including earnings, financial condition, results of operations, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by applicable law, general business conditions and other factors that our board of directors may deem relevant.
Furthermore, we are restricted under the Contribution and Distribution Agreement from declaring or paying special dividends through the second anniversary of the Closing Date (or, in certain circumstances, January 1, 2016). See “The Contribution And Distribution Agreement and The Ancillary Agreements—Contribution and Distribution Agreement—Additional Post-Closing Covenants.”
 
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 CAPITALIZATION
The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2014 on a pro forma combined as adjusted basis giving effect to the Transactions, assuming they were consummated on March 31, 2014.
You should read this table in conjunction with the sections of this prospectus entitled “Selected Historical Combined Financial Data for xpedx,” “Selected Historical Consolidated Financial Data for Unisource,” “Management’s Discussion and Analysis of Financial Condition and Results of Operation of xpedx,” “Management’s Discussion and Analysis of Financial Condition and Results of Operation of Unisource,” “Description of Material Indebtedness” and our combined and Unisource’s consolidated financial statements and related notes included elsewhere in this prospectus.

 	  	Actual	 	  	 	 	 	 	 	
 	  	xpedx	 	  	Unisource	 	  	Pro Forma
Adjustments	 	 	Pro Forma
As adjusted	 	
 	  	March 31,
2014	 	  	March 31,
2014	 	  	March 31,
2014	 	 	March 31,
2014	 	
 	  	(Unaudited)	 	
 	  	(Dollars in millions)	 	
Cash and cash equivalents (a)	  	$	7.3	  	  	$	29.5	  	  	$	(3.5	) 	 	$	33.3	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Indebtedness:	  				  				  				 				
ABL Facility (b)	  	$	—  	  	  	$	262.9	  	  	$	436.0	  	 	$	698.9	  	
Other indebtedness (c)	  	 	—  	  	  	 	85.3	  	  	 	7.4	  	 	 	92.7	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Total indebtedness	  	 	—  	  	  	 	348.2	  	  	 	443.4	  	 	 	791.6	  	
Total equity	  	 	757.0	  	  	 	429.2	  	  	 	(474.7	) 	 	 	711.5	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Total capitalization	  	$	757.0	  	  	$	777.4	  	  	$	(31.3	) 	 	$	1,503.1	  	

(a)	Reflects pro forma amount of cash expected to remain on SpinCo’s balance sheet following the Transactions.	
(b)	After giving pro forma effect to the Transactions, we will have entered into the ABL Facility, which will provide for an asset-based revolving credit facility that will provide for revolving loans in an aggregate principal amount of up to $1,400.0 million (subject to availability under a borrowing base). In connection with the Transactions, subsidiaries of SpinCo will incur or assume an amount of indebtedness equal to approximately $698.9 million. This indebtedness will be used to fund (i) $400.0 million for the special payment to International Paper, subject to the working capital and indebtedness adjustments, (ii) $21.0 million in deferred financing costs, (iii) $15.0 million of Unisource transaction fees associated with the Transactions and (iv) repayment of the $262.9 million outstanding under Unisource’s senior credit facility as of March 31, 2014. Long term debt, net of current maturities, included in the unaudited pro forma condensed combined balance sheet, of $728.5 million also includes $7.4 million of non-current capital lease obligations and $22.2 million of Unisource Canadian bank overdrafts which are presented as other indebtedness as described in (c) below.	
(c)	Reflects certain other indebtedness of the combined company assumed to be outstanding upon consummation of the Transactions. The actual amount of such other indebtedness outstanding upon the closing of the Transactions may vary. Other indebtedness is expected to include (i) $70.5 million of current and non-current Unisource capital lease obligations, exclusive of the non-monetary capital lease obligation of $171.8 million and (ii) $22.2 million of Unisource Canadian bank overdrafts.	
 
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 SELECTED HISTORICAL COMBINED FINANCIAL DATA FOR XPEDX
The following selected historical condensed combined financial data of xpedx for the years ended December 31, 2013, December 31, 2012 and December 31, 2011, and as of December 31, 2013 and December 31, 2012, have been derived from xpedx’s audited combined financial statements included elsewhere in this prospectus. The selected historical condensed combined financial data of xpedx as of December 31, 2011 and for the year ended December 31, 2010 have been derived from xpedx’s audited combined financial statements not included in this prospectus. The selected historical condensed combined financial data of xpedx as of December 31, 2010 and as of and for the year ended December 31, 2009 have been derived from unaudited condensed combined financial information not included in this prospectus. The following selected historical condensed combined financial data as of and for the three month period ended March 31, 2014 and for the three month period ended March 31, 2013 have been derived from the unaudited condensed combined financial statements included herein. The selected historical condensed combined financial data of xpedx as of March 31, 2013 have been derived from the unaudited condensed combined financial statements not included in this prospectus. The selected historical condensed combined financial data presented below are not necessarily indicative of the results or financial condition that may be expected for any future period or date. This information is only a summary and you should read the table below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of xpedx” and the financial statements of xpedx and the notes thereto included elsewhere in this prospectus.

 	 	As of and for the
Three Months Ended
March 31,	 	 	As of and for the
Year Ended December 31,	 	
 	 	2014	 	 	2013	 	 	2013	 	 	2012	 	 	2011	 	 	2010	 	 	2009	 	
 	 	 	 	 	 	 	 	(as restated (1) )	 	 	(as restated (1) )	 	 	(as restated (1) )	 	 	 	 	 	 	 	
 	 	(Dollars in millions)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Statement of Operations Data	 				 				 				 				 				 				 				
Net sales	 	 	1,307.4	  	 	 	1,388.4	  	 	$	5,652.4	  	 	$	6,012.0	  	 	$	6,509.2	  	 	$	6,625.1	  	 	$	6,437.9	  	
Cost of products sold	 	 	1,088.5	  	 	 	1,159.3	  	 	 	4,736.8	  	 	 	5,036.7	  	 	 	5,475.3	  	 	 	5,585.9	  	 	 	5,446.6	  	
Distribution expenses	 	 	77.1	  	 	 	81.5	  	 	 	314.2	  	 	 	324.0	  	 	 	324.5	  	 	 	316.7	  	 	 	307.3	  	
Selling and administrative expenses	 	 	128.6	  	 	 	139.1	  	 	 	548.2	  	 	 	580.6	  	 	 	598.7	  	 	 	635.8	  	 	 	626.2	  	
Depreciation and amortization (2)	 	 	4.6	  	 	 	4.3	  	 	 	17.1	  	 	 	14.0	  	 	 	15.6	  	 	 	14.7	  	 	 	125.8	  	
Restructuring charges	 	 	(0.2	) 	 	 	7.1	  	 	 	37.9	  	 	 	35.1	  	 	 	43.6	  	 	 	—  	  	 	 	2.9	  	
Operating income (loss)	 	 	8.8	  	 	 	(2.9	) 	 	 	(1.8	) 	 	 	21.6	  	 	 	51.5	  	 	 	72.0	  	 	 	(70.9	) 	
Income tax provision (benefit)	 	 	3.7	  	 	 	(0.5	) 	 	 	0.4	  	 	 	9.1	  	 	 	21.2	  	 	 	33.0	  	 	 	7.6	  	
Income (loss) from continuing operations	 	 	5.6	  	 	 	(0.9	) 	 	 	—  	  	 	 	14.4	  	 	 	35.5	  	 	 	47.7	  	 	 	(73.0	) 	
(Loss) income from discontinued operations, net of income taxes	 	 	(0.1	) 	 	 	0.2	  	 	 	0.2	  	 	 	(10.0	) 	 	 	(13.6	) 	 	 	(9.1	) 	 	 	(10.2	) 	
Net income (loss)	 	 	5.5	  	 	 	(0.7	) 	 	$	0.2	  	 	$	4.4	  	 	$	21.9	  	 	$	38.6	  	 	$	(83.2	) 	
								
Balance Sheet Data (at period end):	 				 				 				 				 				 				 				
Accounts receivable, net	 	 	651.3	  	 	 	656.8	  	 	$	669.7	  	 	$	680.6	  	 	$	731.7	  	 	$	796.8	  	 	$	766.8	  	
Inventories, net	 	 	356.3	  	 	 	379.8	  	 	 	360.9	  	 	 	373.4	  	 	 	387.2	  	 	 	447.5	  	 	 	413.6	  	
Total assets	 	 	1,231.9	  	 	 	1,289.5	  	 	 	1,256.9	  	 	 	1,307.9	  	 	 	1,379.7	  	 	 	1,516.1	  	 	 	1,458.0	  	
Non-current liabilities	 	 	11.5	  	 	 	12.3	  	 	 	12.5	  	 	 	16.9	  	 	 	16.4	  	 	 	14.1	  	 	 	15.4	  	

(1)	The financial data presented above has been adjusted to reflect the restatement of xpedx’s Combined Balance Sheets as of December 31, 2013 and 2012 and Combined Statements of Cash Flows and Changes in Parent Company Equity for each of the three years ended December 31, 2013. The restatement is more fully described in Note 15 to the combined financial statements of xpedx included elsewhere in this prospectus. The restatement had no impact on xpedx’s Combined Statement of Operations and Comprehensive Income.	
(2)	Depreciation and amortization for the year ended December 31, 2009 includes goodwill impairment charges of $110.4 million.	
 
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 SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR UNISOURCE
The following selected historical consolidated financial data of Unisource for the fiscal years ended December 31, 2013, December 29, 2012 and December 31, 2011, and as of December 31, 2013 and December 29, 2012, have been derived from the audited consolidated financial statements of Unisource included elsewhere in this prospectus. The selected historical consolidated financial data of Unisource as of December 31, 2011 and for the fiscal year ended January 1, 2011 have been derived from Unisource’s audited consolidated financial statements not included in this prospectus. The selected historical consolidated financial data of Unisource as of and for the fiscal year ended January 2, 2010 and as of March 30, 2013 and January 1, 2011 have been derived from unaudited condensed consolidated financial information of Unisource not included in this prospectus. The following selected historical consolidated financial data as of March 31, 2014 and for the three month periods ended March 31, 2014 and March 30, 2013 have been derived from the unaudited condensed consolidated financial statements included herein. The management of Unisource believes that the unaudited consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the results as of and for the periods presented. The selected historical consolidated financial data presented below are not necessarily indicative of the results or financial condition that may be expected for any future period or date. This information is only a summary and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Unisource” and the financial statements of Unisource and the notes thereto included elsewhere in this prospectus.

 	 	As of and for the
Three Months Ended	 	 	As of and for the Fiscal Year Ended	 	
 	 	March 31,
2014	 	 	March 30,
2013	 	 	December 31,
2013	 	 	December 29,
2012	 	 	December 31,
2011	 	 	January 1,
2011	 	 	January 2,
2010	 	
 	 	 	 	 	 	 	 	 	 	 	(Dollars in millions)	 	
Statement of Operations Data:	 				 				 				 				 				 				 				
Net sales	 	$	930.7	  	 	$	979.4	  	 	$	4,089.1	  	 	$	4,123.3	  	 	$	4,327.8	  	 	$	4,239.5	  	 	$	3,996.0	  	
Cost of products sold, excluding depreciation and amortization	 	 	763.5	  	 	 	805.5	  	 	 	3,370.4	  	 	 	3,405.6	  	 	 	3,591.9	  	 	 	3,494.4	  	 	 	3,272.5	  	
Distribution expenses	 	 	62.6	  	 	 	63.1	  	 	 	250.3	  	 	 	240.0	  	 	 	252.4	  	 	 	245.4	  	 	 	227.3	  	
Selling and administrative expenses	 	 	94.6	  	 	 	101.5	  	 	 	391.3	  	 	 	392.9	  	 	 	409.0	  	 	 	421.8	  	 	 	420.3	  	
Depreciation and amortization	 	 	6.1	  	 	 	6.2	  	 	 	25.1	  	 	 	25.4	  	 	 	24.5	  	 	 	19.9	  	 	 	16.4	  	
Restructuring (gains) expenses	 	 	0.2	  	 	 	0.8	  	 	 	(3.4	) 	 	 	6.6	  	 	 	14.6	  	 	 	10.4	  	 	 	7.4	  	
Merger expenses	 	 	7.9	  	 	 	0.2	  	 	 	14.3	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Asset impairments	 	 	—  	  	 	 	0.1	  	 	 	0.4	  	 	 	4.9	  	 	 	1.0	  	 	 	—  	  	 	 	—  	  	
Other expense, net	 	 	—  	  	 	 	0.6	  	 	 	0.5	  	 	 	0.4	  	 	 	1.5	  	 	 	0.5	  	 	 	0.2	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating (loss) income	 	 	(4.2	) 	 	 	1.4	  	 	 	40.2	  	 	 	47.5	  	 	 	32.9	  	 	 	47.1	  	 	 	51.9	  	
Interest expense, net	 	 	6.3	  	 	 	7.0	  	 	 	27.4	  	 	 	28.3	  	 	 	66.7	  	 	 	72.0	  	 	 	59.8	  	
Gain on sale of equity-method investments	 	 	(6.6	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Loss) income before income taxes	 	 	(3.9	) 	 	 	(5.6	) 	 	 	12.8	  	 	 	19.2	  	 	 	(33.8	) 	 	 	(24.9	) 	 	 	(7.9	) 	
Income tax (benefit) expense	 	 	(0.3	) 	 	 	0.3	  	 	 	(228.5	) 	 	 	15.2	  	 	 	(5.5	) 	 	 	2.3	  	 	 	6.5	  	
Equity earnings of affiliates, net of taxes	 	 	(0.2	) 	 	 	(0.3	) 	 	 	(1.1	) 	 	 	(1.1	) 	 	 	(1.2	) 	 	 	(1.0	) 	 	 	(2.4	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income	 	 	(3.4	) 	 	 	(5.6	) 	 	 	242.4	  	 	 	5.1	  	 	 	(27.1	) 	 	 	(26.2	) 	 	 	(12.0	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Redeemable preferred stock dividends	 	 	(1.6	) 	 	 	(4.8	) 	 	 	(19.4	) 	 	 	(17.2	) 	 	 	(1.3	) 	 	 	—  	  	 	 	—  	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (loss) income attributable to common shareholders	 	$	(5.0	) 	 	$	(10.4	) 	 	$	223.0	  	 	$	(12.1	) 	 	$	(28.4	) 	 	$	(26.2	) 	 	$	(12.0	) 	

Balance Sheet Data (at period end):	 				 				 				 				 				 				 				
Accounts receivable, net	 	$	448.8	  	 	$	451.0	  	 	$	467.8	  	 	$	471.9	  	 	$	461.7	  	 	$	462.9	  	 	$	452.6	  	
Inventories	 	 	308.8	  	 	 	311.3	  	 	 	314.7	  	 	 	315.2	  	 	 	316.7	  	 	 	328.9	  	 	 	283.0	  	
Total assets	 	 	1,187.1	  	 	 	998.9	  	 	 	1,215.2	  	 	 	1,039.2	  	 	 	1,067.5	  	 	 	1,040.9	  	 	 	979.6	  	
Long-term debt (including current maturities)	 	 	348.2	  	 	 	367.6	  	 	 	383.4	  	 	 	382.8	  	 	 	385.6	  	 	 	577.3	  	 	 	497.1	  	
Other noncurrent liabilities	 	 	60.5	  	 	 	109.5	  	 	 	100.0	  	 	 	110.2	  	 	 	96.1	  	 	 	90.1	  	 	 	75.7	  	
 
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 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION OF COMBINED COMPANY AND RELATED NOTES
The following unaudited pro forma condensed combined balance sheet as of March 31, 2014 and the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2014 and for the year ended December 31, 2013 are based on the historical financial statements of xpedx and Unisource after giving effect to the Transactions. The unaudited pro forma condensed combined statements are based on the assumptions, adjustments and eliminations described in the accompanying notes to the unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2014 and for the year ended December 31, 2013 combines the historical condensed combined statements of operations of xpedx and the historical consolidated statements of operations for Unisource, giving effect to the Transactions as if they had occurred at the beginning of fiscal 2013. The unaudited pro forma condensed combined balance sheet combines the historical condensed combined balance sheet of xpedx as of March 31, 2014 and the historical condensed consolidated balance sheet of Unisource as of March 31, 2014, giving effect to the Transactions as if they had occurred on March 31, 2014.
The unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting, with SpinCo considered the accounting acquirer of Unisource. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values, with any excess purchase price allocated to goodwill. The pro forma purchase price allocation was based on an estimate of the fair market values of the tangible and intangible assets and liabilities related to Unisource. SpinCo has considered multiple factors in arriving at the estimated fair market values which were based on a preliminary and limited review of the assets and liabilities related to Unisource to be transferred. Following the effective date of the Transactions, SpinCo expects to complete the preliminary purchase price allocation after considering Unisource’s assets and liabilities at the level of detail necessary to finalize the required purchase price allocation. The final purchase price allocation may be different than that reflected in the pro forma purchase price allocation presented herein, and this difference may be material.
xpedx’s historical combined financial statements have been “carved-out” from International Paper’s consolidated financial statements and reflect assumptions and allocations made by International Paper. The xpedx historical combined financial statements include all revenues, costs, assets and liabilities that are directly attributable to xpedx. In addition, certain expenses reflected in xpedx’s combined financial statements are an allocation of corporate expenses from International Paper. Such expenses include, but are not limited to, centralized International Paper support functions including finance, legal, information technology, human resources, communications and insurance as well as stock-based compensation. These expenses have been allocated to xpedx on the basis of direct usage when identifiable, with the remainder principally allocated on the basis of percent of capital employed, headcount or other measures. The actual costs that may have been incurred if xpedx had been a stand-alone company would depend on a number of factors, including the chosen organizational structure and strategic decisions made as to information technology and infrastructure requirements. As such, xpedx’s combined financial statements do not necessarily reflect what xpedx’s financial condition and results of operations would have been had xpedx operated as a stand-alone company during the periods or at the date presented.
The unaudited pro forma condensed combined financial statements contain only adjustments that are factually supportable and directly attributable to the transaction and do not reflect the costs of any integration activities or benefits that may result from realization of future cost savings from operating efficiencies or revenue synergies expected to result from the Transactions.
 
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The unaudited pro forma condensed combined financial statements should be read in conjunction with:
 
 	•	 	the accompanying notes to the unaudited pro forma condensed combined financial statements;	
 
 	•	 	xpedx’s audited and unaudited historical condensed combined financial statements and related notes for the year ended December 31, 2013 and as of and for the three months ended March 31, 2014, respectively, which are included elsewhere in this prospectus; and	
 
 	•	 	Unisource’s audited and unaudited historical condensed consolidated financial statements and related notes for the year ended December 31, 2013 and as of and for the three months ended March 31, 2014, respectively, which are included elsewhere in this prospectus.	
The unaudited pro forma condensed combined financial statements are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of the combined company would have been had the Transactions occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position.
 
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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of March 31, 2014

 	  	Historical	 	  	Pro Forma
Adjustments
(Note 2)	 	 	 	  	Pro Forma
Condensed
Combined	 	
 	  	xpedx	 	  	Unisource	 	  			 		  			
 	  	(Dollars in millions)	 	
Assets	  				  				  				 		  				
Current assets:	  				  				  				 		  				
Cash and cash equivalents	  	$	7.3	  	  	$	29.5	  	  	$	(3.5	) 	 	A	  	$	33.3	  	
Accounts receivable, net	  	 	651.3	  	  	 	448.8	  	  	 	9.0	  	 	B,C	  	 	1,109.1	  	
Related-party receivable	  	 	12.8	  	  	 	3.3	  	  	 	(12.8	) 	 	B	  	 	3.3	  	
Inventories, net	  	 	356.3	  	  	 	308.8	  	  	 	41.9	  	 	D	  	 	707.0	  	
Deferred income tax assets	  	 	—  	  	  	 	10.2	  	  	 	(10.2	) 	 	E	  	 	—  	  	
Other current assets	  	 	25.8	  	  	 	46.1	  	  	 	—  	  	 		  	 	71.9	  	
Assets held for sale	  	 	8.7	  	  	 	—  	  	  	 	(8.7	) 	 	A	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total current assets	  	 	1,062.2	  	  	 	846.7	  	  	 	15.7	  	 		  	 	1,924.6	  	
Property and equipment, net	  	 	103.7	  	  	 	73.9	  	  	 	236.0	  	 	A,F	  	 	413.6	  	
Other non-current assets	  	 	8.7	  	  	 	12.1	  	  	 	16.5	  	 	G,H	  	 	37.3	  	
Goodwill	  	 	26.4	  	  	 	23.4	  	  	 	64.4	  	 	I	  	 	114.2	  	
Other intangibles, net	  	 	9.0	  	  	 	20.1	  	  	 	31.3	  	 	J	  	 	60.4	  	
Deferred income tax assets	  	 	21.9	  	  	 	210.9	  	  	 	(108.5	) 	 	E	  	 	124.3	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total assets	  	$	1,231.9	  	  	$	1,187.1	  	  	$	255.4	  	 		  	$	2,674.4	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Liabilities and Stockholders’ Equity	  				  				  				 		  				
Current liabilities:	  				  				  				 		  				
Accounts payable	  	 	364.0	  	  	 	261.7	  	  	 	37.4	  	 	B,K	  	 	663.1	  	
Related-party payable	  	 	2.3	  	  	 	7.9	  	  	 	(2.3	) 	 	B	  	 	7.9	  	
Accrued payroll and benefits	  	 	52.4	  	  	 	20.6	  	  	 	—  	  	 		  	 	73.0	  	
Deferred income tax liabilities	  	 	13.7	  	  	 	—  	  	  	 	8.2	  	 	E	  	 	21.9	  	
Other accrued liabilities	  	 	31.0	  	  	 	59.0	  	  	 	(5.4	) 	 	B,G,L,M	  	 	84.6	  	
Current maturities of long term debt	  	 	—  	  	  	 	2.6	  	  	 	—  	  	 		  	 	2.6	  	
Capital lease obligations to related party, current portion	  	 	—  	  	  	 	9.8	  	  	 	4.3	  	 	F	  	 	14.1	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total current liabilities	  	 	463.4	  	  	 	361.6	  	  	 	42.2	  	 		  	 	867.2	  	
						
Long term debt, net of current maturities	  	 	—  	  	  	 	292.5	  	  	 	436.0	  	 	G	  	 	728.5	  	
Capital lease obligations to related party, less current portion	  	 	—  	  	  	 	43.3	  	  	 	174.9	  	 	F	  	 	218.2	  	
Defined benefit pension obligations, net	  	 	—  	  	  	 	24.0	  	  	 	—  	  	 		  	 	24.0	  	
Other non-current liabilities	  	 	11.5	  	  	 	36.5	  	  	 	77.0	  	 	M,N	  	 	125.0	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total liabilities	  	 	474.9	  	  	 	757.9	  	  	 	730.1	  	 		  	 	1,962.9	  	
						
Stockholders’ equity	  	 	757.0	  	  	 	429.2	  	  	 	(474.7	) 	 	O	  	 	711.5	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
Total liabilities, redeemable preferred stock and stockholders’ equity	  	$	1,231.9	  	  	$	1,187.1	  	  	$	255.4	  	 		  	$	2,674.4	  	
	  	 	 	 	  	 	 	 	  	 	 	 	 		  	 	 	 	
See accompanying notes to the unaudited pro forma condensed combined financial statements
 
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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Three months ended March 31, 2014

 	  	Historical	 	 	Pro Forma
Adjustments
(Note 2)	 	 	 	  	Pro Forma
Condensed
Combined	 	
 	  	xpedx	 	 	Unisource	 	 			 		  			
 	  	(Dollars in millions, except per share data)	 	
Net sales	  	$	1,307.4	  	 	$	930.7	  	 	$	—  	  	 		  	$	2,238.1	  	
Cost of products sold	  	 	1,088.5	  	 	 	763.5	  	 	 	—  	  	 		  	 	1,852.0	  	
Distribution expenses	  	 	77.1	  	 	 	62.6	  	 	 	—  	  	 		  	 	139.7	  	
Selling and administrative expenses	  	 	128.6	  	 	 	94.6	  	 	 	(1.3	) 	 	Q,R	  	 	221.9	  	
Depreciation and amortization	  	 	4.6	  	 	 	6.1	  	 	 	3.1	  	 	R,S,T	  	 	13.8	  	
Restructuring charges	  	 	(0.2	) 	 	 	0.2	  	 	 	—  	  	 		  	 	—  	  	
Merger expenses	  	 	—  	  	 	 	7.9	  	 	 	(7.9	) 	 	U	  	 	—  	  	
Asset impairment	  	 	—  	  	 	 	—  	  	 	 	—  	  	 		  	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Operating income (loss)	  	 	8.8	  	 	 	(4.2	) 	 	 	6.1	  	 		  	 	10.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Other (income) expense, net	  	 	(0.5	) 	 	 	—  	  	 	 	—  	  	 		  	 	(0.5	) 	
Interest expense, net	  	 	—  	  	 	 	6.3	  	 	 	0.5	  	 	S,V	  	 	6.8	  	
Gain on sale of equity-method investments	  	 	—  	  	 	 	(6.6	) 	 	 	—  	  	 		  	 	(6.6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Income (loss) from continuing operations before income taxes	  	 	9.3	  	 	 	(3.9	) 	 	 	5.6	  	 		  	 	11.0	  	
Income tax provision (benefit)	  	 	3.7	  	 	 	(0.3	) 	 	 	(0.9	) 	 	W	  	 	2.5	  	
Equity earnings of affiliates, net of taxes	  	 	—  	  	 	 	(0.2	) 	 	 	—  	  	 		  	 	(0.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Income (loss) from continuing operations	  	$	5.6	  	 	$	(3.4	) 	 	$	6.5	  	 		  	$	8.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Pro forma earnings per share from continuing operations:	  				 				 				 		  				
Basic (a)	  				 				 				 		  	$	0.54	  	
Diluted (b)	  				 				 				 		  	$	0.54	  	
						
Pro forma weighted-average shares outstanding:	  				 				 				 		  				
Basic (a)	  				 				 				 		  	 	16,000,000	  	
Diluted (b)	  				 				 				 		  	 	16,000,000	  	

(a)	Pro forma basic earnings per share and pro forma weighted-average basic shares outstanding for the three months ended March 31, 2014 reflect the number of shares of SpinCo common stock that will be outstanding upon completion of the Transactions.	
(b)	Pro forma diluted earnings per share and pro forma weighted-average diluted shares outstanding reflect the estimated number of shares of common stock we expect to have outstanding upon completion of the Transactions and reflect the potential issuance of shares of common stock under SpinCo equity plans in which our employees will participate, based on the distribution ratio. While the actual dilutive impact in the future may differ from these estimates, we believe this estimate reflects a reasonable approximation of the dilutive impact of SpinCo equity plans.	
See accompanying notes to the unaudited pro forma condensed combined financial statements
 
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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year ended December 31, 2013

 	  	Historical	 	 	Pro Forma
Adjustments
(Note 2)	 	 	 	  	Pro Forma
Condensed
Combined	 	
 	  	xpedx	 	 	Unisource	 	 			 		  			
 	  	(Dollars in millions, except per share data)	 	
Net sales	  	$	5,652.4	  	 	$	4,089.1	  	 	$	—  	  	 		  	$	9,741.5	  	
Cost of products sold	  	 	4,736.8	  	 	 	3,370.4	  	 	 	1.5	  	 	P	  	 	8,108.7	  	
Distribution expenses	  	 	314.2	  	 	 	250.3	  	 	 	—  	  	 		  	 	564.5	  	
Selling and administrative expenses	  	 	548.2	  	 	 	391.3	  	 	 	(4.7	) 	 	Q,R	  	 	934.8	  	
Depreciation and amortization	  	 	17.1	  	 	 	25.1	  	 	 	10.9	  	 	R,S,T	  	 	53.1	  	
Restructuring charges	  	 	37.9	  	 	 	(3.4	) 	 	 	—  	  	 		  	 	34.5	  	
Merger expenses	  	 	—  	  	 	 	14.3	  	 	 	(14.3	) 	 	U	  	 	—  	  	
Asset impairment	  	 	—  	  	 	 	0.4	  	 	 	—  	  	 		  	 	0.4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Operating (loss) income	  	 	(1.8	) 	 	 	40.7	  	 	 	6.6	  	 		  	 	45.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Other (income) expense, net	  	 	(2.2	) 	 	 	0.5	  	 	 	—  	  	 		  	 	(1.7	) 	
Interest expense, net	  	 	—  	  	 	 	27.4	  	 	 	1.2	  	 	S,V	  	 	28.6	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Income from continuing operations before income taxes	  	 	0.4	  	 	 	12.8	  	 	 	5.4	  	 		  	 	18.6	  	
Income tax provision (benefit)	  	 	0.4	  	 	 	(228.5	) 	 	 	(3.5	) 	 	W	  	 	(231.6	) 	
Equity earnings of affiliates, net of taxes	  	 	—  	  	 	 	(1.1	) 	 	 	—  	  	 		  	 	(1.1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Income from continuing operations	  	$	(0.0	) 	 	$	242.4	  	 	$	8.9	  	 		  	$	251.3	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 		  	 	 	 	
Pro forma earnings per share from continuing operations:	  				 				 				 		  				
Basic (c)	  				 				 				 		  	$	15.71	  	
Diluted (d)	  				 				 				 		  	$	15.71	  	
						
Pro forma weighted-average shares outstanding:	  				 				 				 		  				
Basic (c)	  				 				 				 		  	 	16,000,000	  	
Diluted (d)	  				 				 				 		  	 	16,000,000	  	

(c)	Pro forma basic earnings per share and pro forma weighted-average basic shares outstanding for the year ended December 31, 2013 reflect the number of shares of SpinCo common stock that will be outstanding upon completion of the Transactions.	
(d)	Pro forma diluted earnings per share and pro forma weighted-average diluted shares outstanding reflect the estimated number of shares of common stock we expect to have outstanding upon completion of the Transactions and reflect the potential issuance of shares of common stock under SpinCo equity plans in which our employees will participate, based on the distribution ratio. While the actual dilutive impact in the future may differ from these estimates, we believe this estimate reflects a reasonable approximation of the dilutive impact of SpinCo equity plans.	
See accompanying notes to the unaudited pro forma condensed combined financial statements
 
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NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The accompanying unaudited pro forma condensed combined financial statements present the pro forma condensed combined financial position and results of operations of the combined company based upon the historical financial statements of each of xpedx and Unisource, after giving effect to the Transactions, including the pro forma adjustments described in these notes, and are intended to reflect the impact of the Transactions on xpedx’s combined financial statements. The accompanying unaudited pro forma condensed combined financial statements have been prepared using and should be read in conjunction with the respective audited combined or consolidated (as the case may be) financial statements of each of xpedx and Unisource for the fiscal year ended December 31, 2013 and the unaudited condensed combined or consolidated (as the case may be) financial statements of each xpedx and Unisource as of and for the three months ended March 31, 2014. The accompanying unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not reflect the costs of any integration activities or benefits that may result from realization of future cost savings due to operating efficiencies or revenue synergies expected to result from the Transactions. In addition, throughout the periods presented in the unaudited pro forma condensed combined financial statements, the operations of xpedx were conducted and accounted for as part of International Paper. xpedx’s audited condensed combined financial statements have been derived from International Paper’s historical accounting records and reflect significant allocations of direct costs and expenses. All of the allocations and estimates in such financial statements are based on assumptions that the management of xpedx believes are reasonable. xpedx’s financial statements do not necessarily represent the financial position of xpedx had it been operated as a separate independent entity.
The unaudited pro forma condensed combined statement of operations combines the historical condensed combined statements of operations of xpedx and the historical condensed consolidated statements of operations of Unisource for the three months ended March 31, 2014 and for the year ended December 31, 2013, to reflect the Transactions as if they had occurred at the beginning of fiscal 2013. The unaudited pro forma condensed combined balance sheet combines the historical condensed combined balance sheet of xpedx and the historical condensed consolidated balance sheet of Unisource as of March 31, 2014, giving effect to the Transactions including the adjustments described in these notes, as if they had been consummated on March 31, 2014.
The unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting with SpinCo considered the accounting acquirer of Unisource.
For purposes of the unaudited pro forma condensed combined financial statements, a global blended statutory tax rate of 39.0% has been used. This does not reflect the combined company’s expected effective tax rate, which will include other tax charges and benefits, and does not take into account any historical or possible future tax events that may impact the combined company.
Note 2. Pro Forma Adjustments
The unaudited pro forma condensed combined balance sheet has been adjusted to reflect the allocation of the preliminary estimated purchase price to identifiable assets to be acquired and liabilities to be assumed related to Unisource, with the excess recorded as goodwill. The preliminary purchase price allocation in these unaudited pro forma condensed combined financial statements is based upon an estimated purchase price of approximately $431.8 million. This amount was derived in accordance with the Merger Agreement, based on the business enterprise value of Unisource on March 31, 2014, less debt and debt-like items, as described further below and in Note 2 (O). The final purchase price will be based on the actual net tangible assets and intangible assets and liabilities that exist as of the date of completion of the Transactions. Accordingly, the pro forma purchase price adjustments are preliminary and are subject to further adjustments as additional information becomes available and as additional analyses are performed. Upon completion of the Transactions, final valuations will be performed. Increases or decreases in the fair value of relevant balance sheet amounts will result in adjustments to
 
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NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
 
the combined balance sheet and/or statement of operations. This could result in an increase or decrease to goodwill and materially impact the unaudited pro forma condensed combined financial statements.
The preliminary estimated purchase price is allocated as follows:

(Dollars in millions)	  	
Cash	  	$	 29.5	  	
Accounts receivable, net	  	 	448.8	  	
Related-party receivable	  	 	3.3	  	
Inventories	  	 	350.7	  	
Other current assets	  	 	46.1	  	
Property and equipment, net	  	 	325.0	  	
Goodwill	  	 	87.8	  	
Other intangibles	  	 	51.4	  	
Current and long term deferred income tax assets	  	 	96.7	  	
Other non-current assets	  	 	7.6	  	
Accounts payable	  	 	(261.7	) 	
Related party payable	  	 	(7.9	) 	
Accrued payroll and benefits	  	 	(20.6	) 	
Other accrued liabilities	  	 	(59.0	) 	
Current and long term equipment capital lease obligations	  	 	(10.0	) 	
Current and long term capital lease obligations to related party	  	 	(232.3	) 	
Canadian bank overdrafts	  	 	(22.2	) 	
Senior credit facility	  	 	(262.9	) 	
Defined benefit pension obligations	  	 	(24.0	) 	
Other non-current liabilities	  	 	(114.5	) 	
	  	 	 	 	
Total preliminary estimated purchase price allocation	  	$	431.8	  	
	  	 	 	 	
The unaudited pro forma condensed combined balance sheet reflects the following adjustments:
 
(A)	A decrease of $27.3 million to exclude xpedx cash and cash equivalents and the net book value of properties that will not transfer to the combined company. The adjustment impacted the following financial statement line items:	

(Dollars in millions)	  	
Cash and cash equivalents	  	$	(3.5	) 	
Assets held for sale	  	 	(8.7	) 	
Property and equipment, net	  	 	(15.1	) 	
	  	 	 	 	
Total	  	$	(27.3	) 	

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NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
 
(B)	A $7.7 million decrease in total assets and a $0.4 million increase in total liabilities as a result of the reorganization of non-U.S. xpedx legal entities necessary to facilitate the Transactions. As a result of the reorganization, these net assets and liabilities will not transfer to the combined company. The following table presents the composition of the net reduction to total assets and total liabilities:	

 	  	Pro forma
Adjustment	 	
(Dollars in millions)	 	
Accounts receivable, net	  	$	5.1	  	
Related-party receivable	  	 	(12.8	) 	
	  	 	 	 	
Total assets	  	$	(7.7	) 	
	  	 	 	 	
Accounts payable	  	$	2.3	  	
Related party payable	  	 	(2.3	) 	
Other accrued liabilities	  	 	0.4	  	
	  	 	 	 	
Total liabilities	  	$	(0.4	) 	

(C)	A $3.9 million increase in accounts receivable related to sales from xpedx to other businesses of International Paper that will be transferred to the combined company. This balance was historically accounted for through parent company investment and not settled in cash, but will be settled in cash following the Transactions.	
 
(D)	A $41.9 million increase in inventory to reflect the estimated fair value of Unisource’s inventory. Of this amount, $1.5 million relates to inventory that is not recorded using the last-in, first-out basis and will be amortized over one average inventory turn (approximately two months).	
 
(E)	Reflects a reduction to deferred income tax assets representing the net deferred income tax liability based on the global blended statutory tax rate of 39.0% multiplied by either (i) the fair value adjustments made to the assets to be acquired and liabilities to be assumed, excluding goodwill, or (ii) the applicable pro forma adjustments to related assets and liabilities that will not be assumed by the combined company included herein (Notes 2(L) and (M)). Additionally, the reduction to deferred income tax assets includes the portion of (i) Unisource pre-Transactions net operating losses that will expire unutilized as a result of certain anticipated limitations associated with a change in ownership. The adjustment was calculated as follows:	

(Dollars in millions)	  	 	 	
Current portion of deferred income tax assets:	  				
Inventory fair value adjustment	  	$	41.9	  	
Severance and accrued compensation liabilities that will not be assumed	  	 	2.0	  	
Restructuring liabilities that will not be assumed	  	 	3.2	  	
	  	 	 	 	
Total	  	 	47.1	  	
Statutory tax rate	  	 	39.0	% 	
	  	 	 	 	
Adjustment to deferred income taxes	  	 	18.4	  	
Reclassification of current deferred income tax assets	  	 	(10.2	) 	
	  	 	 	 	
Increase to current deferred income tax liabilities	  	$	8.2	  	
	  	 	 	 	
Non-current portion of deferred income tax asset:	  				
Property and equipment fair value adjustment	  	$	251.1	  	
Capital lease obligations fair value adjustment	  	 	(179.2	) 	
Intangible assets fair value adjustment	  	 	31.3	  	
Investment in joint venture fair value adjustment	  	 	4.7	  	
Restructuring liabilities that will not be assumed	  	 	1.0	  	
	  	 	 	 	
Total	  	 	108.9	  	
Statutory tax rate	  	 	39.0	% 	
	  	 	 	 	
Reduction to non-current deferred income tax asset before tax attributes	  	 	(42.5	) 	
Unisource federal net operating losses expected to expire unutilized, net of tax	  	 	(66.0	) 	
	  	 	 	 	
Reduction to non-current deferred income tax asset	  	$	(108.5	) 	

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NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
 
(F)	A $251.1 million increase in property and equipment to reflect the estimated fair value of Unisource’s property and equipment. For purposes of determining the impact on the unaudited pro forma condensed combined statements of operations, the fair value of property and equipment is being depreciated over the estimated useful lives summarized in the table below:	

 	  	Estimated
Useful
Life (years)	 	
Building and site improvements	  	 	5 to 33	  	
Leasehold improvements	  	 	9	  	
Machinery and equipment	  	 	3 to 7	  	
Internal-use software	  	 	5	  	
The above increase in property and equipment includes an increase of $210.3 million associated with land and buildings that were sold and subsequently leased back by Unisource in 2002. These properties continue to be reported as part of Unisource’s property and equipment and have been adjusted to fair value in purchase accounting due to Unisource’s continued involvement with the properties.
There is a corresponding increase in capital lease obligations to related party of $179.2 million to reflect the estimated fair value of such obligations. Total current and long term capital lease obligations to related party of $232.3 million is comprised of the fair value of the remaining lease payments of $60.5 million and the fair value of a non-monetary obligation of $171.8 million due at the end of the lease term (June 2018). The following table summarizes the financial statement impact:

 	  	Reported	 	  	Pro forma
Adjustment	 	  	Pro Forma
Condensed
Combined	 	
 	  	(Dollars in millions)	 	
Capital lease obligations to related party, current portion	  	$	9.8	  	  	$	4.3	  	  	$	14.1	  	
Capital lease obligations to related party, less current portion	  	 	43.3	  	  	 	174.9	  	  	 	218.2	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total capital lease obligations to related party	  	$	53.1	  	  	$	179.2	  	  	$	232.3	  	

(G)	In connection with the Transactions, the combined company will enter into a new five year asset-based revolving credit facility that provides for borrowings of up to $1,400.0 million. Long-term debt under the new revolving credit facility is expected to approximate $698.9 million, which includes the refinancing of Unisource’s existing senior credit facility of $262.9 million. Pro forma adjustments related to the new revolving credit facility are comprised of the following:	
 
 	a.	A $436.0 million increase in long term debt for (i) $400.0 million special payment to International Paper, subject to the working capital and net indebtedness adjustments; (ii) $21.0 million in deferred financing costs and (ii) $15.0 million of Unisource transaction fees associated with the Transactions.	
 
 	b.	An $11.8 million increase in other non-current assets consisting of deferred financing costs of $21.0 million, partially offset by the removal of Unisource’s existing deferred financing costs of $9.2 million.	
 
 	c.	A $0.6 million decrease to other accrued liabilities for the removal of accrued interest relating to Unisource existing debt.	
 
(H)	A $4.7 million increase in other non-current assets to reflect the estimated fair value of Unisource’s investment in joint ventures acquired.	
 
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NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
 
(I)	A $64.4 million increase to goodwill consisting of the elimination of $23.4 million of existing Unisource goodwill and recording preliminary estimated goodwill of $87.8 million attributable to the Transactions. The goodwill resulting from the Transactions is not expected to be deductible for tax purposes.	
 
(J)	A $31.3 million increase to other intangibles consisting of the elimination of $20.1 million of existing Unisource intangible assets and recording of $51.4 million for the estimated fair value of identifiable intangible assets attributable to the Transactions. The estimated other intangibles attributable to the Transactions are comprised of the following:	

 	  	Amount	 	 	Annual
Amortization
Expense	 	 	Quarterly
Amortization
Expense	 	 	Remaining Useful
Life (years)	
 	  	(Dollars in millions)	 	 	 	
Customer relationships	  	$	41.5	  	 	$	3.0	  	 	$	0.8	  	 	14	
Trademarks / trade names	  	 	8.8	  	 	 	4.4	  	 	 	1.1	  	 	2	
Non-competition agreements	  	 	3.0	  	 	 	3.0	  	 	 	0.8	  	 	1	
Above market leasehold interests	  	 	(1.9	) 	 	 	(0.2	) 	 	 	(0.0	) 	 	9	
	  	 	 	 	 	 	 	 	 	 	 	 	 		
	  	$	51.4	  	 	$	10.2	  	 	$	2.7	  	 		

(K)	A $35.1 million increase in accounts payable related to purchases by xpedx from other businesses of International Paper that will be assumed by the combined company. Historically, this balance was accounted for through parent company investment and not settled in cash, but will be settled in cash following the Transactions.	
 
(L)	A $2.0 million decrease in other accrued liabilities related to certain xpedx severance and accrued compensation liabilities that will not be assumed by the combined company.	
 
(M)	A $3.2 million decrease in other accrued liabilities and a $1.0 million decrease in other non-current liabilities to exclude certain xpedx restructuring liabilities that will not be assumed by the combined company.	
 
(N)	A $78.0 million increase in other non-current liabilities related to the estimated fair value of the obligation resulting from the expected utilization of Unisource pre-Transactions net operating losses, as described in the Tax Receivable Agreement. The actual amount that the combined company may be obligated to pay under this arrangement could vary depending upon the utilization of Unisource’s pre-Transactions net operating losses, which may not be resolved for several years.	
 
(O)	Stockholders’ equity has been adjusted for the following:	
 
 	a.	Adjustment to reflect Transactions consideration for Unisource, calculated as follows:	

(Dollars in millions)	  	
Business Enterprise Value (i)	  	$	718.7	  	
Less: Debt and debt-like items (ii)	  	 	(286.9	) 	
	  	 	 	 	
Preliminary purchase price	  	$	431.8	  	

 	i.	Business Enterprise Value was estimated as of March 31, 2014. This value is inclusive of Unisource cash of $29.5 million.	
 
 	ii.	Debt and debt-like items include long-term debt of $262.9 million, as described in Note 2(G), and defined benefit pension obligations of $24.0 million.	
 
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NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
 
 	b.	Elimination of Unisource’s (i) additional paid in capital of $494.5 million, (ii) accumulated deficit of $(66.8) million and (iii) accumulated other comprehensive income, net of tax of $1.5 million.	
 
 	c.	A $414.4 million decrease to equity for debt related items described in Note 2(G) comprised of (i) a $400.0 million special payment to International Paper, subject to the working capital and net indebtedness adjustments and (ii) $15.0 million of Unisource transaction fees associated with the Transactions. These decreases to equity are partially offset by an increase of $0.6 million for the removal of accrued interest related to Unisource existing debt.	
 
 	d.	Removal of assets and liabilities described in Notes 2(A), (B), (L) and (M).	
 
 	e.	Assumption of assets and liabilities described in Notes 2(C) and (K).	
 
 	f.	Assumption of deferred tax liabilities unrelated to fair value adjustments described in Note 2(E).	
The unaudited pro forma condensed combined statements of operations reflect the following adjustments:
 
(P)	A $1.5 million increase to cost of products sold for the year ended December 31, 2013 related to the step-up in fair value of UWWH’s inventory that is not recorded using the last-in, first-out basis and will be amortized over one average inventory turn (approximately two months).	
 
(Q)	A $1.1 million and $4.4 million decrease in selling and administrative expenses for the three months ended March 31, 2014 and for the year ended December 31, 2013, respectively, to remove advisory fees paid to Bain Capital by UWWH in conjunction with the Transactions as these fees will be terminated.	
 
(R)	A $0.3 million and $0.5 million decrease in costs for the three months ended March 31, 2014 and for the year ended December 31, 2013, respectively, related to facilities historically shared by International Paper and xpedx, as lease agreements have been entered into between International Paper and the combined company for these shared properties in connection with the Transactions. The adjustment impacted the following financial statement line items:	

 	  	Three Months ended
March 31, 2014	 	 	Year ended
December 31, 2013	 	
 	  	(Dollars in millions)	 	
Selling and administrative expense	  	$	(0.2	) 	 	$	(0.3	) 	
Depreciation and amortization	  	 	(0.1	) 	 	 	(0.2	) 	
	  	 	 	 	 	 	 	 	
Total	  	$	(0.3	) 	 	$	(0.5	) 	

(S)	A $1.3 million and $4.1 million increase in depreciation expense for the three months ended March 31, 2014 and for the year ended December 31, 2013, respectively, as a result of the increase in the value of the Unisource property and equipment, as described in Note 2(F). In addition, interest expense reflects a decrease of $0.4 and $1.6 million for the three months ended March 31, 2014 and for the year ended December 31, 2013, respectively. The decrease is attributable to accretion of the fair value step-up of Unisource capital lease obligations to related party, as described in Note 2(F).	
 
(T)	A $1.9 and $7.0 million increase in amortization expense for the three months ended March 31, 2014 and for the year ended December 31, 2013, respectively, resulting from adjustments to Unisource intangible assets, as described in Note 2(J).	
 
(U)	A $7.9 and $14.3 million decrease in merger expenses for the three months ended March 31, 2014 and for the year ended December 31, 2013, respectively, related to the removal of direct, incremental costs directly related to the Transactions reflected in the historical financial statements of Unisource as the combined company will not continue to incur this expense subsequent to the closing of the Transactions. These costs primarily consist of professional and legal fees and are not deductible for tax purposes.	
 
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NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
 
(V)	A $0.9 and $2.8 million increase in interest expense for the three months ended March 31, 2014 and for the year ended December 31, 2013, respectively, resulting from the terms of, and expected borrowings under, the new asset-based revolving credit facility, as described in Note 2(G). Under the terms of the debt commitment letter, interest expense will be either base rate plus up to 1.75% or LIBOR plus up to 2.75%, in each case, depending on the level of borrowings under the facility. Pro forma adjusted interest expense is calculated based on average one month LIBOR for the three months ended March 31, 2014 of 0.16% and for the year ended December 31, 2013 of 0.19%, plus an additional rate of 2.75% for the first $60 million of expected borrowings and 1.50% for the expected borrowings in excess of $60 million, consistent with the terms of the commitment letter. The applicable additional rate, under the terms of the debt commitment letter may vary depending on the level of borrowings under the facility. As of March 31, 2014 and after giving effect to the Transactions, assuming $698.9 million was drawn under the asset-based revolving credit facility, each 0.125 percentage point change in interest rates would result in approximately a $0.9 million change in our annual interest expense	
 
(W)	For purposes of these unaudited pro forma condensed combined financial statements, a global blended statutory tax rate of 39.0% has been used.	
Note 3. Items Not Included
The following expected material nonrecurring charges related to the Transactions and all related transactions are not included or provided for in the unaudited pro forma condensed combined statements of operations:
 
 	•	 	$15.0 million of Unisource transaction fees associated with the Transactions that are expected to be paid with debt proceeds subsequent to March 31, 2014.	
 
 	•	 	Certain costs associated with the Transition Services Agreement, intercompany arrangements and supply agreements pursuant to the Contribution and Distribution Agreement, and professional fees, consultants, information technology implementation, relocation and severance which may be incurred in connection with the integration of xpedx and Unisource. These items may have an impact on the statement of operations, but as they are currently being negotiated such amounts are not currently estimable or factually supportable.	
The unaudited pro forma condensed combined financial statements do not reflect the settlement of xpedx net working capital and net indebtedness adjustments, Unisource net working capital and net indebtedness adjustments, Unisource transaction fees associated with the Transactions in excess of $15.0 million and shared expenses associated with the Transactions as such costs are not currently estimable or factually supportable.
The unaudited pro forma condensed combined financial statements do not reflect certain obligations under employment, retention and other similar agreements of approximately $30 million that may be payable by SpinCo to certain Unisource employees as a result of the Transactions.
The unaudited pro forma condensed combined financial statements do not reflect the increased costs of being a separate public company.
The unaudited pro forma condensed combined financial statements also do not reflect benefits that may result from the realization of cost synergies expected to be realized as a result of the Transactions.
The unaudited pro forma condensed combined financial statements do not reflect the potential impact of post-Transactions compensation and benefit structure changes of the combined company as these costs have not yet been finalized.
The unaudited pro forma condensed combined financial statements do not reflect the impact of a potential earnout payment of up to $100 million that the combined company may be required to pay International Paper if the combined company’s aggregate EBITDA exceeds an agreed-upon target.
 
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 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF XPEDX
You should read the following discussion of xpedx’s results of operations and financial condition together with xpedx’s selected historical combined financial data, audited historical combined financial statements and the notes thereto and unaudited condensed combined financial statements and notes thereto included in this prospectus as well as the discussion in the section of this prospectus entitled “Business of xpedx.” This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections of this prospectus entitled “Risk Factors” and “Note Regarding Forward-Looking Statements and Information.” The financial data presented in Management’s Discussion and Analysis of Financial Condition and Results of Operations of xpedx has been adjusted to reflect the restatement of xpedx’s Combined Balance Sheets as of December 31, 2013 and 2012 and Combined Statements of Cash Flows and Changes in Parent Company Equity for each of the three years ended December 31, 2013. The restatement is more fully described in Note 15 to the combined financial statements of xpedx included elsewhere in this prospectus. The restatement had no impact on xpedx’s Combined Statement of Operations and Comprehensive Income. The financial information discussed below and included in this prospectus may not necessarily reflect what our financial condition, results of operations or cash flow would have been had we been a stand-alone company during the periods presented or what our financial condition, results of operations and cash flows may be in the future. Except as otherwise indicated or unless the context otherwise requires, the information included in this discussion and analysis assumes the completion of the Transactions.
Overview
xpedx’s Business
xpedx is a business-to-business distributor of paper, packaging, and facility supplies products in North America operating 86 distribution centers in the U.S. and Mexico as of December 31, 2013. xpedx distributes products and services to a number of customer markets including printers, publishers, data centers, manufacturers, higher education institutions, healthcare facilities, sporting and performance arenas, retail, government agencies, property managers and building service contractors, with no single customer accounting for more than 5% of our net sales in 2013. For the year ended December 31, 2013, we had net sales of $5,652.4 million, 97.5% of which was derived from our U.S. customers.
The xpedx business is organized into three reportable business segments—Print, Packaging and Facility Solutions. The following summary describes the products and services offered in each of the segments:
 
 	•	 	Print: The Print segment includes the sale and distribution of printing and communication papers, publishing papers, digital papers, specialty papers, graphics consumables, wide format papers, graphics equipment and related equipment installation and service. Within this segment, xpedx also operates the Bulkley Dunton Publishing Group (“Bulkley Dunton”), which focuses on the sale of coated and uncoated commercial printing and specialty papers to printers, converters, publishers, retailers and specialty businesses for use in magazines, catalogs, books, directories, gaming, couponing and retail inserts and direct mail. Products sold by Bulkley Dunton are predominately shipped directly from the manufacturer to the customer.	
 
 	•	 	Packaging: The Packaging segment includes the design, sourcing, sale and distribution of customized packaging and packaging equipment and the sale and distribution of custom and standard corrugated boxes, shrink and stretch films, tape, strapping, cushioning, labels, bags, mailers, molded fiber, bio-polymer and plastics and packaging equipment and related equipment installation and service. This segment also includes fulfillment and contract packaging services.	
 
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 	•	 	Facility Solutions: The Facility Solutions segment includes the sale and distribution of products necessary to maintain large public facilities, including hand towel and bathroom tissue, cleaning chemicals, disinfectants, skin care products, safety and hazard products, trash bags and receptacles, sanitary maintenance supplies, facilities maintenance equipment and related equipment installation and service. These products are sold to customers for use in their own facilities and for re-distribution.	
Industry Considerations
The paper, packaging and facility supplies distribution industry is highly competitive, with numerous regional and local competitors, and is a mature industry characterized by slowing or, in the case of paper, declining net sales growth. xpedx’s principal competitors include regional, local and national distributors, national and regional manufacturers, independent brokers and both catalog based and online business-to-business suppliers. Most of these competitors generally offer a wide range of products at prices comparable to those xpedx offers, though at varying service levels. Additionally, new competition could arise from non-traditional sources, group purchasing organizations, e-commerce, discount wholesalers, or consolidation among competitors. xpedx believes it offers the full range of services required to effectively compete, but if new competitive sources appear it may result in margin erosion or make it more difficult to attract and retain customers.
The following summary briefly describes the key competitive landscape for each of our business segments:
 
 	•	 	Print:  Industry sources estimate that there are hundreds of regional and local companies engaged in the marketing and distribution of paper and graphics products. While we believe there are few national distributors of paper and graphics products similar to xpedx, several regional and local distributors have cooperated together to serve customers nationally. xpedx’s customers also have the opportunity to purchase product directly from paper and graphics manufacturers, including International Paper. In addition, competitors also include regional and local specialty distributors, office supply and big box stores, independent brokers and large commercial printers that broker the sale of paper in connection with the sale of their printing services.	
 
 	•	 	Packaging:  The packaging market is fragmented consisting of competition from national and regional packaging distributors, national and regional manufacturers of packaging materials, independent brokers, and both catalog based and online business-to-business suppliers. We believe there are few national packaging distributors with substrate neutral design capabilities similar to xpedx’s capability.	
 
 	•	 	Facility Solutions: There are few national but numerous regional and local distributors of facility supplies. Several groups of distributors have created strategic alliances among multiple distributors to provide broader geographic coverage for larger customers. Other key competitors include the business-to-business divisions of big box stores, purchasing group affiliates, and both catalog based and online business-to-business suppliers.	
Separation of xpedx from International Paper
We have entered into the Contribution and Distribution Agreement and several other agreements with International Paper related to the spin-off. These agreements will govern the relationship between us and International Paper after completion of the spin-off and provide for the allocation between us and International Paper of various assets, liabilities, rights and obligations (including employee benefits, insurance and tax-related assets and liabilities). These agreements will also include arrangements for transition services to be provided by International Paper to SpinCo and vice versa. See “The Contribution and Distribution Agreement and the Ancillary Agreements.” To complete the spin-off, International Paper will distribute to its shareholders all of the shares of SpinCo common stock outstanding immediately prior to the Merger.
Under the terms of the Merger Agreement, immediately following the Distribution, UWWH will merge with and into SpinCo, with SpinCo continuing as the surviving corporation, and xpedx Intermediate will merge with
 
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and into UWW, with UWW surviving the merger as a wholly-owned subsidiary of SpinCo. As a result of the Merger, the UWWH Stockholder will receive a number of shares of SpinCo common stock for each share of UWWH common stock that it holds at the time of the Merger in a private placement transaction, such that International Paper’s shareholders will hold approximately 51%, and the UWWH Stockholder will hold 49%, of the common stock of SpinCo on a fully-diluted basis immediately following the Merger.
SpinCo will be the accounting acquiror in the Merger. Accordingly, SpinCo will apply acquisition accounting to the assets acquired and liabilities assumed of Unisource upon consummation of the Merger. See “The Transactions—Accounting Treatment and Considerations.”
Key Performance Measures
Operating income and free cash flow are the primary financial performance measures xpedx uses to manage its businesses and monitor results of operations. Operating income is used by xpedx to manage performance as it is a comprehensive measure reflecting both growth and efficiency. Free cash flow (cash provided by operations less cash invested in capital projects) is used by xpedx as it is a measure that reflects the effectiveness of managing working capital together with operating earnings and the business’ ability to fund capital requirements. xpedx supplements these primary financial performance measures with Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, cash and non-cash restructuring, stock-based compensation expense, LIFO (income) expense, severance charges, income (loss) from discontinued operations, net of income taxes and certain other costs) because xpedx believes investors commonly use Adjusted EBITDA as a key financial metric for valuing companies such as xpedx. In addition, the credit agreement governing the combined company’s ABL Facility will permit the combined company to exclude these and other charges and expenses in calculating “Consolidated EBITDA” pursuant to such credit agreement. Free cash flow and Adjusted EBITDA are considered by the Securities and Exchange Commission (“SEC”) as non-GAAP financial measures, and are not alternatives to net income, operating income or any other measure prescribed by U.S. generally accepted accounting principles (“GAAP”).
Net Sales Trends : Net sales for the three months ended March 31, 2014 decreased by $81.0 million, or 5.8%, compared to the three months ended March 31, 2013. During the last five years total net sales have declined $785.5 million, or 12.2%, from $6,437.9 during the year ended December 31, 2009 to $5,652.4 during the year ended December 31, 2013. This net sales decline was primarily due to weak economic conditions beginning in 2008 in conjunction with a slow overall economic recovery, sales losses associated with the restructuring of certain of our businesses and, to a lesser extent, the disruption caused by the organizational and other operational changes implemented beginning in 2011 to right-size our organization. Falling demand in the print market was also a cause of lower net sales to customers within the print market, which management defines as companies involved in printing, publishing, packaging with converted paper products and advertising agencies. Net sales to print segment customers were approximately 57.0% of our net sales in 2013.
Operating Income Trends : Total operating income for the three months ended March 31, 2014 increased by $11.7 million, or 403.4%, compared to the three months ended March 31, 2013. Our total operating margin was 0.7% for the three months ended March 31, 2014 and (0.2)% for the three months ended March 31, 2013. The increase in operating income is primarily attributable to reductions in selling and administrative expenses and decreased restructuring expenses. These increases to operating income are partially offset by the decline in revenue as a result of the deterioration of the print market. Total operating income for the year ended December 31, 2013 decreased by $23.4 million, or 108.3%, compared to the year ended December 31, 2012. Our total operating margin was 0.0% for the year ended December 31, 2013 and 0.4% for the year ended December 31, 2012. For the year ended December 31, 2012, our total operating income was $21.6 million, a decrease of 58.1% from $51.5 million for the year ended December 31, 2011. Our total operating margin was 0.4% for the year ended December 31, 2012 compared to 0.8% for the year ended December 31, 2011. The decrease in operating income throughout these periods was primarily due to a decline in revenue as a result of the deterioration of the print market, partially offset by reductions in selling and administrative expenses. xpedx measures the print market by using monthly flash reports provided by the Pulp and Paper Products Council that depict North
 
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American Printing and Writing Paper Statistics. Based on these reports, volume within the print market increased by 3.5% from 2009-2010, decreased by 5.5% from 2010-2011, decreased by 6.4% from 2011-2012, decreased by 1.6% from 2012-2013 and decreased by 3.8% for the three months ended March 31, 2014 compared to the three months ended March 31, 2013.
Free Cash Flow Trends : xpedx generated free cash flow of approximately $42.4 million, $42.7 million and $90.3 million in 2013, 2012 and 2011, respectively, and $34.2 million and $42.7 million during the three months ended March 2014 and 2013, respectively. The decrease from the three months ended March 2013 to the three months ended March 2014 was primarily attributable to a $11.4 million decrease in cash provided by operations, partially offset by a decrease in cash invested in capital projects of $2.9 million. The decrease from 2012 to 2013 was primarily attributable to a $3.8 million decrease in cash provided by operations, partially offset by a decrease in cash invested in capital projects of $3.5 million. The decrease from 2011 to 2012 was primarily due to $51.7 million of less cash generated by operations, partially offset by a reduction in investments in capital projects of $4.1 million.
The following table presents a reconciliation of free cash flow from cash provided by operations determined in accordance with GAAP:

 	  	Three Months Ended March 31,	 	 	Year Ended December 31,	 	
 	  	    2014    	 	 	    2013    	 	 	2013	 	 	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
Cash provided by operations	  	$	35.2	  	 	$	46.6	  	 	$	52.2	  	 	$	56.0	  	 	$	107.7	  	
Less: Cash invested in capital projects	  	 	(1.0	) 	 	 	(3.9	) 	 	 	(9.8	) 	 	 	(13.3	) 	 	 	(17.4	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Free cash flow	  	$	34.2	  	 	$	42.7	  	 	$	42.4	  	 	$	42.7	  	 	$	90.3	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Free cash flow has limitations as an analytical tool, and you should not consider it in isolation or as substitutes for analysis of our results as reported under GAAP. Other companies in xpedx’s industry may calculate free cash flow differently than xpedx does, limiting its usefulness as a comparative measure. Because of these limitations, free cash flow should not be considered as a measure of discretionary cash available to xpedx to invest in the growth of its business.
Adjusted EBITDA : During 2013, 2012 and 2011, Adjusted EBITDA margin was approximately 1.3%, 1.5% and 1.9%, respectively, and 1.0% and 0.9% during the three months ended March 2014 and 2013, respectively. The increase from the three months ended March 2013 to the three months ended March 2014 was primarily attributable to a decrease in selling and administrative expenses as a percentage of sales from 10.0% to 9.8%. The decrease from 2012 to 2013 was primarily attributable to an increase in distribution expense as a percentage of sales from 5.4% to 5.6%. The decrease in Adjusted EBITDA margin from 2011 to 2012 was primarily due to (i) an increase in selling and administrative expenses as a percentage of sales from 9.2% to 9.7% and (ii) an increase in distribution expense as a percentage of sales from 5.0% to 5.4%. See “Summary Historical Combined Financial Data of xpedx” for a reconciliation of Adjusted EBITDA from net income determined in accordance with GAAP.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as substitutes for analysis of xpedx’s results as reported under GAAP. For example, Adjusted EBITDA:
 
 	•	 	does not reflect xpedx’s income tax expenses or the cash requirements to pay its taxes; and	
 
 	•	 	although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and the foregoing metrics do not reflect any cash requirements for such replacements.	
Other companies in xpedx’s industry may calculate Adjusted EBITDA differently than xpedx does, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered as a
 
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measure of discretionary cash available to xpedx to invest in the growth of its business. xpedx compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA for supplemental purposes. Additionally, Adjusted EBITDA is not an alternative measure of financial performance under GAAP and therefore should be considered in conjunction with net income and other performance measures such as operating income or net cash provided by operating activities and not as an alternative to such GAAP measures.
Results of Operations, Including Business Segments
Overview
The combined financial statements of xpedx reflect the historical financial position, results of operations, changes in parent company equity and cash flows of xpedx for the periods presented, as xpedx was historically managed within International Paper. These statements have been prepared on a “carve-out” basis and are derived from the consolidated financial statements and accounting records of International Paper. xpedx’s combined financial statements may not be indicative of our future performance and do not necessarily reflect what the results of operations, financial position and cash flows would have been had it operated as an independent company during the periods presented.
The combined financial statements include expense allocations for certain functions provided by International Paper, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, insurance, and stock-based compensation. These expenses have been allocated to xpedx on the basis of direct usage when identifiable, with the remainder principally allocated on the basis of percent of capital employed, headcount or other measures. Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided or the benefit received by xpedx during the periods presented. The allocations may not, however, reflect the expenses xpedx would have incurred as an independent company for the periods presented. Actual costs that may have been incurred if xpedx had been a stand-alone company would depend on a number of factors, including, the organizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure. We are unable to determine what such costs would have been had xpedx been independent.
Comparison of Results of Operations for the Three Months Ended March 31, 2014 and March 31, 2013
The following discussion compares the combined operating results of xpedx for the three months ended March 31, 2014 and 2013.

 	  	Three Months Ended March 31,	 	
 	  	2014	 	 	2013	 	 	Increase (Decrease)	 	
 	  	(Dollars in millions)	 	 	$	 	 	%	 	
Net sales	  	$	1,307.4	  	 	$	1,388.4	  	 	$	(81.0	) 	 	 	(5.8	%) 	
Cost of products sold (exclusive of depreciation and amortization shown separately below)	  	 	1,088.5	  	 	 	1,159.3	  	 	 	(70.8	) 	 	 	(6.1	%) 	
Distribution expenses	  	 	77.1	  	 	 	81.5	  	 	 	(4.4	) 	 	 	(5.4	%) 	
Selling and administrative expenses	  	 	128.6	  	 	 	139.1	  	 	 	(10.5	) 	 	 	(7.5	%) 	
Depreciation and amortization	  	 	4.6	  	 	 	4.3	  	 	 	0.3	  	 	 	7.0	% 	
Restructuring charges	  	 	(0.2	) 	 	 	7.1	  	 	 	(7.3	) 	 	 	(102.8	%) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	  	 	8.8	  	 	 	(2.9	) 	 	 	11.7	  	 	 	(403.4	%) 	
Other (income) expense, net	  	 	(0.5	) 	 	 	(1.5	) 	 	 	1.0	  	 	 	(66.7	%) 	
Income tax provision (benefit)	  	 	3.7	  	 	 	(0.5	) 	 	 	4.2	  	 	 	(840.0	%) 	
(Loss) income from discontinued operations, net of income taxes	  	 	(0.1	) 	 	 	0.2	  	 	 	(0.3	) 	 	 	(150.0	%) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	5.5	  	 	$	(0.7	) 	 	$	6.2	  	 	 	(885.7	%) 	

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Net Sales : For the three months ended March 31, 2014, net sales of $1,307.4 million decreased $81.0 million, or 5.8%, compared to the three months ended March 31, 2013. Net sales declined primarily due to decreases of $60.0 and $27.0 million in our Print and Facility Solutions segments, respectively, which are further discussed in the section “Industry Segment Results”.
Cost of Products Sold (Exclusive of Depreciation and Amortization) : For the three months ended March 31, 2014, cost of products sold of $1,088.5 million decreased $70.8 million, or 6.1%, compared to the three months ended March 31, 2013. The decrease in cost of products sold outpaced the decline in sales primarily due to the increase in Packaging sales as Packaging sales have a lower product cost than other segments, as evidenced by the higher operating margin of 3.6% for Packaging during the three months ended March 31, 2014 compared to Print operating margin of 0.9% and Facility Solutions operating margin of (5.6)% during the same period. Segment operating margin is further discussed in the section “Industry Segment Results”.
Distribution Expenses : For the three months ended March 31, 2014, total distribution expenses of $77.1 million decreased by $4.4 million, or 5.4%, compared to the three months ended March 31, 2013, primarily due to decreased freight and fuel costs of $4.0 million primarily attributable to the decrease in sales and reduced fuel prices. As a percentage of net sales, distribution expense remained consistent and approximated 5.9% for both the three months ended March 31, 2013 and the same period in 2014.
Selling and Administrative Expenses : For the three months ended March 31, 2014, selling and administrative expenses of $128.6 million decreased by $10.5 million, or 7.5%, compared to the three months ended March 31, 2013, primarily due to (i) lower allocated expenses from International Paper of $6.3 million, (ii) a decrease in salaries, wages and benefits of $4.0 million as a result of a management initiative to restructure the organization enabling the reduction in headcount, (iii) a decrease in travel and entertainment expenses of $1.3 million attributable to management’s initiative to reduce non-critical travel and entertainment expenses and (iv) lower commissions of $0.8 million associated with decreased volume. These decreases are partially offset by a $1.6 million increase related to the centralization of design centers, packaging equipment and graphic specialists during 2014. As a percentage of net sales, selling and administrative expenses decreased from 10.0% for the three months ended March 31, 2013 to 9.8% for the three months ended March 31, 2014 due to a 0.2% decrease in salaries, wages and benefits as a percentage of net sales primarily attributable to a management initiative to restructure the organization.
Restructuring Charges : During 2010, xpedx completed a strategic assessment of its operating model, resulting in the decision to undertake a multi-year restructuring plan. The restructuring plan involved the establishment of a lower cost operating model in conjunction with the repositioning of the Print segment in consideration of changing market conditions. The restructuring plan included initiatives to (i) optimize the warehouse network, (ii) improve the efficiency of the sales team and (iii) reorganize the procurement function. Restructuring charges for the three months ended March 31, 2014 are primarily comprised of a gain on sale of fixed assets of $0.5 million, partially offset by closure costs to bring the facility to saleable condition of $0.2 million and personnel costs of $0.1 million.
For the three months ended March 31, 2014, restructuring charges of $(0.2) million decreased by $7.3 million, or 102.8%, compared to the three months ended March 31, 2013 primarily due to decreases in the following (i) severance costs of $5.7 million, (ii) facility closure costs of $2.5 million and (iii) project personnel costs of $3.1 million. These costs decreases are partially offset by a decrease of $4.7 million from gains on the sale of fixed assets disposed as part of the restructuring activities.
Income Taxes: The effective tax rate for the three months ended March 31, 2014 increased to 39.8% from 35.7% for the three months ended March 31, 2013 primarily as a result of differences in jurisdictional pre-tax income (loss).
 
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Comparison of Results of Operations for the Years Ended December 31, 2013 and 2012
The following discussion compares the combined operating results of xpedx for the years ended December 31, 2013 and 2012.

 	  	Year Ended December 31,	 	
 	  	2013	 	 	2012	 	 	Increase
(Decrease)	 	
 	  	(Dollars in millions)	 	 	$	 	 	%	 	
Net sales	  	$	5,652.4	  	 	$	6,012.0	  	 	 	(359.6	) 	 	 	(6.0	) 	
Cost of products sold (exclusive of depreciation and amortization shown separately below)	  	 	4,736.8	  	 	 	5,036.7	  	 	 	(299.9	) 	 	 	(6.0	) 	
Distribution expenses	  	 	314.2	  	 	 	324.0	  	 	 	(9.8	) 	 	 	(3.0	) 	
Selling and administrative expenses	  	 	548.2	  	 	 	580.6	  	 	 	(32.4	) 	 	 	(5.6	) 	
Depreciation and amortization	  	 	17.1	  	 	 	14.0	  	 	 	3.1	  	 	 	22.1	  	
Restructuring charges	  	 	37.9	  	 	 	35.1	  	 	 	2.8	  	 	 	8.0	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating (loss) income	  	 	(1.8	) 	 	 	21.6	  	 	 	(23.4	) 	 	 	(108.3	) 	
Other income, net	  	 	(2.2	) 	 	 	(1.9	) 	 	 	0.3	  	 	 	15.8	  	
Income tax provision	  	 	0.4	  	 	 	9.1	  	 	 	(8.7	) 	 	 	(95.6	) 	
Income (loss) from discontinued operations, net of income taxes	  	 	0.2	  	 	 	(10.0	) 	 	 	(10.2	) 	 	 	(102.0	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	0.2	  	 	$	4.4	  	 	 	(4.2	) 	 	 	(95.5	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales : For the year ended December 31, 2013, net sales of $5,652.4 million decreased $359.6 million, or 6.0%, compared to the year ended December 31, 2012. Net sales declined primarily due to decreases of $266.8 million and $97.8 million in our Print and Facility Solutions segments, respectively, which are further discussed in the section “Industry Segment Results.”
Cost of Products Sold (Exclusive of Depreciation and Amortization) : For the year ended December 31, 2013, cost of products sold of $4,736.8 million decreased $299.9 million, or 6.0%, compared to the year ended December 31, 2012, which is consistent with the decline in net sales during this period.
Distribution Expenses : For the year ended December 31, 2013, total distribution expenses of $314.2 million decreased by $9.8 million, or 3.0%, compared to the year ended December 31, 2012, primarily due to (i) decreased salaries, wages and employee benefits of $4.1 million as a result of a management initiative to restructure the organization enabling the reduction in headcount, (ii) decreased temporary labor of $3.9 million attributable to the decrease in sales, (iii) decreased freight and fuel costs of $1.2 million primarily attributable to the decrease in sales and (iv) decreased repairs and maintenance costs of $0.6 million. As a percentage of net sales, distribution expense increased from 5.4% to 5.6% due to volume declining more rapidly than costs.
Selling and Administrative Expenses : For the year ended December 31, 2013, selling and administrative expenses of $548.2 million decreased by $32.4 million, or 5.6%, compared to the year ended December 31, 2012 primarily due to (i) a decrease in incentive compensation of $15.4 million attributable to the decrease in sales, (ii) a decrease in salaries, wages and benefits of $9.8 million as a result of a management initiative to restructure the organization enabling the reduction in headcount, (iii) lower commissions of $7.4 million associated with decreased volume, (iv) a decrease in travel and entertainment expenses of $2.8 million attributable to the decrease in sales and (v) a decrease in other administrative expenses of $5.5 million as a result of the decrease in sales. These decreases are partially offset by an $8.6 million increase related to the creation of centralized procurement and operations organizations. Selling and administrative expenses as a percentage of net sales remained consistent and approximated 9.7% for the years ended December 31, 2013 and 2012.
 
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Restructuring Charges : During 2010, xpedx completed a strategic assessment of its operating model, resulting in the decision to undertake a multi-year restructuring plan. The restructuring plan involved the establishment of a lower cost operating model in conjunction with the repositioning of the Print segment in consideration of changing market conditions. The restructuring plan included initiatives to (i) optimize the warehouse network, (ii) improve the efficiency of the sales team and (iii) reorganize the procurement function. Restructuring charges for the year ended December 31, 2013 are primarily comprised of severance of $16.9 million, closure costs to bring the facilities to saleable condition of $15.2 million, personnel costs of $10.9 million, professional services of $1.0 million, partially offset by a gain on sale of fixed assets of $6.4 million.
For the year ended December 31, 2013, restructuring charges of $37.9 million increased by $2.8 million, or 8.0%, compared to the year ended December 31, 2012 primarily due to increases in (i) severance costs of $5.0 million and (ii) facility closure costs of $2.2 million. These increases to restructuring charges are partially offset by an increase of $3.7 million from gains on the sale of fixed assets disposed as part of the restructuring activities and decreased accelerated amortization and depreciation of $0.9 million.
Income Taxes:  The effective tax rate for the year ended December 31, 2013 increased to 100.0% from 38.7% for the year ended December 31, 2012 primarily due to an increased meals and entertainment disallowance.
Discontinued Operations : During 2011, xpedx ceased both its Canadian operations, which provided distribution of printing supplies to Canadian based customers, and its printing press distribution business which operated in the U.S. For the year ended December 31, 2013, income from discontinued operations approximated $0.2 million.
Comparison of Results of Operations for the Years Ended December 31, 2012 and 2011
The following discussion compares the combined operating results of xpedx for the years ended December 31, 2012 and 2011.

 	  	Year Ended December 31,	 	
 	  	2012	 	 	2011	 	 	Increase (Decrease)	 	
 	  	(Dollars in millions)	 	 	$	 	 	%	 	
Net sales	  	$	6,012.0	  	 	$	6,509.2	  	 	$	(497.2	) 	 	 	(7.6	) 	
Cost of products sold (exclusive of depreciation and amortization shown separately below)	  	 	5,036.7	  	 	 	5,475.3	  	 	 	(438.6	) 	 	 	(8.0	) 	
Distribution expenses	  	 	324.0	  	 	 	324.5	  	 	 	(0.5	) 	 	 	(0.2	) 	
Selling and administrative expenses	  	 	580.6	  	 	 	598.7	  	 	 	(18.1	) 	 	 	(3.0	) 	
Depreciation and amortization	  	 	14.0	  	 	 	15.6	  	 	 	(1.6	) 	 	 	(10.3	) 	
Restructuring charges	  	 	35.1	  	 	 	43.6	  	 	 	(8.5	) 	 	 	(19.5	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	21.6	  	 	 	51.5	  	 	 	(29.9	) 	 	 	(58.1	) 	
Other income, net	  	 	(1.9	) 	 	 	(5.2	) 	 	 	(3.3	) 	 	 	(63.5	) 	
Income tax provision	  	 	9.1	  	 	 	21.2	  	 	 	(12.1	) 	 	 	(57.1	) 	
Loss from discontinued operations, net of income taxes	  	 	(10.0	) 	 	 	(13.6	) 	 	 	(3.6	) 	 	 	(26.5	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	4.4	  	 	$	21.9	  	 	$	(17.5	) 	 	 	(79.9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Sales : For the year ended December 31, 2012, net sales of $6,012.0 million decreased by $497.2 million, or 7.6%, compared to the year ended December 31, 2011 principally due to a $425.7 million decline in Print, which is further discussed in the section “Industry Segment Results.”
Cost of Products Sold (Exclusive of Depreciation and Amortization) : For the year ended December 31, 2012, cost of products sold of $5,036.7 million decreased by $438.6 million, or 8.0% compared to the year ended December 31, 2011 as a result of lower overall volume. The lower volume was the result of overall lower demand for print products.
 
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Distribution Expenses : For the year ended December 31, 2012, total distribution expenses of $324.0 million decreased by $0.5 million, or 0.2%, compared to the year ended December 31, 2011 primarily due to (i) decreased facilities costs of $6.3 million attributable to the decrease in sales and (ii) decreased salaries and wages of $2.8 million primarily attributable to the decrease in sales. These decreases are partially offset by (i) increased freight and fuel costs of $6.3 million driven by an increase in miles driven as a result of the consolidation of our distribution network that occurred during 2011 and (ii) increased temporary labor of $2.4 million attributable to a labor strike. As a percentage of net sales, distribution expense increased from 5.0% to 5.4% primarily due to (i) increased freight and fuel costs of 0.2%, (ii) increased salaries and wages of 0.1% and (iii) increased temporary labor of 0.1%.
Selling and Administrative Expenses : For the year ended December 31, 2012, selling and administrative expense of $580.6 million decreased by $18.1 million, or 3.0%, compared to the year ended December 31, 2011 primarily due to (i) a decrease in salaries, wages and employee benefits of $33.4 million as a result of a management initiative to restructure the organization enabling the reduction in headcount, (ii) a decrease in commissions of $6.2 million associated with decreased sales and (iii) a decrease in travel and entertainment of $2.8 million attributable to the decrease in sales. These decreases are partially offset by (i) an increase of $16.9 million related to the creation of a centralized sales and procurement organization in 2012, (ii) additional costs expensed in 2012 for internally developed software of $5.2 million and (iii) increased incentive compensation of $2.3 million. As a percentage of net sales, selling and administrative expenses increased from 9.2% for 2011 to 9.7% for 2012 due to (i) an increase of 0.3% related to the creation of a centralized sales and procurement organization in 2012, (ii) additional costs expensed in 2012 for internally developed software of 0.1%, (iii) an increase in management incentives of 0.1% and (iv) fixed costs remaining consistent over the period. These increases were partially offset by a decrease in salary, wages and benefits of 0.3%.
Restructuring Charges : For the year ended December 31, 2012, restructuring charges of $35.1 million decreased by $8.5 million, or 19.5%, compared to the year ended December 31, 2011 primarily due to a $6.7 million intangible asset write down in 2011 that did not recur in 2012 and a $2.7 million gain on the sale of fixed assets in 2012 attributable to the restructuring activities. The impairment charge of $6.7 million recorded in 2011 related to the Central Lewmar trade name. Restructuring charges for the year ended December 31, 2012 are primarily comprised of closure costs to bring the facility to saleable condition of $13.0 million, severance of $11.9 million and personnel costs of $10.6 million.
Income Taxes: The effective tax rate remained fairly consistent year over year at 38.7% during the year ended December 31, 2012 as compared to 37.4% for the year ended December 31, 2011.
Discontinued Operations : During 2011, xpedx ceased both its Canadian operations, which provided distribution of printing supplies to Canadian based customers, and its printing press distribution business which operated in the U.S. For the year ended December 31, 2012, loss from discontinued operations of $10.0 million decreased by $3.6 million, or 26.5%, compared to the year ended December 31, 2011. The costs incurred in 2012 primarily relate to additional costs associated with fully exiting the businesses.
Industry Segment Results
Segment operating profits are used by xpedx’s management to measure the earnings performance of its segments. Management believes that this measure allows a better understanding of trends in costs, operating efficiencies, prices and volumes. Segment operating profits are defined as earnings from continuing operations before taxes and corporate items. Segment operating profits are considered by the SEC a non-GAAP financial measure, and are not GAAP alternatives to net income or any other operating measure prescribed by accounting principles generally accepted in the United States.
 
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The table below presents selected data by reportable segment reconciled to the combined totals.

 	  	Three Months Ended March 31,	 	 	Year Ended December 31,	 	
 	  	      2014      	 	 	      2013      	 	 	2013	 	 	2012	 	 	2011	 	
 	  	 	 	 	 	 	 	(Dollars in millions)	 	
Net sales:	  				 				 				 				 				
Print	  	$	736.3	  	 	$	796.3	  	 	$	3,219.4	  	 	$	3,486.2	  	 	$	3,911.9	  	
Packaging	  	 	390.0	  	 	 	384.0	  	 	 	1,587.2	  	 	 	1,582.1	  	 	 	1,617.0	  	
Facility Solutions	  	 	181.1	  	 	 	208.1	  	 	 	845.8	  	 	 	943.6	  	 	 	979.9	  	
Corporate and intersegment sales	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.1	  	 	 	0.4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total net sales	  	 	1,307.4	  	 	 	1,388.4	  	 	 	5,652.4	  	 	 	6,012.0	  	 	 	6,509.2	  	
						
Operating profit (loss):	  				 				 				 				 				
Print	  	 	6.9	  	 	 	8.4	  	 	 	27.4	  	 	 	32.3	  	 	 	54.5	  	
Packaging	  	 	14.1	  	 	 	10.7	  	 	 	43.1	  	 	 	51.0	  	 	 	61.5	  	
Facility Solutions	  	 	(10.2	) 	 	 	(8.1	) 	 	 	(24.1	) 	 	 	(35.5	) 	 	 	(18.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total segment operating profit	  	 	10.8	  	 	 	11.0	  	 	 	46.4	  	 	 	47.8	  	 	 	97.7	  	
Corporate items	  	 	(1.5	) 	 	 	(12.4	) 	 	 	(46.0	) 	 	 	(24.3	) 	 	 	(41.0	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total income from continuing operations before income taxes	  	$	9.3	  	 	$	(1.4	) 	 	$	0.4	  	 	$	23.5	  	 	$	56.7	  	

Operating margin:	  				 				 				 				 				
Print	  	 	0.9	% 	 	 	1.1	% 	 	 	0.9	% 	 	 	0.9	% 	 	 	1.4	% 	
Packaging	  	 	3.6	% 	 	 	2.8	% 	 	 	2.7	% 	 	 	3.2	% 	 	 	3.8	% 	
Facility Solutions	  	 	(5.6	)% 	 	 	(3.9	)% 	 	 	(2.8	%) 	 	 	(3.8	)% 	 	 	(1.9	)% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total segment operating margin	  	 	0.8	% 	 	 	0.8	% 	 	 	0.8	% 	 	 	0.8	% 	 	 	1.5	% 	
						
Total operating margin	  	 	0.7	% 	 	 	(0.1	%) 	 	 	0.0	% 	 	 	0.4	% 	 	 	0.9	% 	
The following table presents a reconciliation of net income to total segment operating profit.

 	  	Three Months Ended March 31,	 	 	Year Ended December 31,	 	
 	  	      2014      	 	 	      2013      	 	 	2013	 	 	2012	 	 	2011	 	
 	  	 	 	 	 	 	 	(Dollars in millions)	 	
Net income	  	$	5.5	  	 	$	(0.7	) 	 	$	0.2	  	 	$	4.4	  	 	$	21.9	  	
Add back:	  				 				 				 				 				
Income (loss) from discontinued operations, net of income tax	  	 	(0.1	) 	 	 	0.2	  	 	 	0.2	  	 	 	(10.0	) 	 	 	(13.6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	  	 	5.6	  	 	 	(0.9	) 	 	 	—  	  	 	 	14.4	  	 	 	35.5	  	
Add back:	  				 				 				 				 				
Income tax provision	  	 	3.7	  	 	 	(0.5	) 	 	 	0.4	  	 	 	9.1	  	 	 	21.2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations before income taxes	  	 	9.3	  	 	 	(1.4	) 	 	 	0.4	  	 	 	23.5	  	 	 	56.7	  	
Corporate items	  	 	1.5	  	 	 	12.4	  	 	 	46.0	  	 	 	24.3	  	 	 	41.0	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total segment operating profit	  	$	10.8	  	 	$	11.0	  	 	$	46.4	  	 	$	47.8	  	 	$	97.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Segment operating profit (loss)	  				 				 				 				 				
Print	  	$	6.9	  	 	$	8.4	  	 	$	27.4	  	 	$	32.3	  	 	$	54.5	  	
Packaging	  	 	14.1	  	 	 	10.7	  	 	 	43.1	  	 	 	51.0	  	 	 	61.5	  	
Facility Solutions	  	 	(10.2	) 	 	 	(8.1	) 	 	 	(24.1	) 	 	 	(35.5	) 	 	 	(18.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total segment operating profit	  	$	10.8	  	 	$	11.0	  	 	$	46.4	  	 	$	47.8	  	 	$	97.7	  	

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The principal changes in operating profit by segment were as follows:
 
 	•	 	The decline in Print operating profit for the three months ended March 31, 2014 compared to the same period in 2013 was primarily the result of continued decline in print revenue partially offset by a reduction in operating and restructuring expenses. The decline in Print operating profit from 2011 to 2013 was primarily a result of a decline in net sales of $425.7 million and $266.8 million from 2011 to 2012 and 2012 to 2013, respectively. The decline in net sales year over year was primarily a result of the overall print market decline (6.4% from 2011 to 2012 and 1.6% from 2012 to 2013) and the closure of certain retail locations during 2011, 2012 and 2013. The decline in Print operating profit from 2012 to 2013 was primarily the result of continued decline in print revenue partially offset by reductions in operating and restructuring expenses. Operating margin remained consistent and approximated 0.9% for both 2012 and 2013. The net sales decline from 2011 to 2012 impacting the 2012 operating profit was offset by $2.3 million less of bad debt expense and $4.7 million less of restructuring charges.	
 
 	•	 	Packaging operating profit improved when comparing the three months ended March 31, 2014 to the same period in 2013 primarily as the result of a net sales increase due to new customers. The decrease in Packaging operating profit from 2012 to 2013 was primarily the result of an increase in operating expenses of $4.9 million and an increase in restructuring costs of $3.2 million. The operating profit decrease from 2011 to 2012 was primarily a result of net sales decline of approximately $34.9 million, in addition to an increase in corrugated costs that preceded an increase in selling prices, partially offset by a decrease in restructuring charges of $3.3 million.	
 
 	•	 	Operating profit for Facility Solutions deteriorated when comparing the three months ended March 31, 2014 to the same period in 2013 as a result of the overall decrease in volume partially offset by $1.4 million of reduced operating expenses. The decline in Facility Solutions operating profit from 2011 to 2013 was primarily the result of a decline in volume, leading to a net sales decline of $134.1 million. The decline in volume year over year was a result of increased competitive pressure. From 2011 to 2012, the decline in operating profit was also impacted by increased operating expenses of $7.3 million. Operating profit improved when comparing 2013 to 2012 as a result of $32.8 million of reduced operating expenses, partially offset by the overall decrease in volume.	
Print
The table below presents selected data with respect to the Print segment.

 	 	Three Months Ended
March 31,	 	 	 	 	 	Year Ended
December 31,	 	 	 	 	 	Year Ended
December 31,	 	 	 	 	
 	 	    2014    	 	 	    2013    	 	 	Increase
(Decrease)	 	 	2013	 	 	2012	 	 	Increase
(Decrease)	 	 	2012	 	 	2011	 	 	Increase
(Decrease)	 	
 	 	(Dollars in millions)	 	
Net sales	 	$	736.3	  	 	$	796.3	  	 	$	(60.0	) 	 	$	3,219.4	  	 	$	3,486.2	  	 	$	(266.8	) 	 	$	3,486.2	  	 	$	3,911.9	  	 	$	(425.7	) 	
Operating profit	 	 	6.9	  	 	 	8.4	  	 	 	(1.5	) 	 	 	27.4	  	 	 	32.3	  	 	 	(4.9	) 	 	 	32.3	  	 	 	54.5	  	 	 	(22.2	) 	
Operating margin	 	 	0.9	% 	 	 	1.1	% 	 	 	(0.2	)% 	 	 	0.9	% 	 	 	0.9	% 	 	 	—  	% 	 	 	0.9	% 	 	 	1.4	% 	 	 	(0.5	)% 	
Comparison of the Three Months Ended March 31, 2014 and 2013
Print net sales for the three months ended March 31, 2014 decreased by $60.0 million, or 7.5%, compared to the three months ended March 31, 2013. The decrease in net sales was primarily due to (i) volume decline of $44.0 million, or 5.5%, driven by the overall print market decline of 3.8% and (ii) price erosion of $16.0 million, or 2.0%. Customer losses included within the above changes were approximately $17.8 million.
Print operating profit for the three months ended March 31, 2014 decreased by $1.5 million, or 17.9%, compared to the three months ended March 31, 2013. The decrease in operating profit was primarily driven by a decrease in net sales of $60.0 million partially offset by (i) a $53.6 million decrease in cost of products sold (exclusive of depreciation and amortization), (ii) a reduction in operating expenses of $2.8 million, (iii) lower allocated expenses from International Paper of $0.6 million and (iv) a reduction in restructuring expenses of $1.5 million.
 
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Comparison of the Years Ended December 31, 2013 and December 31, 2012
Print net sales for the year ended December 31, 2013 decreased by $266.8 million, or 7.7%, compared to the year ended December 31, 2012. The decrease in net sales was primarily due to (i) volume decline of $138.4 million, or 4.0%, driven by the overall print market decline of 1.6%, (ii) a decrease of $27.7 million, or 0.8%, as a result of xpedx altering its go-to-market approach for walk-in customers through the closing of certain retail stores and (iii) price erosion of $100.7 million, or 2.9%. Customer losses included within the above changes approximated $113.5 million for the year ended December 31, 2013.
Print operating profit for the year ended December 31, 2013 decreased by $4.9 million, or 15.2%, compared to the year ended December 31, 2012. The decrease in operating profit was primarily driven by an overall decrease in sales partially offset by a reduction in operating expenses of $24.8 million and a reduction in restructuring expenses of $7.5 million. Operating margin remained consistent from 2012 to 2013 and approximated 0.9% for both periods.
Comparison of the Years Ended December 31, 2012 and December 31, 2011
Print net sales for the year ended December 31, 2012, decreased by $425.7 million, or 10.9%, compared to the year ended December 31, 2011. The decrease in Print net sales was primarily due to (i) volume decline of $264.7 million, or 6.8%, driven by the overall print market decline of 6.4%, (ii) a decline $113.8 million, or 2.9%, related to the closure of certain retail locations and (iii) price erosion of $47.2 million, or 1.2%.
Print operating profit for the year ended December 31, 2012 decreased by $22.2 million, or 40.7%, compared to the year ended December 31, 2011. The operating profit decrease was primarily a result of the decline in net sales of $425.7 million partially offset by (i) a $369.3 million decrease in cost of products sold (exclusive of depreciation and amortization), (ii) a $4.7 million decrease in restructuring charges and (iii) a $2.3 million decrease in bad debt expense.
Packaging
The table below presents selected data with respect to the Packaging segment.

 	 	Three Months
Ended
March 31,	 	 	 	 	 	Year Ended
December 31,	 	 	 	 	 	Year Ended
December 31,	 	 	 	 	
 	 	2014	 	 	2013	 	 	Increase
(Decrease)	 	 	2013	 	 	2012	 	 	Increase
(Decrease)	 	 	2012	 	 	2011	 	 	Increase
(Decrease)	 	
 	 	(Dollars in millions)	 	
Net sales	 	$	390.0	  	 	 	384.0	  	 	$	6.0	  	 	$	1,587.2	  	 	$	1,582.1	  	 	$	5.1	  	 	$	1,582.1	  	 	$	1,617.0	  	 	$	(34.9	) 	
Operating profit	 	 	14.1	  	 	 	10.7	  	 	 	3.4	  	 	 	43.1	  	 	 	51.0	  	 	 	(7.9	) 	 	 	51.0	  	 	 	61.5	  	 	 	(10.5	) 	
Operating margin	 	 	3.6	% 	 	 	2.8	% 	 	 	0.8	  	 	 	2.7	% 	 	 	3.2	% 	 	 	(0.5	)% 	 	 	3.2	% 	 	 	3.8	% 	 	 	(0.6	)% 	
Comparison of the Three Months Ended March 31, 2014 and 2013
Packaging net sales for the three months ended March 31, 2014 increased by $6.0 million, or 1.6%, compared to the three months ended March 31, 2013. The increase in net sales was primarily due to an increase in sales to new customers of $5.8 million.
Packaging operating profit for the three months ended March 31, 2014 increased by $3.4 million, or 31.8%, compared to the three months ended March 31, 2013. The increase in operating profit outpaced the increase in net sales primarily due to a decrease in operating expenses of $3.6 million.
 
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Comparison of the Years Ended December 31, 2013 and December 31, 2012
Packaging net sales for the year ended December 31, 2013 increased by $5.1 million, or 0.3%, compared to the year ended December 31, 2012. The increase in net sales was primarily due to increased volume of $4.6 million or 0.3%. This increase is primarily attributable to the realization of benefits from the multi-year restructuring plan which was implemented during 2011.
Packaging operating profit for the year ended December 31, 2013 decreased by $7.9 million, or 15.5%, compared to the year ended December 31, 2012. The decline in operating profit is primarily due to an increase in operating expenses of $4.9 million and an increase in restructuring costs of $3.2 million.
Comparison of the Years Ended December 31, 2012 and December 31, 2011
Packaging net sales for the year ended December 31, 2012 decreased by $34.9 million, or 2.2%, compared to the year ended December 31, 2011 due to a volume decline of $32.3 million, or 2.0%. The decrease was primarily the result of revenue decline of $39.4 million for an existing customer.
Packaging operating profit for the year ended December 31, 2012 decreased by $10.5 million, or 17.1%, compared to the year ended December 31, 2011. The operating profit decline was the result of an increase in corrugated and resin cost that were not fully passed on to customers, partially offset by a reduction in restructuring charges of $3.3 million.
Facility Solutions
The table below presents selected data with respect to the Facility Solutions segment.

 	 	Three Months
Ended
March 31,	 	 	 	 	 	Year Ended
December 31,	 	 	 	 	 	Year Ended
December 31,	 	 	 	 	
 	 	2014	 	 	2013	 	 	Increase
(Decrease)	 	 	2013	 	 	2012	 	 	Increase
(Decrease)	 	 	2012	 	 	2011	 	 	Increase
(Decrease)	 	
 	 	(Dollars in millions)	 	
Net sales	 	$	181.1	  	 	$	208.1	  	 	$	(27.0	) 	 	$	845.8	  	 	$	943.6	  	 	$	(97.8	) 	 	$	943.6	  	 	$	979.9	  	 	$	(36.3	) 	
Operating profit	 	 	(10.2	) 	 	 	(8.1	) 	 	 	(2.1	) 	 	 	(24.1	) 	 	 	(35.5	) 	 	 	11.4	  	 	 	(35.5	) 	 	 	(18.3	) 	 	 	(17.2	) 	
Operating margin	 	 	(5.6	)% 	 	 	(3.9	)% 	 	 	(1.7	)% 	 	 	(2.8	)% 	 	 	(3.8	)% 	 	 	1.0	% 	 	 	(3.8	)% 	 	 	(1.9	)% 	 	 	(1.9	)% 	
Comparison of the Three Months Ended March 31, 2014 and 2013
Facility Solutions net sales for the three months ended March 31, 2014 decreased by $27.0 million, or 13.0%, compared to the three months ended March 31, 2013 primarily as a result of the decline in volume. The decrease was due to lost customers of $13.7 million, overall market decline and management’s decision to reposition its distribution network.
Facility Solutions operating profit for the three months ended March 31, 2014 decreased by $2.1 million, or 25.9%, compared to the three months ended March 31, 2013 primarily due to a decrease in net sales of $27.0 million. This decrease to operating profit was partially offset by a $23.0 million decrease in cost of products sold (exclusive of depreciation and amortization), a decrease in operating expenses of $1.4 million and a decrease in restructuring costs of $0.6 million.
Comparison of the Years Ended December 31, 2013 and December 31, 2012
Facility Solutions net sales for the year ended December 31, 2013 decreased by $97.8 million, or 10.4%, compared to the year ended December 31, 2012 primarily as a result of the decline in volume. The decrease was due to lost customers of $31.8 million, overall market decline and management’s decision to reposition its distribution network.
 
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Facility Solutions operating profit for the year ended December 31, 2013 increased by $11.4 million, or 32.1%, compared to the year ended December 31, 2012 primarily due to a decrease in cost of products sold (exclusive of depreciation and amortization) of $75.8 million, a decrease in operating expenses of $32.8 million and a decrease in restructuring costs of $0.7 million. These increases to operating profit were partially offset by a decrease in net sales of $97.8 million.
Comparison of the Years Ended December 31, 2012 and December 31, 2011
Facility Solutions net sales for the year ended December 31, 2012 decreased by $36.3 million, or 3.7%, compared to the year ended December 31, 2011. The decrease in net sales was primarily a result of volume decline of $38.0 million related to specific customer losses, as well as an overall price decline of 0.5% or $5.0 million, partially offset by new customer activity of $8.0 million.
Facility Solutions operating profit for the year ended December 31, 2012 decreased by $17.2 million, or 94.0%, compared to the year ended December 31, 2011. The operating profit decrease was a result of the volume decline and customer loss discussed above along with an increase in operating expenses of $7.3 million. Higher operating expenses were primarily due to (i) an increase in delivery charges of $4.4 million as a result of higher fuel charges and (ii) an increase of $1.6 million related to handling expense.
Corporate Items
The principal changes in corporate items were as follows:
 
 	•	 	The decrease in corporate items from March 31, 2013 to March 31, 2014 of $10.9 million was primarily a result of lower allocated expenses from International Paper of $7.9 million and a reduction in restructuring costs of $4.7 million. These decreases were partially offset by an increase in operating expenses of $0.7 million.	
 
 	•	 	The increase in corporate items from 2012 to 2013 of $21.7 million was primarily a result of a $7.8 million increase in restructuring, a $4.3 million increase in operating expenses and $3.6 million of higher allocated expenses from International Paper. Consolidated restructuring increased as a result of increased restructuring related incentive compensation and severance. Corporate operating expenses increased primarily due to increased incentive compensation and severance not associated with restructuring.	
 
 	•	 	The decrease in corporate items from 2011 to 2012 of $16.7 million was primarily a result of $10.2 million of lower allocated expenses from International Paper. In addition, corporate items were impacted by lower deferred rebates of $0.9 million and a decrease in management incentives of $1.5 million as a result of xpedx not meeting annual performance targets.	
Liquidity and Capital Resources
Historical
Under International Paper’s centralized cash management system, the cash requirements of xpedx were provided directly by International Paper and cash generated by xpedx was generally remitted directly to International Paper. During the three years ended December 31, 2013, 2012 and 2011, xpedx generated sufficient cash from operating activities to fund its capital spending.
 
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The following table sets forth a summary of cash flows for the three months ended March 31, 2014 and 2013 and for the years ended December 31, 2013, 2012 and 2011.

 	  	Three Months Ended
March 31,	 	 	Year Ended December 31,	 	
 	  	2014	 	 	2013	 	 	2013	 	 	2012	 	 	2011	 	
 	  	 	 	 	 	 	 	(Dollars in millions)	 	
Net cash from (used for):	  				 				 				 				 				
Operating activities	  	$	35.2	  	 	$	46.6	  	 	$	52.2	  	 	$	56.0	  	 	$	107.7	  	
Investing activities	  	 	0.5	  	 	 	(8.4	) 	 	 	13.2	  	 	 	(7.5	) 	 	 	(17.1	) 	
Financing activities	  	 	(34.7	) 	 	 	(57.8	) 	 	 	(76.6	) 	 	 	(46.3	) 	 	 	(91.5	) 	
Operating Activities
Three Months Ended March 31, 2014 Compared with March 31, 2013 : We generated $35.2 million of cash from operating activities during the three months ended March 31, 2014; a decrease of $11.4 million compared with the $46.6 million generated during the three months ended March 31, 2013. This decrease was primarily due to a decrease in cash generated by working capital of $19.0 million, partially offset by $8.6 million of higher income from continuing operations, adjusted to exclude non-cash items and deferred income taxes.
2013 Compared with 2012: We generated $52.2 million of cash from operating activities during the year ended December 31, 2013; a decrease of $3.8 million compared with the $56.0 million generated during the year ended December 31, 2012. This decrease was primarily due to $13.2 million of lower income from continuing operations, adjusted to exclude non-cash items and deferred income taxes, partially offset by (i) an increase in cash generated by working capital of $7.6 million and (ii) a decrease in cash used by discontinued operations for operating activities of $1.8 million.
2012 Compared with 2011: We generated $56.0 million of cash from operating activities during the year ended December 31, 2012; a decrease of $51.7 million compared with the $107.7 million generated during the year ended December 31, 2011. This decrease was primarily due to $37.4 million of lower income from continuing operations, adjusted to exclude non-cash impairment charges and deferred income taxes, as well as a decrease in cash generated by working capital components of $5.5 million. The decrease in cash generated by working capital components was primarily due to the changes in accounts receivable and accounts payable as a result of the overall decrease in sales and cost of sales.
Investing Activities
During the three months ended March 31, 2014, cash used for capital expenditures was approximately $1.0 million. This was offset by proceeds from the sale of certain assets of $1.0 million.
During the three months ended March 31, 2013, cash used for capital expenditures was approximately $3.9 million. This was more than offset by proceeds from the sale of certain assets of $12.5 million.
During 2013, cash used for capital expenditures was approximately $9.8 million. This was more than offset by proceeds from the sale of certain assets of $22.7 million.
During 2012, cash used for capital expenditures was approximately $13.3 million. This was partially offset by proceeds from sale of certain assets of $5.1 million.
During 2011, cash used for capital expenditures was approximately $17.4 million.
 
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Financing Activities
Cash used in financing activities for the three years ended December 31, 2013 and the three months ended March 31, 2014 and 2013, primarily represent transactions between us and International Paper. These transactions are considered to be effectively settled for cash at the time the transaction is recorded. The components of these transactions (or transfers) include (i) cash transfers from us to International Paper, (ii) cash transfers from International Paper to fund our requirements for working capital and other commitments and (iii) allocation of International Paper’s corporate expenses.
Free Cash Flow
For a discussion of free cash flow, see “—Key Performance Measures—Free Cash Flow Trends.”
The Combined Company
Following the completion of the Transactions, the combined company’s capital structure and sources of liquidity will change significantly from our historical capital structure. We will no longer participate in cash management and funding arrangements with International Paper. Instead, our ability to fund the combined company’s cash needs will depend on SpinCo’s ongoing ability to generate cash from operations and borrow under the ABL Facility. If the combined company’s cash flows from operating activities are lower than we expect, we will need to borrow under the ABL Facility and may need to incur additional debt or issue additional equity. Although we believe that the arrangements in place at the time of the closing of the Transactions will permit the combined company to finance our operations on acceptable terms and conditions, our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including (i) the combined company’s credit ratings or absence of a credit rating, (ii) the liquidity of the overall capital markets and (iii) the current state of the economy.
We expect that the combined company’s primary future cash needs will be for working capital, capital expenditures, contractual commitments and strategic investments. On a pro forma as adjusted basis giving effect to the Transactions, the combined company would have had cash and cash equivalents of $33.3 million as of March 31, 2014. We expect that cash provided by operating activities and available capacity under the ABL Facility will provide sufficient funds to operate the combined company’s business and meet the combined company’s other liquidity needs for the twelve months following the closing of the Transactions. We expect the combined company to generate positive free cash flow before restructuring and integration expenses for the twelve months following the closing.
We currently expect the one-time costs associated with achieving anticipated cost savings and other synergies from the Merger to be approximately $225 million over a five-year period, including approximately $70 million for information technology infrastructure and systems integration and planning.
As a result of the Transactions, we may be obligated to pay bonus, severance, change-in-control and other employee payments of approximately $30 million to certain Unisource employees.
Capital spending for the combined company for the second half of 2014 is currently estimated to be $10 million, excluding one-time integration costs which may be capitalized.
In connection with the Transactions, we will enter into the ABL Facility, which we expect will provide for revolving loans in an aggregate principal amount of up to $1,400.0 million (subject to availability under a borrowing base). The ABL Facility will be available to finance the Transactions and to fund working capital and other general corporate purposes. The borrowing base availability under the ABL Facility is estimated to be approximately $1,251.8 as of March 31, 2014. After giving effect to letters of credit of approximately $13.8 million expected to be issued under the ABL Facility and initial borrowings under the ABL Facility of approximately $698.9 million in connection
 
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with the Transactions, assuming the Transactions had closed as of March 31, 2014, we expect to have available borrowing capacity of approximately $539.1 million under the ABL Facility as of the Closing Date. Our liquidity requirements will be significant, primarily due to the combined company’s debt service requirements. On a pro forma combined basis, after giving effect to the Transactions, assuming the Transactions had closed as of March 31, 2014, our interest expense for the three months ended March 31, 2014 would have been $4.8 million for our ABL Facility. See “Description of Material Indebtedness.”
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of March 31, 2014, other than the operating lease obligations listed in the table below. Immediately following the Transactions, we do not expect to not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
Contractual Obligations
The table below presents our estimated total contractual obligations at December 31, 2013, including the amounts expected to be paid or settled for each of the periods indicated below.

 	  	Payments Due by Period	 	
 	  	Total	 	  	Less Than
1 Year	 	  	1–3
Years	 	  	3–5
Years	 	  	More Than
5 Years	 	
 	  	(Dollars in millions)	 	
Non-cancelable operating leases (1)	  	$	230.5	  	  	$	45.4	  	  	$	69.6	  	  	$	54.4	  	  	$	61.1	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	230.5	  	  	$	45.4	  	  	$	69.6	  	  	$	54.4	  	  	$	61.1	  	

(1)	Non-cancelable operating leases are presented net of estimated sublease rental income.	
As of March 31, 2014, on a pro forma combined basis, we had contractual obligations and commitments consisting principally of non-cancelable operating leases and long-term debt, representing our expected borrowings under our ABL Facility and related projected interest obligations. Subsequent to March 31, 2014, other than as contemplated by the Transactions, there have been no material changes to our contractual obligations that are outside the normal course. For further discussion of the impact of the Transactions on the contractual obligations of the combined company, see “Unaudited Pro Forma Condensed Combined Financial Information of Combined Company and Related Notes” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation for Unisource—Impacts of Merger.”
Quantitative and Qualitative Disclosures About Market Risk
xpedx has limited exposure to foreign currency exchange risk as the substantial majority of the business is conducted in U.S. dollars. In addition, 97.5% of our sales were in the U.S. for the year ended December 31, 2013. As a business within International Paper, xpedx has not directly experienced exposure to the impacts of certain market risks, including those related to equity price risk and interest rate risk.
We will be exposed to changes in interest rates following the Transactions. Our indebtedness under our new ABL Facility will bear interest at variable rates. As a result, increases in interest rates could increase the cost of servicing such debt and materially reduce our profitability and cash flows. See Note 2(V) to the unaudited pro forma condensed combined financial statements. We may manage our exposure to fluctuations in interest rates following the consummation of the Transactions with respect to our new ABL Facility by entering into certain market-based interest rate hedging instruments, such as swaps or caps.
 
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Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires xpedx to establish accounting policies and to make estimates that affect both the amounts and timing of the recording of assets, liabilities, net sales and expenses. Some of these estimates require judgment about matters that are inherently uncertain. Actual amounts will differ from these estimates and could differ materially.
Management of xpedx has evaluated the accounting policies used in the preparation of the financial statements and related notes presented elsewhere in this prospectus and believes those policies to be reasonable and appropriate. Management of xpedx believes that the most critical accounting policies whose application may have a significant effect on the reported results of operations and financial position of xpedx, and that can require judgments by Management that affect their application, include the accounting for (i) revenue (ii) contingencies, (iii) impairment or disposal of long-lived assets and goodwill, (iv) pensions and postretirement benefit obligations, (v) stock based compensation and (vi) income taxes.
Revenue Recognition
Revenue is recognized when persuasive evidence of an arrangement exists, the price is fixed or determinable, collectability is reasonably assured and delivery has occurred. Revenue is recognized when the customer takes title and assumes the risks and rewards of ownership. Revenue is recorded at the time of shipment for customer terms designated f.o.b. (free on board) shipping point. For sales transactions with customers designated f.o.b. destination, revenue is recorded when the product is delivered to the customer’s delivery site, when title and risk of loss are transferred. Shipping terms are determined on a customer by customer or order by order basis.
Certain revenues are derived from shipments arranged by xpedx made directly from a manufacturer to an xpedx customer. xpedx is considered to be a principal to these transactions because, among other factors, xpedx controls pricing to the customer and bears the credit risk of the customer defaulting on payment and is the primary obligor. Revenues from these sales are reported on a gross basis in the combined statements of operations and comprehensive income and amounted to $2.4 billion, $2.5 billion, and $2.8 billion for the years ended December 31, 2013, 2012 and 2011, respectively, and $0.5 billion and $0.6 billion for the three months ended March 31, 2014 and 2013, respectively.
Taxes collected from customers relating to product sales and remitted to governmental authorities are accounted for on a net basis. Accordingly, such taxes are excluded from both net sales and expenses.
Contingent Liabilities
Accruals for contingent liabilities, including legal matters, are recorded when it is probable that a liability has been incurred or an asset impaired and the amount of the loss can be reasonably estimated. Liabilities accrued for legal matters require judgments regarding projected outcomes and range of loss based on historical experience and recommendations of legal counsel.
Impairment of Long-Lived Assets and Goodwill
An impairment of a long-lived asset exists when the asset’s carrying amount exceeds its expected future undiscounted cash flows, and is recorded at its estimated fair value. Goodwill impairment exists when the carrying amount of goodwill exceeds its fair value. Assessments of possible impairments of long-lived assets and goodwill are made when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable through future operations. Additionally, testing for possible impairment of goodwill and intangible asset balances is required annually. The amount and timing of any impairment charges based on these
 
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assessments require the estimation of future cash flows and the fair market value of the related assets based on management’s best estimates of certain key factors. These key factors include, future selling prices and volumes, operating, raw material, energy and freight costs, and various other projected operating economic factors. As these key factors change in future periods, we will update our impairment analyses to reflect our latest estimates and projections.
Under the provisions of Accounting Standards Codification (ASC) 350, “Intangibles—Goodwill and Other,” the testing of goodwill for possible impairment is a two-step process. In the first step, the fair value of our reporting units is compared with their carrying value, including goodwill. If fair value exceeds the carrying value, goodwill is not considered to be impaired. If the fair value of a reporting unit is below the carrying value, then step two is performed to measure the amount of the goodwill impairment loss for the reporting unit. This analysis requires the determination of the fair value of all of the individual assets and liabilities of the reporting unit, including any currently unrecognized intangible assets, as if the reporting unit had been purchased on the analysis date. Once these fair values have been determined, the implied fair value of the unit’s goodwill is calculated as the excess, if any, of the fair value of the reporting unit determined in step one over the fair value of the net assets determined in step two. The carrying value of goodwill is then reduced to this implied value, or to zero if the fair value of the assets exceeds the fair value of the reporting unit, through a goodwill impairment charge.
The impairment analysis requires a number of judgments by management. In calculating the estimated fair value of its reporting units in step one, we use the projected future cash flows to be generated by each unit over the estimated remaining useful operating lives of the unit’s assets, discounted using the estimated cost-of-capital discount rate for each reporting unit. These calculations require many estimates, including discount rates, future growth rates, and cost and pricing trends for each reporting unit. Subsequent changes in economic and operating conditions can affect these assumptions and could result in additional interim testing and goodwill impairment charges in future periods. Upon completion, the resulting estimated fair values are then analyzed for reasonableness by comparing them to earnings multiples for historic industry business transactions and by comparing the sum of the reporting unit fair values and to the fair value of xpedx as a whole.
No goodwill or long-lived asset impairment charges were recorded during the years ended December 31, 2013 or 2012. An impairment charge of $6.7 million was recorded in the year ended December 31, 2011 related to the Central Lewmar trade name, which was included within restructuring charges in the combined statements of operations and comprehensive income. No goodwill impairment charges were recorded in 2011.
Retirement and Post Retirement Benefit Obligations
Certain of xpedx’s employees participate in defined benefit pension and other post-employment benefit plans (the “Plans”) sponsored by International Paper and accounted for by International Paper in accordance with accounting guidance for defined benefit pension and other post-employment benefit plans. The total cost of the Plans is determined by actuarial valuation and xpedx receives an allocation of the service cost of the Plans based upon a percent of salaries. The amount of net pension and other post-employment benefit expense attributable to xpedx related to these International Paper sponsored plans was $15.1 million, $12.7 million and $12.8 million for the years ended December 31, 2013, 2012 and 2011, respectively, and $3.9 million and $3.8 million for the three months ended March 31, 2014 and 2013, respectively. xpedx also contributes to multiemployer pension plans for certain collective bargaining U.S. employees that are not sponsored by International Paper. xpedx made contributions to the bargaining unit supported multiemployer pension plans of $2.5 million, $2.6 million and $2.6 million for the years ended December 31, 2013, 2012 and 2011, respectively, and $0.6 million and $0.5 million for the three months ended March 31, 2014 and 2013, respectively.
Accounting for Stock Based Compensation
As of December 31, 2013, all equity awards held by employees of xpedx were granted under International Paper’s 2009 Incentive Compensation Plan (“ICP”) or predecessor plans. The ICP authorizes grants of restricted
 
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stock, restricted or deferred stock units, performance awards payable in cash or stock upon the attainment of specified performance goals, dividend equivalents, stock options, stock appreciation rights, other stock-based awards, and cash-based awards at the discretion of the Management Development and Compensation Committee of the board of directors (the “Committee”) that administers the ICP. Restricted stock units were also awarded to certain non-U.S. employees.
Under the Performance Share Plan (“PSP”), contingent awards of International Paper common stock are granted by the Committee. The PSP awards are earned over a three-year period. For the 2011 grant, one-fourth of the award was earned during each of the three twelve-month periods, with the final one-fourth portion earned over the full three-year period. Beginning with the 2012 grant, the award was earned evenly over a thirty-six-month period. PSP awards are earned based on the achievement of defined performance rankings of return on investment (“ROI”) and total shareholder return (“TSR”) compared to ROI and TSR peer groups of companies. Awards are weighted 75% for ROI and 25% for TSR for all participants except for officers for whom the awards are weighted 50% for ROI and 50% for TSR. The ROI component of the PSP awards is valued at the closing stock price on the day prior to the grant date. As the ROI component contains a performance condition, compensation expense, net of estimated forfeitures, is recorded over the requisite service period based on the most probable number of awards expected to vest.
The service-based Restricted Stock Award program (“RSA”), designed for recruitment, retention and special recognition purposes, also provides for awards of restricted stock to key employees. Of the outstanding awards at December 31, 2013, 25,000 shares are expected to vest in 2014.
Income Taxes
Following the Transactions, SpinCo will record its global tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates. Where we believe that a tax position is supportable for income tax purposes, the item will be included in SpinCo’s income tax returns. Where treatment of a position is uncertain, liabilities will be recorded based upon our evaluation of the “more likely than not” outcome considering technical merits of the position based on specific tax regulations and facts of each matter. Changes to recorded liabilities will be only made when an identifiable event occurs that changes the likely outcome, such as settlement with the relevant tax authority, the expiration of statutes of limitation for the subject tax year, change in tax laws, or a recent court case that addresses the matter.
Valuation allowances will be recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income, as well as successful implementation of various tax planning strategies.
While xpedx believes that these judgments and estimates are appropriate and reasonable under the circumstances, actual resolution of these matters may differ from recorded estimated amounts.
xpedx’s effective income tax rates, before discontinued operations, were 100.0%, 38.7% and 37.4% for 2013, 2012 and 2011, respectively, and 39.8% and 35.7% for the three months ended March 31, 2014 and 2013, respectively.
Recent Accounting Standards Implemented and Accounting Standards Issued and Not Yet Implemented
For a discussion of new accounting standards implemented, see Note 2, “Recent Accounting Developments,” of the audited combined financial statements of xpedx for the three years ended December 31, 2013 included elsewhere in this prospectus.
 
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 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF UNISOURCE
You should read the following discussion of Unisource’s results of operations and financial condition together with Unisource’s audited historical consolidated financial statements and notes thereto and unaudited condensed consolidated financial statements and notes thereto included in this prospectus as well as the discussion in the section of this prospectus entitled “Business of Unisource.” This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Unisource’s actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections of this prospectus entitled “Risk Factors” and “Note Regarding Forward-Looking Statements and Information.”
Overview
Merger with xpedx Intermediate
The Merger Agreement provides that sequentially and immediately following the Distribution and on the terms and subject to the other conditions of the Merger Agreement, UWWH will merge with and into SpinCo, with SpinCo continuing as the surviving corporation. Immediately thereafter, xpedx Intermediate, a wholly-owned subsidiary of SpinCo will merge with and into UWW, with UWW surviving such merger as a wholly-owned subsidiary of SpinCo.
Unisource Business
Unisource is a leading distributor of printing and business paper products, packaging supplies and equipment, and facility supplies and equipment, primarily in the United States and Canada. Additionally, Unisource has international operations in Europe, Asia and Latin America. Unisource is one of the largest independent print, packaging and facility supplies distributors in North America with approximately $4.1 billion in net sales in fiscal 2013. Unisource markets and distributes its products, supplies and services to approximately 48,000 customers, based on customer bill-to locations. Unisource is organized into six business units (U.S. Distribution, Canada Distribution, Graphic Communications (“Graphic”), Rollsource, PaperPlus and Unisource Global Solutions (“UGS”)) and sells four primary product categories (Print, Packaging, Facility Supplies and Other) as described below. Over the last several years, the print market has experienced a secular decline in North America as a result of increasing electronic distribution and communication and eCommerce. Unisource is addressing the declining print market by focusing on global corporate end-use customers who have a ready need for improved print consultative and management services and by investing in and focusing on its three other product categories.
Unisource stocks more than 80,000 different commercial paper, business paper, imaging supplies, packaging supplies and equipment products, and facility supplies and equipment products. Through an expansive supplier network, Unisource also has ready access to thousands of additional products to fulfill its customers’ specific requirements. Unisource sells its products to a diverse customer base that includes building service contractors, catalog and direct mail providers, commercial printers, consumer goods providers, cruise lines, food processors, healthcare providers, higher education institutions, government agencies, fulfillment industry, hotels and resorts, manufacturers and property managers. No single customer accounted for more than 5% of Unisource’s net sales for fiscal 2013.
The following summary describes the major product categories and services offered by Unisource:
 
 	•	 	Print: The Print product category encompasses the sale and distribution of high-quality commercial printing, writing, copying and digital printing paper.	
 
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 	•	 	Packaging: The Packaging product category includes the sale and distribution of consumer goods packaging, packaging for industrial or manufacturing components and point-of-sale displays as well as the sale and distribution of single function or fully automated packaging machines. This product category includes fulfillment and contract packaging services, packaging design, packaging equipment and related equipment installation and service.	
 
 	•	 	Facility Supplies: The Facility Supplies product category includes the sale and distribution of a broad range of maintenance supplies, equipment and service.	
 
 	•	 	Other : The Other product category includes primarily outsourced supply chain solutions, also known as third-party logistics services, which includes freight brokerage, material handling, warehousing and kitting.	
Unisource product categories are based primarily on product designations used by its U.S. Distribution and Canada Distribution businesses. Unisource’s Graphic, Rollsource and PaperPlus businesses sell primarily items in the Print product category and UGS sells products primarily in the Packaging product category. The Other product category is primarily offered by the U.S. Distribution business.
Industry Considerations
The markets for print, packaging and facility supplies products are highly competitive, with numerous regional and local competitors. One characteristic that all of Unisource’s markets share is strong price competition. The markets for each of Unisource’s major product categories are mature and characterized by slowing, or in the case of print, declining gross revenue. Unisource believes that the principal competitive factors in these markets include price, responsiveness to customer needs, quality of customer service and the range of products maintained in inventory for quick delivery.
Unisource’s Print product category competitors include numerous regional distributors and independent local distributors and very few distributors with a national presence. Several regional and local distributors have joined together to provide marketing and distribution capabilities across a broad geographic area for national customers.
The market for the Packaging product category is extremely fragmented, and Unisource’s packaging products face competition from national and regional packaging distributors, national and regional manufacturers of packaging materials, independent brokers and both catalog-based and online business-to-business suppliers.
In the fragmented Facility Supplies product category market, Unisource competes with a large number of local and regional distributors, as well as several national distributors. Large customers, including national accounts, often desire to do business with a network of independent regional distributors rather than depend on one company such as Unisource. Other key competitors include the business-to-business divisions of big box retailers, purchasing group affiliates and both catalog-based and online business-to-business suppliers.
Reorganization and Restructuring Activities
Over the past several years, Unisource developed and implemented a series of restructuring programs which were established primarily to lower the cost of its operating model and also to reposition Unisource’s sales model to respond to the continued secular decline in the print market. These restructuring initiatives have primarily included: (i) reorganization and restructuring of the sales teams, sales management and sales support functions, (ii) restructuring of unprofitable service offerings and locations, (iii) centralization of back-office functions and (iv) closures and consolidations of certain facilities. These programs included the North American shared service model, Sweden operation closure, U.S. sales reorganization and cold chain storage reorganization.
Unisource has been implementing a North American shared service model for the past several years. Restructuring efforts have included the reorganization and centralization of sales management, sales operations,
 
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supply chain operations, customer service and corporate support functions and the closure and consolidation of certain facilities. The purpose of this program is to improve profitability, create more efficient business processes and optimize Unisource’s ability to service large and geographically dispersed customers. This program is still ongoing.
During 2013, Unisource closed its Sweden operations which had been planned for future packaging manufacturing, research and development. This program was substantially completed in the third quarter of 2013.
Primarily in response to the secular decline in the print market, the U.S. sales reorganization focused on right-sizing the U.S. Distribution business’ sales organization and sales support functions. This program was finalized in the third quarter of 2011.
In the second quarter of 2011, the Canada Distribution business concluded that the existing arrangement to provide procurement, cold storage and delivery services to an existing retail customer was not economically viable. Unisource and the customer mutually agreed to terminate and transition the arrangement. As a result, Unisource decided to exit the delivery part of the cold storage service offering. This program included the reorganization of certain support functions and the elimination of delivery and handling equipment. This program was completed in the fourth quarter of 2011.
Additionally, on December 5, 2011, Unisource issued redeemable preferred stock (the “Redeemable preferred stock”) to Georgia-Pacific as partial settlement for outstanding long-term debt obligations (“PIK notes”) that were originally issued in connection with the Bain Capital acquisition of Unisource (refer to Note 10 of Unisource’s consolidated financial statements for fiscal year ended December 31, 2013). This transaction also included a cash payment of $100.0 million from Unisource to Georgia-Pacific. On the date of issuance, the Redeemable preferred stock had a liquidation value of $228.5 million. Redeemable preferred stock dividends are accrued daily at an annual rate of 8.0% based on the liquidation value of the outstanding shares and if unpaid are added to the liquidation value of the Redeemable preferred shares on each anniversary date.
For each anniversary date that occurs before April 29, 2016, Unisource has the option to either pay the declared dividend amounts in cash or to elect to have the unpaid dividend amount added to the liquidation value of the Redeemable preferred stock. On April 29, 2016, Unisource is required to declare and pay in cash all dividends that are accrued and unpaid as of that date, including unpaid amounts which were previously added to the liquidation value. Since the issuance of the Redeemable preferred stock, Unisource has elected not to pay dividends in cash. At December 31, 2013, the liquidation value of the Redeemable preferred stock was $268.1 million.
Pursuant to an internal reorganization consummated on January 27, 2014 in preparation for the Merger, the Redeemable preferred stock, as well as all existing UWWH common stock and stock options, were cancelled and all obligations related to the accumulated dividends on such Redeemable preferred stock ownership were terminated. In connection with the internal reorganization, equity interests in the UWWH Stockholder were issued to holders of cancelled equity interests on substantially the same economic terms as the cancelled equity interests, including the obligation to pay the accumulated preferred dividends when due. As of January 27, 2014, Unisource no longer has any obligation with respect to Redeemable preferred stock or the accumulated dividends thereon (refer to Note 1, Note 10 and Note 11 of Unisource’s condensed consolidated financial statements for the three months ended March 31, 2014). UWWH is neither a party to nor a guarantor of the UWWH Stockholder’s obligation and as such the obligation is not reflected in the condensed consolidated financial statements of UWWH as of March 31, 2014. However, prior to the Merger, to the extent that Unisource holds cash legally available for distribution and is permitted to distribute such cash under both the Senior Credit Facility agreement (refer to Note 7 of Unisource’s unaudited condensed consolidated financial statements for the three months ended March 31, 2014) and the Merger Agreement, UWWH may be required to dividend funds to the UWWH Stockholder to pay distributions to its members.
 
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Key Performance Measures
Unisource supplements its financial information prepared in accordance with GAAP with Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, restructuring (gains) expenses, merger expenses, asset impairments and certain other items, if any) because Unisource believes investors commonly use Adjusted EBITDA as a key financial metric for assessing the performance of Unisource and because similar information has historically been required by its lenders pursuant to its North American asset-based senior credit facility, dated March 15, 2011 (the “Senior Credit Facility”). Operating income and free cash flow are also important primary financial performance measures which are used by Unisource to manage its businesses and monitor results of its operations and cash flow performance. Operating income is used by Unisource to manage performance as it is a comprehensive measure reflecting both growth and efficiency. Free cash flow is used by Unisource as it is a measure that reflects the effectiveness of managing working capital together with operating earnings and the business’ ability to fund capital requirements. Adjusted EBITDA and free cash flow are considered by the SEC as non-GAAP financial measures and are not GAAP alternatives to net income or any other measure of operating performance, cash flows or liquidity prescribed by GAAP.
Net Sales Trends: During the last five years total net sales have increased $93.1 million, or 2.3%, from $3,996.0 million during fiscal 2009 to $4,089.1 million during fiscal 2013. During the period from fiscal 2009 to fiscal 2013, Unisource’s Print product category net sales declined by $193.5 million, or 8.0%, Packaging product category net sales increased by $263.8 million, or 30.2%, Facility Supplies product category net sales decreased by $40.8 million, or 5.8%, and Other product category net sales increased by $63.5 million from $1.0 million in 2009. This growth represents primarily third party logistics services which was a startup business in 2009 and grew to $62.0 million in net sales for fiscal 2013. The decline in Print product category net sales during the five year period is primarily attributable to the overall secular decline in the print market. One of the sources that Unisource uses to monitor the print market is information provided by the Pulp and Paper Products Council that depicts North American Printing and Writing Paper Statistics. Based on these reports, volume within the print market increased by 3.5% from 2009-2010, decreased by 5.5% from 2010-2011, decreased by 6.4% from 2011-2012 and decreased by 1.6% from 2012-2013. The growth in the Packaging product category net sales during the five year period is primarily attributable to organic growth at the U.S. Distribution and Canada Distribution businesses and growth at UGS. The decline in the Facility Supplies product category net sales during the five year period occurred at both the U.S. Distribution and Canada Distribution businesses and reflects primarily the effect of various restructuring initiatives in the facility supplies business and the focus on customer profitability.
Operating Income Trends: During the last five years operating income has decreased by $11.7 million, or 22.5%, from $51.9 million for fiscal 2009 to $40.2 million for fiscal 2013. The decrease in operating income is primarily a result of the following: (i) the percentage of cost of products sold (excluding depreciation and amortization) to net sales rose slightly, primarily attributable to competitive pricing pressure in the print market offset in part by a sales mix change from the Print product category to the Packaging product category, (ii) higher distribution expenses of $23.0 million, or 10.1%, reflecting primarily the impact of inflation during the period on wages and benefits, transportation and facility related costs, offset in part by restructuring initiatives which were implemented to reduce the distribution cost structure, (iii) lower selling and administrative expenses of $29.0 million, or 6.9%, due primarily to lower sales commission costs of $16.9 million, lower bad debt expense of $14.3 million and the impact of restructuring programs which were established primarily to lower the cost of Unisource’s operating model to respond to the secular decline in the print market offset in part by the impact of inflation. The decrease in commission costs reflects primarily changes made to commission plans to respond to market changes and the decline in bad debt expense reflects primarily an improvement in the U.S. economy, (iv) lower restructuring (gains) expenses of $10.8 million, (v) an increase in depreciation and amortization expense of $8.7 million, resulting primarily from higher levels of investment in internal-use software and transportation equipment and (vi) an increase in merger expenses of $14.3 million, resulting from the Merger. During the period from January 3, 2009 to December 31, 2013, Unisource’s workforce decreased by 810 employees or 16.0%.
Total operating loss for the three months ended March 31, 2014 was $4.2 million compared to operating income for the three months ended March 30, 2013 of $1.4 million. Unisource’s total operating margin was
 
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(0.5)% for the three months ended March 31, 2014 and 0.1% for the three months ended March 30, 2013. For the fiscal year ended December 31, 2013, Unisource’s total operating income was $40.2 million, a decrease of 15.4% from $47.5 million for the fiscal year ended December 29, 2012. Unisource’s total operating margin was 1.0% for the fiscal year ended December 31, 2013 compared to 1.2% for the fiscal year ended December 29, 2012. Total operating income for the fiscal year ended December 29, 2012 increased by $14.6 million, or 44.4%, compared to the fiscal year ended December 31, 2011. Unisource’s total operating margin was 1.2% for the fiscal year ended December 29, 2012 compared to 0.8% for the fiscal year ended December 31, 2011.
Adjusted EBITDA Trends: The increase in Adjusted EBITDA of $1.7 million, or 17.7%, from the three months ended March 30, 2013 to the three months ended March 31, 2014 was primarily attributable to the following: (i) lower selling and administrative expenses of $6.9 million, or 6.8%, (ii) lower other expense, net of $0.6 million, and (iii) partially offset by a 5.0% decline in net sales. The decrease in Adjusted EBITDA of $4.5 million or 4.9% from fiscal 2012 to fiscal 2013 was primarily attributable to the following: (i) higher distribution expenses of $10.3 million or 4.3%, (ii) higher LIFO expense of $3.7 million, and (iii) lower selling and administrative expenses of $1.6 million or 0.4%. The increase in Adjusted EBITDA of $9.0 million or 10.9% from fiscal 2011 to fiscal 2012 was primarily attributable to the following: (i) lower selling and administrative expenses of $16.1 million, or 3.9%, (ii) lower distribution expenses of $12.4 million or 4.9%, (iii) lower LIFO expense of $2.3 million and (iv) lower other (income)/expense, net of $1.1 million, partially offset by a 4.7% decline in net sales. For fiscal 2012, cost of products sold (excluding depreciation and amortization) of $3,405.6 million decreased by $186.3 million, or 5.2%, compared with fiscal 2011 and compared to a $204.5 million, or 4.7%, decrease in net sales during the same period. See “Summary Historical Consolidated Financial Data of Unisource” for a reconciliation of Adjusted EBITDA to net income (loss) determined in accordance with GAAP.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as substitutes for analysis of Unisource’s results as reported under GAAP. For example, Adjusted EBITDA:
 
 	•	 	does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on Unisource’s debt;	
 
 	•	 	does not reflect Unisource’s income tax expenses or the cash requirements to pay its taxes;	
 
 	•	 	although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and the foregoing metrics do not reflect any cash requirements for such replacements; and	
 
 	•	 	does not reflect costs associated with restructuring initiatives implemented over multiple fiscal periods. Further, Unisource could initiate similar restructuring initiatives in future periods.	
Other companies in Unisource’s industry may calculate Adjusted EBITDA differently than Unisource, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to Unisource to invest in the growth of its business. Unisource compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA for supplemental purposes. Additionally, Adjusted EBITDA is not an alternative measure of financial performance under GAAP and therefore should be considered as a supplement to net income (loss) and other performance measures such as operating income or net cash provided by operating activities and not as an alternative to such GAAP measures.
Free Cash Flow Trends: Unisource generated (used) free cash flow of approximately $(19.5) million, $(8.1) million and $18.6 million in fiscal 2013, 2012 and 2011, respectively, and $34.2 million and $13.3 million during the three months ended March 31, 2014 and March 30, 2013, respectively. The increase in free cash flow from the three months ended March 30, 2013 to the three months ended March 31, 2014 was primarily attributable to a $19.8 million increase in cash provided by operations, and by a decrease in cash used in capital projects of $1.1 million. The decrease in free cash flow from fiscal 2012 to fiscal 2013 was primarily attributable to a $19.6
 
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million decrease in cash provided by operations, and partially offset by a decrease in cash used in capital projects of $8.2 million. The decrease from fiscal 2011 to fiscal 2012 was primarily due to $22.8 million of less cash generated by operations and an increase in cash used in capital projects of $3.9 million.
The following table reconciles free cash flow to cash provided by (used in) operations.

 	  	Three Months Ended	 	 	Fiscal Years Ended	 	
 	  	March 31,
2014	 	 	March 30,
2013	 	 	December 31,
2013	 	 	December 29,
2012	 	 	December 31,
2011	 	
 	  	 	 	 	(Dollars in millions)	 	
Cash provided by (used in) operations	  	$	37.6	  	 	$	17.8	  	 	$	(1.5	) 	 	$	18.1	  	 	$	40.9	  	
Less: Cash used in capital projects	  	 	(3.4	) 	 	 	(4.5	) 	 	 	(18.0	) 	 	 	(26.2	) 	 	 	(22.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Free cash flow generated (used)	  	$	34.2	  	 	$	13.3	  	 	$	(19.5	) 	 	$	(8.1	) 	 	$	18.6	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Free cash flow has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of Unisource’s results as reported under GAAP. Other companies in Unisource’s industry may calculate free cash flow differently than Unisource, limiting its usefulness as a comparative measure. Because of these limitations, free cash flow should not be considered as a measure of discretionary cash available to Unisource to invest in the growth of its business.
Results of Operations
Overview
The financial information and discussions concerning Unisource have been derived from Unisource’s unaudited condensed consolidated financial statements for the three months ended March 31, 2014 and March 30, 2013 and Unisource’s consolidated financial statements as of December 31, 2013 and December 29, 2012 and for each of the fiscal years ended December 31, 2013, December 29, 2012 and December 31, 2011 found elsewhere in this prospectus and have been prepared on a historical basis, with Unisource operating as a stand-alone business.
With respect to the planned Merger, in accordance with the accounting rules and regulations set forth in ASC 805, “Business Combinations,” Unisource has been deemed the accounting acquiree. Unisource was determined to be the acquiree based primarily on the following: (i) relative voting interest of the new common shareholders on the effective date of the Merger, (ii) composition of the new board of directors and (iii) the composition of the new senior management team. As a result, Unisource’s assets and liabilities will be adjusted to fair value as of the Closing Date. As such, Unisource’s assets and liabilities will be revalued and such changes could be material. See “Summary Unaudited Pro Forma Condensed Combined Financial Data” included elsewhere in this prospectus. Additionally, changes in how Unisource is operated, as well as the accounting policies which are followed by SpinCo as the surviving corporation, could have had a material effect on Unisource’s results of operations and financial condition if they were in effect during the historical periods for which Unisource has provided financial information.
 
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Comparison of Results of Operations for the three months ended March 31, 2014 and March 30, 2013
The following discussion compares the consolidated operating results of Unisource for the three months ended March 31, 2014 and March 30, 2013.

 	  	Three months ended	 	
 	  	March 31,
2014	 	 	March 30,
2013	 	 	Increase (decrease)	 	
 	  	(Dollars in millions)	 	 	 	 	
Net sales	  	$	930.7	  	 	$	979.4	  	 	$	(48.7	) 	 	 	(5.0	)% 	
Cost of products sold (excluding depreciation and amortization)	  	 	763.5	  	 	 	805.5	  	 	 	(42.0	) 	 	 	(5.2	) 	
Distribution expenses	  	 	62.6	  	 	 	63.1	  	 	 	(0.5	) 	 	 	(0.8	) 	
Selling and administrative expenses	  	 	94.6	  	 	 	101.5	  	 	 	(6.9	) 	 	 	(6.8	) 	
Depreciation and amortization	  	 	6.1	  	 	 	6.2	  	 	 	(0.1	) 	 	 	(1.6	) 	
Restructuring expenses	  	 	0.2	  	 	 	0.8	  	 	 	(0.6	) 	 	 	(75.0	) 	
Merger expenses	  	 	7.9	  	 	 	0.2	  	 	 	7.7	  	 	 	*	  	
Asset impairments	  	 	—  	  	 	 	0.1	  	 	 	(0.1	) 	 	 	*	  	
Other expense, net	  	 	—  	  	 	 	0.6	  	 	 	(0.6	) 	 	 	*	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating (loss) income	  	 	(4.2	) 	 	 	1.4	  	 	 	(5.6	) 	 	 	*	  	
Interest expense, net	  	 	6.3	  	 	 	7.0	  	 	 	(0.7	) 	 	 	(10.0	) 	
Gain on sale of equity-method investments	  	 	(6.6	) 	 	 	—  	  	 	 	(6.6	) 	 	 	*	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss before income taxes	  	 	(3.9	) 	 	 	(5.6	) 	 	 	1.7	  	 	 	30.4	  	
Income tax (benefit) expense	  	 	(0.3	) 	 	 	0.3	  	 	 	(0.6	) 	 	 	*	  	
Equity earnings of affiliates, net of taxes	  	 	(0.2	) 	 	 	(0.3	) 	 	 	0.1	  	 	 	33.3	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	  	$	(3.4	) 	 	$	(5.6	) 	 	$	2.2	  	 	 	39.3	  	

*	not meaningful	
Net sales: For the three months ended March 31, 2014, net sales of $930.7 million decreased $48.7 million, or 5.0%, compared to the three months ended March 30, 2013. The decrease in net sales was primarily a result of a volume decrease of 3.5% and an unfavorable foreign currency effect of approximately $17.1 million, or 1.7%, due to the weakening of the Canadian dollar against the U.S. dollar, partially offset in part by a price improvement of 0.2%. In addition, the three months ended March 30, 2013 included one additional shipping day compared to the three months ended March 31, 2014 as Unisource changed its reporting period from a fiscal period-end to a calendar period-end effective December 31, 2013. Based on the net sales during the three months ended March 31, 2014, the average net sales per shipping day approximated $14.8 million. The volume decrease was also driven by adverse winter weather conditions in the U.S. during the 2014 first quarter. The components of the change in net sales for the three months ended March 31, 2014 compared to the three months ended March 30, 2013 include a decrease in Print product category net sales of $41.0 million, or 7.7%, a decrease in Packaging product category net sales of $0.9 million, or 0.3%, a decrease in Facility Supplies product category net sales of $9.8 million, or 6.0%, and an increase in Other product category net sales of $3.0 million, or 20.5%. Further details on the components of changes in net sales are discussed in the “—Supplementary Information on Product Category Results” below.
Cost of products sold (excluding depreciation and amortization): For the three months ended March 31, 2014, cost of products sold (excluding depreciation and amortization) of $763.5 million decreased by $42.0 million, or 5.2%, compared to the three months ended March 30, 2013, and compared with a decline in net sales of $48.7 million, or 5.0%, during the same period. Cost of products sold (excluding depreciation and amortization) decreased at a slightly higher percentage than net sales reflecting primarily a mix shift in net sales from the Print product category to the Packaging and Other product categories. The percentage of cost of products sold (excluding depreciation and amortization) to net sales for each of Unisource’s Print, Packaging and Facility Supplies product categories were consistent for the three months ended March 31, 2014 compared to the three months ended March 30, 2013.
 
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Distribution expenses: For the three months ended March 31, 2014, distribution expenses of $62.6 million decreased by $0.5 million, or 0.8%, versus the comparable period of 2013. The decrease was primarily a result of decreases in wages and benefits of $1.9 million, partially offset by higher freight and delivery expense of $1.4 million. The decrease in wages and benefits reflects primarily the impact of additional vacation days taken in the United States of $0.8 million and a favorable impact on expenses of approximately $0.7 million due to the weakening of the Canadian dollar against the U.S. dollar.
Selling and administrative expenses: For the three months ended March 31, 2014, selling and administrative expenses of $94.6 million decreased by $6.9 million, or 6.8%, versus the comparable period of 2013. The decrease in selling and administrative expenses reflects primarily lower salary and benefit costs of $1.8 million, lower management and sales incentives of $1.7 million, lower commission expense of $1.6 million, and lower bad debt expense of $1.3 million. The lower salaries and benefits expense reflects primarily the reduction in headcount associated with the restructuring programs that were implemented during 2013 and a favorable impact from foreign exchange fluctuations in the Canadian Distribution business of approximately $0.9 million. The decrease in commission expense was driven primarily by lower sales volumes. The lower bad debt expense reflects primarily the improved credit risk ratings of its customer receivables and a reduction in the losses associated with those risk categories.
Restructuring expenses: The restructuring expense of $0.2 million for the three months ended March 31, 2014 related to the closure of the Sweden operation. Unisource concluded that this operation, which had been acquired for future packaging manufacturing, research and development, was not economically viable. The restructuring charge primarily represents additional lease termination charges.
The restructuring expense of $0.8 million for the three months ended March 30, 2013 related to two restructuring programs which included the North American shared service model and the closure of the Sweden operation. Restructuring charges of $0.4 million were recorded in connection with the North American shared service model program, including $0.5 million of severance and personnel costs relating to the elimination of 28 positions and a gain of $0.2 million upon the execution of an early surrender agreement to terminate a lease. The actions taken with respect to this program included primarily restructuring activities involving sales management and support in both the U.S. Distribution and Canada Distribution businesses and in the supply chain functions in the Canada Distribution business. The second restructuring program for the three months ended March 30, 2013 related to the closure of the Sweden operation. Restructuring charges of $0.4 million were recorded in connection with the closure of the Sweden operation, including $0.1 million of personnel costs.
Merger expenses: Unisource incurred merger expenses relating to the Merger of $7.9 million for the three months ended March 31, 2014 and $0.2 million for the three months ended March 30, 2013. These costs included legal, accounting, tax, consulting and other professional services.
Interest expense: For the three months ended March 31, 2014, interest expense of $6.3 million decreased by $0.7 million versus the comparable period of 2013 primarily due to the reduction in the outstanding principal balances under real estate capital leases. Interest expense under the Senior Credit Facility was $2.4 million for the three months ended March 31, 2014 versus $2.7 million in the comparable period of 2013.
Gain on sale of equity – method investments: During the three months ended March 31, 2014, Unisource recognized a gain of $6.6 million on the sale of its 50% ownership interest in two real estate joint ventures. Unisource received proceeds totaling $6.4 million for the sale of the real estate joint ventures, net of a settlement for the asset retirement obligation associated with one of the sold properties of $0.9 million. The settlement of the asset retirement obligation of $0.9 million resulted in a loss of $0.5 million recorded in selling and administrative expenses in the condensed consolidated statements of operations (refer to Note 5 of Unisource’s condensed consolidated financial statements for the three months ended March 31, 2014).
Income taxes: For the three months ended March 31, 2014, Unisource recognized an income tax benefit of $0.3 million versus income tax expense of $0.3 million in the comparable period of 2013. The income tax benefit
 
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for the three months ended March 31, 2014 primarily related to the loss before income taxes offset by the release of a deferred tax asset related to the cancelation of the stock compensation program, the disallowance of Merger related costs in 2014 and a gain on the sale of two real estate joint ventures. The provision for income tax expense for the three months ended March 30, 2013 is predominantly related to minimum tax liability requirements in certain states.
Comparison of Results of Operations for the Fiscal Years Ended December 31, 2013 and December 29, 2012
The following discussion compares the consolidated operating results of Unisource for the fiscal years ended December 31, 2013 and December 29, 2012.

 	  	Fiscal Years Ended	 	
 	  	December 31,
2013	 	 	December 29,
2012	 	 	Increase (decrease)	 	
 	  	(Dollars in millions)	 	 	 	 	
Net sales	  	$	4,089.1	  	 	$	4,123.3	  	 	$	(34.2	) 	 	 	(0.8	)% 	
Cost of products sold (excluding depreciation and amortization)	  	 	3,370.4	  	 	 	3,405.6	  	 	 	(35.2	) 	 	 	(1.0	) 	
Distribution expenses	  	 	250.3	  	 	 	240.0	  	 	 	10.3	  	 	 	4.3	  	
Selling and administrative expenses	  	 	391.3	  	 	 	392.9	  	 	 	(1.6	) 	 	 	(0.4	) 	
Depreciation and amortization	  	 	25.1	  	 	 	25.4	  	 	 	(0.3	) 	 	 	(1.2	) 	
Restructuring (gains) expenses	  	 	(3.4	) 	 	 	6.6	  	 	 	(10.0	) 	 	 	*	  	
Merger expenses	  	 	14.3	  	 	 	—  	  	 	 	14.3	  	 	 	*	  	
Asset impairments	  	 	0.4	  	 	 	4.9	  	 	 	(4.5	) 	 	 	(91.8	) 	
Other expense, net	  	 	0.5	  	 	 	0.4	  	 	 	0.1	  	 	 	25.0	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	40.2	  	 	 	47.5	  	 	 	(7.3	) 	 	 	(15.4	) 	
Interest expense, net	  	 	27.4	  	 	 	28.3	  	 	 	(0.9	) 	 	 	(3.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes	  	 	12.8	  	 	 	19.2	  	 	 	(6.4	) 	 	 	(33.3	) 	
Income tax expense (benefit)	  	 	(228.5	) 	 	 	15.2	  	 	 	(243.7	) 	 	 	*	  	
Equity earnings of affiliates, net of taxes	  	 	(1.1	) 	 	 	(1.1	) 	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	$	242.4	  	 	$	5.1	  	 	$	237.3	  	 	 	*	  	

*	not meaningful	
Net sales: For fiscal 2013, net sales of $4,089.1 million decreased by $34.2 million, or 0.8%, compared to fiscal 2012. The decrease in net sales was primarily a result of a volume decrease of 1.0%, offset in part by a price improvement of 0.2%. The components of the change in net sales for fiscal 2013 compared to fiscal 2012 include a decrease in Print product category net sales of $122.6 million, or 5.2%, an increase in Packaging product category net sales of $63.6 million, or 5.9%, an increase in Facility Supplies product category net sales of $3.6 million, or 0.5%, and an increase in Other product category net sales of $21.2 million, or 52.0%. Further details on the components of changes in net sales are discussed in the “—Supplementary Information on Product Category Results” below.
Cost of products sold (excluding depreciation and amortization): For fiscal 2013, cost of products sold (excluding depreciation and amortization) of $3,370.4 million decreased by $35.2 million, or 1.0%, compared with fiscal 2012, and compared with a decline in net sales of $34.2 million, or 0.8%, during the same period. Cost of products sold (excluding depreciation and amortization) decreased at a slightly higher percentage than net sales reflecting primarily a mix shift in net sales from the Print product category to the Packaging and Other product categories. The percentage of cost of products sold (excluding depreciation and amortization) to net sales for Unisource’s Packaging and Facility Supplies product categories rose slightly due to competitive pricing pressures and the similar percentage for the Print product category was consistent for fiscal 2013 compared to fiscal 2012.
 
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Distribution expenses: For fiscal 2013, distribution expenses of $250.3 million increased by $10.3 million, or 4.3%, compared to fiscal 2012. The increase was primarily a result of increases in wages, benefits and temporary labor expenses of $4.2 million, an increase in warehouse rent and facility costs of $2.1 million and higher freight and delivery expense of $3.6 million. The increase in wages, benefits and temporary labor expenses reflects primarily the impact of Unisource’s annual compensation merit increase, which occurred primarily in January 2013. The increase in rent expense reflects primarily the impact of annual rent escalation clauses, the addition of a new warehouse distribution facility in Toronto, Ontario, Canada and a reduction in sublease rental income as a result of the termination of a sublease agreement, offset in part by a decrease in rent expense associated with surplus properties. The increase in facility costs primarily reflects higher property and utility costs.
Selling and administrative expenses: For fiscal 2013, selling and administrative expenses of $391.3 million decreased by $1.6 million, or 0.4%, compared to fiscal 2012. The decrease in selling and administrative expenses reflects primarily lower management and sales incentives of $3.5 million, lower travel and entertainment expenditures of $3.7 million and lower advertising and marketing expenses of $1.5 million, offset by higher bad debt expense of $6.2 million and higher commission expense of $1.3 million. The decrease in travel and entertainment was driven by management initiatives to reduce non-critical travel, entertainment and meeting expenses. Bad debt expense changed from a credit of $(2.6) million for fiscal 2012 to an expense of $3.6 million for fiscal 2013. The increase in bad debt expense reflects primarily the impact of the decrease in the allowance for doubtful accounts recorded in fiscal 2012. The fiscal 2012 reduction in the allowance for doubtful accounts resulted primarily from an improvement in the credit risk ratings of customer receivables and a reduction in the losses associated with those risk categories.
Restructuring (gains) expenses: The net restructuring gain of $3.4 million for fiscal 2013 related to two restructuring programs which included the North American shared service model and the closure of the Sweden operation. A net restructuring gain of $4.4 million was recorded in connection with the North American shared service model program and included gains related to the closure of four properties totaling $7.6 million. Charges included $1.6 million of severance and personnel costs relating to the elimination of 60 positions, $1.2 million of professional fees and other costs and $0.4 million relating to facility closure and consolidation costs. The actions taken with respect to this program included primarily restructuring activities involving sales management and support functions in both the U.S. Distribution and Canada Distribution businesses and in the supply chain functions in the Canada Distribution business. The second restructuring program for fiscal 2013 related to the closure of the Sweden operation. Unisource concluded that this operation, which had been acquired for future packaging manufacturing, research and development, was not economically viable. Restructuring charges of $1.0 million were recorded in connection with the closure of the Sweden operation, including $0.3 million of personnel costs relating to the elimination of 8 positions and $0.7 million relating primarily to the facility closure and consolidation costs.
The restructuring expense of $6.6 million for fiscal 2012 related to the North American shared service model program and included charges of $5.7 million for severance and personnel costs due to the elimination of 99 positions, charges of $0.8 million for professional fees and other costs and $0.1 million of facility closure and consolidation costs. The actions taken with respect to this program occurred at both the U.S. Distribution and Canada Distribution businesses and affected the sales and sales support, distribution and corporate back-office functions. The actions included the centralization of functions within the Canada Distribution business and the transfer of other functions such as credit, cash application, and certain information technology support functions to the U.S. Distribution business.
Merger expenses: For fiscal 2013, Unisource incurred merger expenses of $14.3 million relating to the pending Merger. These costs were primarily legal, accounting, tax, consulting and other professional services.
Interest expense: For fiscal 2013, interest expense of $27.4 million decreased by $0.9 million compared to fiscal 2012 primarily due to the reduction in the outstanding principal balances under real estate capital leases. Interest expense under the Senior Credit Facility was $10.8 million for fiscal 2013 versus $10.9 million in fiscal 2012.
 
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Income taxes: For fiscal 2013, Unisource recognized an income tax benefit of $228.5 million compared to income tax expense of $15.2 million in fiscal 2012. The income tax benefit in fiscal 2013 primarily related to the release of substantially all of Unisource’s valuation allowance associated with its U.S. federal and state deferred tax assets. The provision for income tax expense for fiscal 2012 included approximately $16.7 million of income tax expense related to the establishment of a full valuation allowance against the net deferred tax assets in Canada.
Comparison of Results of Operations for the Fiscal Years Ended December 29, 2012 and December 31, 2011
The following discussion compares the consolidated operating results of Unisource for the fiscal years ended December 29, 2012 and December 31, 2011.

 	  	Fiscal Years Ended	 	
 	  	December 29,
2012	 	 	December 31,
2011	 	 	Increase (decrease)	 	
 	  	(Dollars in millions)	 	
Net sales	  	$	4,123.3	  	 	$	4,327.8	  	 	$	(204.5	) 	 	 	(4.7	)% 	
Cost of products sold (excluding depreciation and amortization)	  	 	3,405.6	  	 	 	3,591.9	  	 	 	(186.3	) 	 	 	(5.2	) 	
Distribution expenses	  	 	240.0	  	 	 	252.4	  	 	 	(12.4	) 	 	 	(4.9	) 	
Selling and administrative expenses	  	 	392.9	  	 	 	409.0	  	 	 	(16.1	) 	 	 	(3.9	) 	
Depreciation and amortization	  	 	25.4	  	 	 	24.5	  	 	 	0.9	  	 	 	3.7	  	
Restructuring expenses	  	 	6.6	  	 	 	14.6	  	 	 	(8.0	) 	 	 	(54.8	) 	
Asset impairments	  	 	4.9	  	 	 	1.0	  	 	 	3.9	  	 	 	390.0	  	
Other expense, net	  	 	0.4	  	 	 	1.5	  	 	 	(1.1	) 	 	 	(73.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	47.5	  	 	 	32.9	  	 	 	14.6	  	 	 	44.4	  	
Interest expense, net	  	 	28.3	  	 	 	66.7	  	 	 	(38.4	) 	 	 	(57.6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income taxes	  	 	19.2	  	 	 	(33.8	) 	 	 	53.0	  	 	 	*	  	
Income tax expense (benefit)	  	 	15.2	  	 	 	(5.5	) 	 	 	20.7	  	 	 	*	  	
Equity earnings of affiliates, net of taxes	  	 	(1.1	) 	 	 	(1.2	) 	 	 	0.1	  	 	 	(8.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	$	5.1	  	 	$	(27.1	) 	 	$	32.2	  	 	 	*	  	

*	not meaningful	
Net sales: For fiscal 2012, net sales of $4,123.3 million decreased by $204.5 million, or 4.7%, compared to fiscal 2011. The decrease in net sales was primarily a result of a volume decrease of 5.2% offset in part by price improvement of 0.5%. The components of the change in net sales for fiscal 2012 compared with fiscal 2011 include a decline in Print product category net sales of $159.6 million, or 6.4%, an increase in Packaging product category net sales of $52.9 million, or 5.2%, a decrease in Facility Supplies product category net sales of $120.9 million, or 15.4%, and an increase in Other product category net sales, reflecting primarily the third party logistics business of $23.1 million, or 130.5%. Approximately $105.4 million, or 51.5%, of the decline in net sales reflects the loss of a single customer (the “Cold Chain Customer”) for which Unisource was providing procurement, cold chain storage and delivery services to its retail locations throughout Canada. Further details on the components of changes in net sales are discussed in “—Supplementary Information on Product Category Results” below.
Cost of products sold (excluding depreciation and amortization): For fiscal 2012, cost of products sold (excluding depreciation and amortization) of $3,405.6 million decreased by $186.3 million, or 5.2%, compared with fiscal 2011, and compared to a $204.5 million, or 4.7%, decrease in net sales during the same period. Approximately $84.2 million, or 45.2%, of the decrease was attributable to the loss of the Cold Chain Customer. Cost of products sold (excluding depreciation and amortization) decreased at a higher percentage than net sales primarily resulting from a mix shift in sales to the Packaging product category. The percentage of the cost of products sold (excluding depreciation and amortization) to net sales for Unisource’s Print, Packaging and Facility Supplies product categories were generally consistent for fiscal 2012 compared to fiscal 2011.
 
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Distribution expenses: For fiscal 2012, distribution expenses of $240.0 million decreased by $12.4 million, or 4.9%, compared to fiscal 2011. The decrease in distribution expenses includes approximately $15.4 million associated with the loss of the Cold Chain Customer, which reduced delivery and warehouse costs at the Canada Distribution business. Partially offsetting the decrease of $15.4 million was an increase of $3.6 million in distribution expenses consisting of higher wages and benefit expenses of $3.1 million and an increase in warehouse rent of $1.5 million offset in part by a $1.0 million reduction in workers’ compensation charges.
Selling and administrative expenses: For fiscal 2012, selling and administrative expenses of $392.9 million decreased by $16.1 million, or 3.9%, compared to fiscal 2011. Approximately $1.2 million of the decrease in selling and administrative expenses was associated with the loss of the Cold Chain Customer. The remaining decrease in selling and administrative expenses reflects primarily the reduction in wages and salaries of $2.8 million associated with Unisource’s restructuring initiatives during 2012 and 2011, a decrease in professional fees of $2.4 million and a decrease in bad debt expense of $10.3 million. The year-over-year decrease in bad debt expense resulted primarily from an improvement in the credit risk ratings of customer receivables and a reduction in the losses associated with those risk categories. The above reductions were partially offset by an increase in management incentives of $1.5 million associated with the cost reduction initiatives.
Restructuring expenses: The restructuring expenses of $14.6 million for fiscal 2011 primarily related to three restructuring programs relating to the U.S. sales reorganization, the North American shared service model and the cold chain storage programs. The U.S. sales reorganization program included a restructuring charge of $0.9 million, which reflected severance and personnel costs relating to the elimination of 43 positions. The activities involved in this program were primarily related to the reorganization of the product and equipment specialist groups and certain sales management and sales support functions.
The North American shared service model program included a restructuring expense of $12.0 million for fiscal 2011, including $11.5 million of severance and personnel costs, relating to the elimination of 197 positions and $0.5 million of professional fees and other costs. The sales, sales support, distribution and back-office functions were realigned and consolidated at the U.S. Distribution and Canada Distribution businesses and facilities were closed and consolidated at the U.S. Distribution and Graphic businesses.
In the third quarter of 2010, the Canada Distribution business entered into an arrangement with the Cold Chain Customer to provide its procurement, cold storage and delivery services to the customer’s retail stores located throughout Canada. In the second quarter of 2011, Unisource concluded that the existing arrangement was not economically viable, and Unisource and the customer mutually agreed to transition and terminate the arrangement. As a result, Unisource decided to exit the delivery part of the cold storage service offering. In connection with this program, Unisource recorded in fiscal 2011 a restructuring expense of $1.6 million including $0.9 million of severance and personnel costs relating to the elimination of 124 positions and $0.7 million relating to contract termination and other costs.
Asset impairments: For fiscal 2012 and 2011, Unisource recorded asset impairments of $4.9 million and $1.0 million, respectively. The fiscal 2012 charge was related to the write-down of the net book value associated with the cold storage assets located at three of the Canada Distribution business locations. In the prior year, Unisource decided to exit the service delivery aspect of the cold chain service offering and after reviewing alternative uses, Unisource decided not to pursue its initiative to provide a warehousing only third party cold storage service at the end of 2012. Also in 2012, Unisource impaired $1.0 million of packaging and related equipment for which it was determined would not be used in the future operations. During the fourth quarter of fiscal 2011, Unisource recorded impairment charges of $1.0 million related to the write-down of customer relationship and trade name intangibles associated with an acquisition by the Canada Distribution business, as a result of the decision to integrate the product lines and operations into its existing business and to exit the use of separate trade names and marketing collateral.
Interest expense: For fiscal 2012, interest expense of $28.3 million decreased by $38.4 million, or 57.6%, versus fiscal 2011. Approximately $36.4 million of the decrease is a result of the partial pay down of the PIK
 
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notes and the conversion of the remainder of the PIK notes to Redeemable preferred stock on December 5, 2011 (refer to Notes 7 and 10 to Unisource’s consolidated financial statements for the fiscal year ended December 31, 2013). Interest expense in fiscal 2011 includes a $0.9 million write-off of deferred financing cost associated with the refinancing of Unisource’s new Senior Credit Facility, which was executed on March 15, 2011.
Income taxes: For fiscal 2012, income tax expense was $15.2 million compared to an income tax benefit of $5.5 million in fiscal 2011. The provision for income tax expense for fiscal 2012 included approximately $16.7 million of income tax expense due to the establishment of a full valuation allowance against the net deferred tax assets in Canada. The income tax benefit in fiscal 2011 was primarily due to the loss before income taxes.
Supplementary Information on Product Category Results
The tables below disclose selected supplemental information by major product category in order to provide consistency with the information presented by SpinCo in “Management’s Discussion and Analysis of Financial Condition and Results of Operation of xpedx.” Such information has been reconciled to Unisource’s consolidated results. Management of SpinCo expects to report segments by major product category on a combined company basis after the closing of the Transactions, and thus expects, at a minimum, to report segments of Print, Packaging and Facility Solutions as a combined company.
Overview
Unisource product categories are based primarily on product designations by its U.S. Distribution and Canada Distribution businesses. Unisource’s Graphic, Rollsource and PaperPlus businesses sell primarily items in the Print product category and UGS sells products primarily in the Packaging product category. The Other product category is primarily offered by the U.S. Distribution business. Product category expenses are calculated based on specific identification of expenses when available. Expenses that are not able to be specifically identified were allocated based on what Unisource believes are reasonable drivers for such expenses. Variable warehouse expenses were allocated based on a combination of the number and complexity of the product lines ordered. Delivery expenses were allocated based on a combination of the number of pallets and distance from the distribution center and storage expenses were allocated based on the pallet positions and time the product occupied space in the warehouses. Selling expenses that were not specifically identifiable were allocated based on the sales support expenses that were specifically identifiable. Corporate expenses were allocated based on net sales except for certain portions of credit which were specifically identifiable to the product category they support. Gains related primarily to the sale of real estate and merger expenses were not allocated to individual product categories. Such information has been reconciled to Unisource’s consolidated results.
Net Sales
The table below presents net sales by product category reconciled to the consolidated totals.

 	 	Three months ended	 	 	 	 	 	Fiscal years ended	 	
 	 	March 31,
2014	 	 	March 30,
2013	 	 	Increase/
(Decrease)	 	 	Increase/
(Decrease)	 	 	December 31,
2013	 	 	December 29,
2012	 	 	Increase /
(Decrease)	 	 	Increase /
(Decrease)	 	 	December 31,
2011	 	 	Increase /
(Decrease)	 	 	Increase /
(Decrease)	 	
 	 	(Dollars in Millions)	 	
Net sales	 				 				 				 				 				 				 				 				 				 				 				
Print	 	$	492.0	  	 	$	533.0	  	 	$	(41.0	) 	 	 	(7.7	)% 	 	$	2,223.5	  	 	$	2,346.1	  	 	$	(122.6	) 	 	 	(5.2	)% 	 	$	2,505.7	  	 	$	(159.6	) 	 	 	(6.4	)% 	
Packaging	 	 	268.9	  	 	 	269.8	  	 	 	(0.9	) 	 	 	(0.3	) 	 	 	1,138.2	  	 	 	1,074.6	  	 	 	63.6	  	 	 	5.9	  	 	 	1,021.7	  	 	 	52.9	  	 	 	5.2	  	
Facility Supplies	 	 	152.2	  	 	 	162.0	  	 	 	(9.8	) 	 	 	(6.0	) 	 	 	665.4	  	 	 	661.8	  	 	 	3.6	  	 	 	0.5	  	 	 	782.7	  	 	 	(120.9	) 	 	 	(15.4	) 	
Other	 	 	17.6	  	 	 	14.6	  	 	 	3.0	  	 	 	20.5	  	 	 	62.0	  	 	 	40.8	  	 	 	21.2	  	 	 	52.0	  	 	 	17.7	  	 	 	23.1	  	 	 	130.5	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total net sales	 	$	930.7	  	 	$	979.4	  	 	$	(48.7	) 	 	 	(5.0	)% 	 	$	4,089.1	  	 	$	4,123.3	  	 	$	(34.2	) 	 	 	(0.8	)% 	 	$	4,327.8	  	 	$	(204.5	) 	 	 	(4.7	)% 	
	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
Comparison of the three months ended March 31, 2014 and March 30, 2013
Print product category net sales for the three months ended March 31, 2014 decreased by $41.0 million, or 7.7%, compared to the three months ended March 30, 2013. The decrease in net sales was primarily a result of a
 
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volume decrease of $33.3 million, or 6.2%, an unfavorable foreign currency effect of approximately $6.4 million, or 1.2%, and a price decline of $1.3 million, or 0.3%. Volume decreases in the Print product category were impacted by the overall decline in the print market. Volume decreased $8.8 million, or 2.6%, in the U.S. Distribution and Canada Distribution businesses, primarily driven by decreased sales to existing customers in the product groupings of copy paper, coated paper and uncoated paper. The sales decrease in the Canadian Distribution business was also impacted by an unfavorable foreign currency effect of approximately $6.4 million due to the weakening of the Canadian dollar against the U.S. dollar. Volume at Graphic decreased $24.8 million, or 16.4%, compared to the three months ended March 30, 2013 primarily due to decreased sales to existing customers.
Packaging product category net sales for the three months ended March 31, 2014 decreased by $0.9 million, or 0.3%, compared to the three months ended March 30, 2013. The decrease in net sales was primarily a result of an unfavorable foreign currency effect of $4.4 million, or 1.6%, partially offset by a volume increase of $3.5 million, or 1.3%. Volume at UGS decreased $4.5 million, or 29.8%, compared to the three months ended March 30, 2013 primarily driven by declining sales related to a single customer. Volume decreased $0.5 million, or 1.0%, in the Canadian Distribution business, further impacted by an unfavorable foreign currency effect of approximately $4.4 million due to the weakening of the Canadian dollar against the U.S. dollar. Offsetting these declines was a volume increase of $8.5 million, or 4.2%, in the U.S. Distribution business which was primarily driven by increased sales to existing customers in the product groupings of corrugated and folding carton consumer goods packaging, packaging films and protective packaging.
Facility Supplies product category net sales for the three months ended March 31, 2014 decreased by $9.8 million, or 6.0%, compared to the three months ended March 30, 2013. The decrease in net sales was primarily a result of an unfavorable foreign currency effect of $6.3 million, or 3.9%, volume decreases of $2.8 million, or 1.7%, and a price decline of $0.7 million, or 0.4%. Volume decreased $8.6 million, or 10.6%, in the Canadian Distribution business primarily driven by decreased sales in the product groupings of food service related products, sanitary maintenance supplies and towel and tissue combined with $6.6 million attributed to the loss of a single customer. The sales decrease in the Canadian Distribution business was also impacted by an unfavorable foreign currency effect of approximately $6.3 million. Volume increases of $5.8 million, or 7.2%, in the U.S. Distribution business was primarily driven by increased sales in the product groupings of towel and tissue and trash can liners. The price decline of 0.4% was primarily related to a shift from the warehouse business to the direct-to-customer business.
Other product category net sales for the three months ended March 31, 2014 increased by $3.0 million, or 20.5%, compared to the three months ended March 30, 2013. The increase in net sales was primarily driven by an increase of $2.8 million, or 26.2%, in the freight brokerage component of the third party logistics business. The growth in net sales reflects Unisource’s initiative to invest in and grow this product category as a complementary offering to its existing customer base as well as to potential new customers.
Comparison of the Fiscal Years Ended December 31, 2013 and December 29, 2012
Print product category net sales for fiscal 2013 decreased by $122.6 million, or 5.2%, compared to fiscal 2012. The decrease in net sales was primarily a result of a volume decrease of $121.5 million, or 5.2%, combined with a price decline of $1.1 million. Volume decreased $62.1 million, or 4.3%, in the U.S. Distribution and Canada Distribution businesses, primarily driven by decreased sales to existing customers in the product groupings of copy paper, coated paper and uncoated paper. Net sales at Graphic decreased $58.7 million, or 8.0%, compared to fiscal 2012 due in part to decreased net sales in Europe of $42.3 million due to customer losses. The Print product category volume decrease was also driven by the overall decline in the print market including decreasing demand for key print products offered by the U.S. Distribution and Canada Distribution businesses and Graphic.
Packaging product category net sales for fiscal 2013 increased by $63.6 million, or 5.9%, compared to fiscal 2012. The increase in net sales was primarily a result of volume increases of $69.1 million, or 6.4%, offset in part by a price decline of $5.5 million, or 0.5%. Volume increased $75.7 million in the U.S. Distribution and Canada
 
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Distribution businesses which was primarily driven by increased sales to both new and existing customers in the product groupings of corrugated and folding carton consumer goods packaging, packaging films and specialty packaging. Volume at UGS decreased $6.5 million, or 10.7%, compared to fiscal 2012 primarily driven by declining sales related to a single customer.
Facility Supplies product category net sales for fiscal 2013 increased by $3.6 million, or 0.5%, compared to fiscal 2012. The increase in net sales was primarily a result of volume increases of $9.6 million, or 1.4%, offset in part by a price decline of $6.0 million, or 0.9%. Volume increases in the U.S. Distribution and Canada Distribution businesses were primarily driven by increased sales in the product groupings of commercial cleaning chemicals and sanitary maintenance supplies partially offset by decreased sales in food service related products and towel and tissue product groupings. The price decline of 0.9% was primarily related to a shift from the warehouse business to the direct-to-customer business.
Other product category net sales for fiscal 2013 increased by $21.2 million, or 52.0%, compared to fiscal 2012. The increase in net sales was primarily driven by an increase of $14.3 million, or 67.5%, in the freight brokerage component of the third party logistics business. The growth in net sales reflects Unisource’s initiative to invest in and grow this product category as a complementary offering to its existing customer base as well as to potential new customers.
Comparison of the Fiscal Years Ended December 29, 2012 and December 31, 2011
Print product category net sales for fiscal 2012 decreased by $159.6 million, or 6.4%, compared to fiscal 2011. The decrease in net sales was primarily a result of a volume decrease of $159.2 million, or 6.4%, combined with a price decline of $0.4 million. Volume decreases in the Print product category were impacted by the overall decline in the print market. Volume at Graphic decreased $91.8 million, or 11.2%, compared to fiscal 2011. The volume decline was due in part to decreased net sales in Europe of $85.8 million primarily due to customer losses and a weak European economy. Volume decreased $73.2 million, or 4.8%, in the U.S. Distribution and Canada Distribution businesses, primarily driven by decreased sales to existing customers in the product groupings of copy paper, uncoated paper and coated paper. Net sales at PaperPlus increased $5.6 million, or 11.4%, compared to fiscal 2011 primarily driven by a competitor closing retail locations located in several of PaperPlus’ market areas.
Packaging product category net sales for fiscal 2012 increased by $52.9 million, or 5.2%, compared to fiscal 2011. The increase in net sales was primarily a result of a volume increase of $48.1 million, or 4.7%, combined with a price improvement of $4.8 million, or 0.5%. Volume increased $54.5 million, or 5.7%, in the U.S. Distribution and Canada Distribution businesses, primarily driven by increased sales to existing customers in the product groupings of corrugated and folding carton consumer goods packaging, food packaging, packaging films and packaging tapes. Volume at UGS decreased $6.4 million, or 9.8%, compared to fiscal 2011 primarily driven by declining sales related to a single customer.
Facility Supplies product category net sales for fiscal 2012 decreased by $120.9 million, or 15.4%, compared to fiscal 2011. The decrease in net sales was primarily a result of a volume decrease of $121.5 million, or 15.5%, offset in part by a price improvement of $0.6 million, or 0.1%. The decrease in net sales was primarily a result of a volume decline of $87.0 million, or 72.0% of the decline in net sales, attributable to the loss of the Cold Chain Customer. Other volume decreases in the U.S. Distribution and Canada Distribution businesses were primarily driven by decreased sales in the product groupings of food service related products and towel and tissue.
Other product category net sales for fiscal 2012 increased by $23.1 million, or 130.5%, compared to fiscal 2011. The increase in net sales was primarily driven by an increase of approximately $18.1 million, or 78.4%, in the freight brokerage component of the third party logistics business.
 
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Operating Income
The table below presents operating income by product category reconciled to the combined consolidated totals.

 	 	Three months ended	 	 	Fiscal years ended	 	
 	 	March 31,
2014	 	 	March 30,
2013	 	 	Increase/
(Decrease)	 	 	Increase/
(Decrease)	 	 	December 31,
2013	 	 	December 29,
2012	 	 	Increase /
(Decrease)	 	 	Increase /
(Decrease)	 	 	December 31,
2011	 	 	Increase /
(Decrease)	 	 	Increase /
(Decrease)	 	
 	 	(Dollars in Millions)	 	
Operating income (loss)	 				 				 				 				 				 				 				 				
Print	 	$	(2.8	) 	 	$	(2.2	) 	 	$	(0.6	) 	 	 	(27.3	)% 	 	$	6.5	  	 	$	19.5	  	 	$	(13.0	) 	 	 	(66.7	)% 	 	$	6.1	  	 	$	13.4	  	 	 	219.7	% 	
Packaging	 	 	6.3	  	 	 	3.4	  	 	 	2.9	  	 	 	85.3	  	 	 	30.6	  	 	 	20.7	  	 	 	9.9	  	 	 	47.8	  	 	 	17.1	  	 	 	3.6	  	 	 	21.1	  	
Facility Supplies	 	 	(0.2	) 	 	 	(0.3	) 	 	 	0.1	  	 	 	33.3	  	 	 	7.4	  	 	 	5.0	  	 	 	2.4	  	 	 	48.0	  	 	 	8.4	  	 	 	(3.4	) 	 	 	(40.5	) 	
Other	 	 	0.9	  	 	 	0.4	  	 	 	0.5	  	 	 	125.0	  	 	 	2.3	  	 	 	1.9	  	 	 	0.4	  	 	 	21.1	  	 	 	1.4	  	 	 	0.5	  	 	 	35.7	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
Total product category operating income	 	 	4.2	  	 	 	1.3	  	 	 	2.9	  	 	 	223.1	  	 	 	46.8	  	 	 	47.1	  	 	 	(0.3	) 	 	 	(0.6	) 	 	 	33.0	  	 	 	14.1	  	 	 	42.7	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
Other (costs) income	 	 	(8.4	) 	 	 	0.1	  	 	 	(8.5	) 	 	 	*	  	 	 	(6.6	) 	 	 	0.4	  	 	 	(7.0	) 	 	 	*	  	 	 	(0.1	) 	 	 	0.5	  	 	 	500.0	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 	 	 	 	 				 	 	 	 	 	 	 	 	 				
Total operating (loss) income	 	$	(4.2	) 	 	$	1.4	  	 	$	(5.6	) 	 	 	*	  	 	$	40.2	  	 	$	47.5	  	 	$	(7.3	) 	 	 	(15.4	)% 	 	$	32.9	  	 	$	14.6	  	 	 	44.4	% 	

*	Not Meaningful	
Comparison of the three months ended March 31, 2014 and March 30, 2013
Print product category operating loss for the three months ended March 31, 2014 increased by $0.6 million, or 27.3%, compared to the three months ended March 30, 2013. The higher operating loss was primarily driven by lower sales volumes offset by decreased selling and administrative expenses of $3.7 million and decreased distribution expense of $0.5 million. The decrease in selling and administrative expenses is primarily attributable to lower costs associated with commissions and other sales force expenses, lower costs related to restructuring initiatives around sales management and support and lower bad debt expenses.
Packaging product category operating income for the three months ended March 31, 2014 increased by $2.9 million, or 85.3%, compared to the three months ended March 30, 2013. The increase was primarily driven by lower selling and administrative expenses of $2.1 million primarily attributable to the restructuring initiatives around sales management and sales support.
Facility Supplies product category operating loss for the three months ended March 31, 2014 decreased by $0.1 million, or 33.3%, compared to the three months ended March 30, 2013. The decrease in operating loss was primarily driven by decreased selling and administrative expenses of $1.6 million offset by lower sales volumes. The decrease in selling and administrative expenses is primarily attributable to the restructuring initiatives around sales management and sales support and lower bad debt expense.
Other product category operating income for the three months ended March 31, 2014 increased by $0.5 million, or 125.0%, compared to the three months ended March 30, 2013. The increase was primarily driven by higher sales volumes offset by increased distribution expenses of $0.4 million and increased selling and administrative expenses of $0.4 million. The increase in distribution expenses is primarily related to higher sales volumes in the Other product category. The increase in selling and administrative expenses was primarily attributable to investments in the sales force and other support functions.
Other (costs) income for the three months ended March 31, 2014 was $(8.4) million and consisted primarily of professional service fees of $7.9 million related to the Merger. Such (costs) income were not allocated to Unisource’s product categories because management does not believe that there is a correlation between the (costs) income and its product categories and allocation of these amounts is not useful to management in understanding the respective operating results.
 
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Comparison of the Fiscal Years Ended December 31, 2013 and December 29, 2012
Print product category operating income for fiscal 2013 decreased by $13.0 million, or 66.7%, compared to fiscal 2012. The decrease was primarily driven by lower sales volumes and increased distribution expenses of $2.1 million offset by decreased restructuring expenses of $1.9 million, decreased asset impairments of $0.7 million and decreased depreciation and amortization expense of $0.6 million. The increase in distribution expenses primarily reflects higher delivery costs and the loss of sublease income at one of the facilities in the U.S. Distribution business. Selling and administrative expenses were unchanged year-over-year, as a result of higher bad debt expense of $5.3 million in fiscal 2013 which was offset by lower commission costs and reductions in sales overhead and corporate expenses primarily related to restructuring programs and other management initiatives.
Packaging product category operating income for fiscal 2013 increased by $9.9 million, or 47.8%, compared to fiscal 2012. The increase was primarily driven by higher sales volumes, decreased selling and administrative expenses of $2.2 million and decreased asset impairments of $0.7 million offset by increased distribution expenses of $2.2 million. The decrease in selling and administrative expenses was primarily attributable to lower costs related to the restructuring initiatives around sales management and sales support. The increase in distribution expenses reflects primarily the higher sales volume in the Packaging product category.
Facility Supplies product category operating income for fiscal 2013 increased by $2.4 million, or 48.0%, compared to fiscal 2012. The increase was primarily driven by decreased selling and administrative expenses of $2.7 million, decreased asset impairments of $3.1 million and decreased restructuring expenses of $0.8 million offset by increased distribution expenses of $1.7 million and a higher percentage of cost of products sold (excluding depreciation and amortization) to net sales due to competitive pricing pressures. The decrease in selling and administrative expenses was primarily attributable to lower costs related to the restructuring initiatives around sales management and sales support and decreased commissions reflecting cost of products sold (exclusive of depreciation and amortization) increasing at a slightly higher percentage than net sales. Distribution expenses increased at a slightly higher rate than sales volume due primarily to higher facility expense at the Canada Distribution business.
Other product category operating income for fiscal 2013 increased by $0.4 million, or 21.1%, compared to fiscal 2012. The increase was primarily driven by higher sales volumes offset by increased distribution expenses of $4.8 million and increased selling and administrative expenses of $2.5 million. The increase in distribution expenses is primarily related to higher volume in the Other product category. The increase in selling and administrative expenses was primarily attributable to investments in the sales force and other support functions for the business and increased bad debt expense.
Other (costs) income was $(6.6) million in fiscal 2013 and consisted primarily of gains recorded on the sales of real estate assets of $7.7 million and merger expenses of $14.3 million related to the Merger. Such (costs) income were not allocated to Unisource’s product categories because management does not believe that there is a correlation between the (costs) income and its product categories and allocation of these amounts is not useful to management in understanding the respective operating results. Other (costs) income was $0.4 million in fiscal 2012 and consisted primarily of the sale of certain assets and a gain recorded in connection with an early lease termination.
Comparison of the Fiscal Years Ended December 29, 2012 and December 31, 2011
Print product category operating income for fiscal 2012 increased by $13.4 million, or 219.7%, compared to fiscal 2011. The increase was primarily driven by decreased distribution expenses of $4.5 million, decreased selling and administrative expenses of $19.4 million, decreased restructuring expenses of $4.3 million and decreased depreciation and amortization expense of $0.7 million offset by a decline in sales volumes. The decline in distribution expenses reflects primarily the decline in volume and the effects of the restructuring initiatives.
 
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The decrease in selling and administrative expenses was primarily attributable to lower bad debt expenses, lower commissions related to the decrease in sales volume, and reductions in sales overhead and corporate expenses primarily related to the restructuring initiatives.
Packaging product category operating income for fiscal 2012 increased by $3.6 million, or 21.1%, compared to fiscal year 2011. The increase was primarily driven by higher sales volumes and decreased restructuring expenses of $0.6 million offset by increased selling and administrative expenses of $8.7 million, increased distribution expenses of $2.1 million, increased depreciation and amortization expenses of $1.7 million, and increased asset impairments of $1.0 million. The increase in selling and administrative expenses was primarily attributable to higher commissions associated with sales volume increases, investments in corporate accounts and packaging specialists and an increase in corporate expenses. The increase in distribution expenses reflects primarily the higher sales volume in the Packaging product category.
Facility Supplies product category operating income for fiscal 2012 decreased by $3.4 million, or 40.5%, compared to fiscal 2011. The decrease was primarily driven by lower sales volumes and increased asset impairment expense of $3.1 million offset by decreased distribution expenses of $13.9 million, decreased selling and administrative expenses of $7.6 million, and decreased restructuring expenses of $2.8 million. The decrease in distribution expenses reflects lower volumes primarily related to the loss of the Cold Chain Customer. The decrease in selling and administrative expenses was primarily attributable to lower commissions related to the decrease in sales volume and reductions in sales overhead and corporate expenses primarily related to the restructuring initiatives.
Other product category operating income for fiscal 2012 increased by $0.5 million, or 35.7%, compared to fiscal 2011. Operating income increased at a slower rate than net sales as a result of investments in the sales force and other areas of the business.
Liquidity And Capital Resources
Overview
The cash and liquidity needs of Unisource are provided by operating profits and by the Senior Credit Facility. The Senior Credit Facility has a five-year term and matures on March 15, 2016. The Senior Credit Facility provides for borrowings of up to $600.0 million as of March 31, 2014 as follows:
 
 	•	 	Tranche A provides up to $450 million and $150 million of borrowings based upon eligible receivables and inventory in the U.S. and Canada, respectively. Unisource has the right to increase the Tranche A borrowings by up to $150 million (which may be allocated among the U.S. and Canadian sub-facilities as Unisource elects) so long as certain conditions are satisfied.	
 
 	•	 	Tranche A-1 expired March 15, 2014 pursuant to pre-existing terms in the Senior Credit Facility. As of December 31, 2013, the Tranche A-1 commitment was $10 million in the United States and $3.5 million in Canada.	
Unisource has letters of credit availability of $100 million in the United States and up to $25 million in Canada.
The availability is determined based upon a monthly borrowing base calculation, which includes eligible customer receivables and inventory, less outstanding borrowings, letters of credit and certain designated reserves.
Individual borrowings under the Senior Credit Facility generally have terms of three months or less. At the election of Unisource, the Senior Credit Facility bears interest at the Bankers Acceptance (BA) Equivalent or LIBOR, plus an applicable margin, as defined in the Senior Credit Facility. The Senior Credit Facility also allows for borrowings referenced to the U.S. base rate or Canadian prime rate. At March 31, 2014, December 31, 2013
 
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and December 29, 2012, the weighted average interest rate for these borrowings was 2.8%, 2.9% and 3.2%, respectively. In addition, the Senior Credit Facility has an unused line fee which ranges between 37.5 and 62.5 basis points.
Borrowings under Unisource’s Senior Credit Facility can be used for general business purposes, including operating and capital expenditures, making acquisitions, paying dividends and funding investments, subject to certain requirements and restrictions. Substantially all of Unisource’s consolidated assets in which it holds an ownership interest are encumbered or have been pledged as collateral for the Senior Credit Facility. The Senior Credit Facility restricts the incurrence of additional indebtedness with respect to secured assets and includes other customary restrictions and provisions contained in an asset-based credit facility. Unisource was in compliance with all covenants and restrictions as of March 31, 2014. The Senior Credit Facility will be repaid with borrowings under the ABL Facility at the closing of the Transactions.
Each business day, cash collections received through a network of lock box accounts are transferred into master concentration accounts in the United States and Canada, in which available funds, at Unisource’s direction, are transferred to pay down its U.S. and Canadian loan accounts. Additionally, Unisource, at its direction, funds on a daily basis master disbursement accounts by transferring funds from its U.S. and Canadian loan accounts which exist under the Senior Credit Facility. The cash amounts of $29.5 million at March 31, 2014, $22.2 million at December 31, 2013 and $30.6 million at December 29, 2012, reflect primarily balances in North American lock box and cash concentration accounts, which are pending transfer to pay down Senior Credit Facility borrowings. See “Description of Material Indebtedness” for a description of the terms of the new ABL Facility.
Unisource’s operations outside North America are funded through their individual operating results and by loans and advances which are made under the Senior Credit Facility. Unisource believes that the cash generated from operations plus the availability under the Senior Credit Facility will be adequate to meet anticipated requirements for operating and other expenditures for the foreseeable future.
The following table sets forth a summary of cash flows for the three months ended March 31, 2014 and March 30, 2013 and the fiscal years ended December 31, 2013, December 29, 2012 and December 31, 2011:

 	  	Three months ended	 	 	Fiscal years ended	 	
 	  	March 31,
2014	 	 	March 30,
2013	 	 	December 31,
2013	 	 	December 29,
2012	 	 	December 31,
2011	 	
 	  	 	 	 	 	 	 	(Dollars in Millions)	 	
Net cash from (used for):	  				 				 				 				 				
Operating activities	  	$	37.6	  	 	$	17.8	  	 	$	(1.5	) 	 	$	18.1	  	 	$	40.9	  	
Investing activities	  	 	3.0	  	 	 	(4.5	) 	 	 	(10.3	) 	 	 	(26.9	) 	 	 	(22.3	) 	
Financing activities	  	 	(33.1	) 	 	 	(14.3	) 	 	 	3.6	  	 	 	(4.7	) 	 	 	(13.3	) 	
Operating Activities
Overview
Cash flows from operating activities are primarily affected by the amount of net income (loss) generated by the business, changes in non-cash items and the effect of changes in working capital. At times when the business is growing, working capital will require additional funding. Conversely, if the business contracts, liquidations of working capital would be expected to occur, however, such funds generated may not be sufficient to offset declines in net income (loss), restructuring programs and other measures. Changes in customer accounts receivable aging, inventory levels and vendor payment terms could have a material impact on cash flows from operating activities.
During fiscal 2013 and fiscal 2012, Unisource experienced pressure from its customers, particularly in the Print product category, for extended payment terms and experienced delays in customer payments under existing
 
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invoice terms. The extended payment terms have not negatively impacted collectability, however even delays or extensions in customer terms of a few days can have a material impact on operating cash flow. Based on the net sales during the three months ended March 31, 2014, one day of delay in average customer receipts, based on shipping days was estimated to have a negative effect of approximately $14.8 million on working capital. Additionally, during the above period, certain of Unisource’s vendors were offering discount terms or strictly enforcing the discount terms which were offered, to improve their cash flow. In cases where vendors offer payment discounts, it has been the policy of Unisource to take advantage of such discount terms since the economic benefit currently outweighs Unisource’s cost of funds.
Comparison of three months ended March 31, 2014 and March 30, 2013
Unisource generated $37.6 million of cash from operating activities during the three months ended March 31, 2014, an increase of $19.8 million, compared with $17.8 million generated during the three months ended March 30, 2013. The components of the year-over-year increase in cash provided by operating activities include an increase in net income (loss) of $2.2 million, a decrease in non-cash expenses of $(9.8) million, a decrease in the amount of cash required to fund working capital needs of $28.1 million and a change in other long-term assets/liabilities, net of $(0.7) million. The decrease in non-cash expenses is primarily attributable to a gain on the sale of Unisource’s 50% ownership interest in two real estate joint ventures of $6.6 million and lower bad debt expense of $1.3 million. For the three months ended March 31, 2014, changes in working capital contributed cash of $42.5 million. The primary driver of the contribution was an increase in the average number of days to pay vendors. For the three months ended March 30, 2013, changes in working capital contributed cash of $14.4 million. The primary driver of the contribution was a decrease in accounts receivable due to a decline in net sales.
Comparison of Fiscal Years Ended December 31, 2013 and December 29, 2012
Unisource used $1.5 million of cash in operating activities during fiscal 2013, a decrease of $19.6 million, compared with the $18.1 million generated during fiscal 2012. The components of the year-over-year decrease in cash provided by operating activities include an increase in net income (loss) of $237.3 million, a decrease in non-cash expenses of $(249.9) million, an increase in the amount of cash required to fund working capital needs of $13.5 million and a change in other long-term assets/liabilities, net of $6.5 million. The decrease in non-cash expenses is primarily attributable to the release of the U.S. deferred tax asset valuation allowance of $238.7 million in fiscal 2013, coupled with the recording of a deferred tax asset valuation allowance in the first quarter of 2012, relating to the operations in Canada. For fiscal 2013, Unisource used $44.9 million of cash to fund its working capital requirements. The primary driver of the usage was a decrease in the average number of days to pay vendors. For fiscal 2012, Unisource used $31.4 million to fund its working capital requirements. The primary drivers of the usage were an increase in the time it took customers to pay, offset by the decline in net sales and a decrease in the average number of days to pay vendors. Throughout fiscal 2013 and 2012, Unisource experienced both pressure from customers to extend terms and pressure from vendors to accelerate payment.
Comparison of Fiscal Years Ended December 29, 2012 and December 31, 2011
Unisource generated $18.1 million of cash from operating activities during fiscal 2012, a decrease of $22.8 million compared with the $40.9 million generated during fiscal 2011. The components of the year-over-year decrease in cash provided by operating activities include an increase in net income (loss) of $32.2 million, a decrease in non-cash expenses of $(30.5) million, an increase in the amount of cash required to fund working capital needs of $22.8 million and a change in other long-term assets/liabilities, net of $(1.7) million. The change in the non-cash expenses is primarily due to lower PIK interest resulting from the partial pay off and conversion of the PIK notes on December 5, 2011 and the pay off of the Graphic seller notes in September of 2011, and the non-cash charge recorded in the first quarter of 2012, relating to the Canada operation deferred tax assets valuation allowance.
For fiscal 2012, Unisource required $31.4 million of cash to fund its working capital requirements. The primary drivers of the change were due to an increase in the time it took customers to pay offset by the decline in
 
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net sales and a decrease in the average number of days to pay vendors. For the fiscal year 2011, Unisource required $8.6 million of cash to fund its working capital requirements. The increase in working capital during fiscal 2011 was primarily attributable to higher net sales levels.
Investing Activities
In recent years, Unisource’s capital investments have generally fallen into four primary categories: (1) investments in transportation and warehouse moving equipment, (2) investments in packaging design, testing and select packaging manufacturing equipment, (3) investments in internal-use software and (4) investments in leasehold improvements. Unisource’s policy with respect to buying versus leasing transportation and warehouse moving equipment is based upon a number of factors, including Unisource’s estimate of the economic life of the equipment, the current interest rate environment and estimates regarding the future liquidity needs of Unisource. Purchases of packaging design, testing and select packaging manufacturing equipment, internal-use software and leasehold improvements are generally paid through operating cash flows or through availability under its Senior Credit Facility.
Comparison of three months ended March 31, 2014 and March 30, 2013
During the three months ended March 31, 2014, cash provided by investing activities was $3.0 million compared with cash used of $4.5 million during the three months ended March 30, 2013. During the three months ended March 31, 2014, Unisource had proceeds totaling $6.4 million from the sale of two real estate joint ventures. Capital expenditures during the three months ended March 31, 2014 of $3.4 million were primarily made for internal-use software projects, including the software investments required in connection with the North American shared service model program, the implementation of a new financial consolidation system and purchases of transportation and warehouse moving equipment at the U.S. Distribution and Canada Distribution businesses. Capital expenditures during the three months ended March 30, 2013 of $4.5 million were primarily made for internal-use software projects, including the software investments required in connection with the North American shared service model program, the upgrade of the Graphic business to a new enterprise platform, the implementation of a new financial consolidation system and leasehold improvements at the U.S. Distribution and Canada Distribution businesses.
Comparison of Fiscal Years Ended December 31, 2013, December 29, 2012 and December 31, 2011
During fiscal 2013, 2012 and 2011, Unisource used $18.0 million, $26.2 million and $22.3 million, respectively to fund capital expenditures and leasehold improvements. Capital expenditures during fiscal 2013 were primarily made for internal-use software projects, including the software investments required in connection with the North American shared service model program, the upgrade of the Graphic business to a new enterprise platform, the implementation of a new financial consolidation system and purchases of transportation and warehouse moving equipment at the U.S. Distribution and Canada Distribution businesses. Capital expenditures during fiscal 2012 included investments made for select packaging manufacturing equipment in connection with Unisource’s strategy to provide limited manufacturing capabilities to support select customers, investments in internal-use software including the purchase of financial consolidation, general ledger, accounts receivable and account payable systems, internal-use software related to the implementation of a new enterprise system at the Graphic business, and purchases of transportation and material handling equipment at both the U.S. Distribution and Canada Distribution businesses and leasehold improvements. Capital expenditures during fiscal 2011 included primarily investments made for transportation and warehouse moving equipment, packaging design, testing and select packaging manufacturing equipment, investments in internal-use software and leasehold improvements.
In connection with the North American shared service model restructuring program, during the fourth quarter of fiscal 2013, Unisource sold its Richmond Hill, Ontario, Canada and Bangor, Maine warehouses and a cottage located in Montebello, Quebec, Canada. The aggregate proceeds from property and equipment sales totaled approximately $7.7 million.
 
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Financing Activities
Comparison of three months ended March 31, 2014 and March 30, 2013
For the three months ended March 31, 2014, net borrowings under the Senior Credit Facility decreased by $(25.3) million primarily due to the net surplus between operating cash flows and investing activities of $40.6 million, the principal pay down of $(2.9) million associated with real estate and equipment capital leases, the decrease in bank overdrafts of $(4.9) million and an increase in cash of $(7.3) million. For the three months ended March 30, 2013, net borrowings under the Senior Credit Facility decreased by $(3.9) million, primarily due to the net surplus between operating cash flow and investing activities of $13.3 million, the principal pay down of real estate and equipment capital leases of $(3.2) million, the decrease in bank overdrafts of $(7.2) million and a decrease in cash of $1.1 million.
Comparison of Fiscal Years Ended December 31, 2013, December 29, 2012 and December 31, 2011
For fiscal 2013, net borrowings under the Senior Credit Facility decreased by $(1.4) million primarily due to the net deficit from operating and investing activities of $(11.8) million, the principal pay down of real estate and equipment leases of $(11.7) million, the increase in bank overdrafts of $16.7 million and a decrease in cash of $8.4 million. For fiscal 2012, net borrowings under the Senior Credit Facility increased by $28.6 million, primarily due to the net deficit between operating cash flow and investing activities of $(8.8) million, the principal pay down of real estate and equipment capital leases of $(10.1) million, the decrease in bank overdrafts of $(23.2) million and a reduction in cash of $13.3 million. For fiscal 2011, net borrowings under the Senior Credit Facility increased by $109.2 million primarily due to the net surplus between operating cash flows and investing activities of $18.6 million, the payment of $(6.8) million in fees related to the execution of the new Senior Credit Facility in March of 2011, the principal pay down of real estate and equipment capital leases of $(8.8) million, the partial pay down of $(100.0) million in connection with the PIK note conversion to Redeemable preferred stock in December of 2011, the payoff of $(10.0) million related to the maturity of the Graphic seller notes in September of 2011, an increase in bank overdrafts of $3.5 million and an increase of cash of $(5.0) million.
Free Cash Flow
For a discussion of free cash flow, see “—Key Performance Measures—Free Cash Flow Trends.”
Senior Credit Facility Availability
The following table reconciles the available borrowing base to excess availability under Unisource’s Senior Credit Facility at the dates indicated.

 	  	March 31,
2014	 	  	March 30,
2013	 	  	December 31,
2013	 	  	December 29,
2012	 	  	December 31,
2011	 	
 	  	 	 	  	 	 	  	(Dollars in millions)	 	
Available borrowing base (1)(2)	  	$	489.6	  	  	$	504.9	  	  	$	503.2	  	  	$	526.9	  	  	$	514.6	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Borrowing under the Senior Credit Facilities (3)	  	 	262.9	  	  	 	287.6	  	  	 	289.2	  	  	 	292.2	  	  	 	263.4	  	
Outstanding letters of credit	  	 	7.8	  	  	 	9.0	  	  	 	7.8	  	  	 	9.0	  	  	 	9.1	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total uses under the Senior Credit Facilities	  	 	270.7	  	  	 	296.6	  	  	 	297.0	  	  	 	301.2	  	  	 	272.5	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Excess availability under Senior Credit Facilities	  	$	218.9	  	  	 	208.3	  	  	$	206.2	  	  	$	225.7	  	  	$	242.1	  	

(1)	Available borrowing base amounts reflect the amounts derived for the monthly borrowing base certificates presented to Unisource’s agent bank which were as of the date closest to the period-end.	
(2)	Customer receivables and inventory located outside North America are generally not eligible for inclusion in the available borrowing base.	
 
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(3)	Excludes Canadian bank overdrafts which do not reduce availability under the Senior Credit Facility. For financial statement reporting purposes, the Canadian bank overdrafts are included in the balance of outstanding borrowings under the Senior Credit Facility.	
As of March 31, 2014, March 30, 2013, December 31, 2013, December 29, 2012 and December 31, 2011, Unisource had unused availability under the Senior Credit Facility of $218.9 million, $208.3 million, $206.2 million, $225.7 million and $242.1 million, respectively.
Future Liquidity
Following the Merger, Unisource’s capital structure and sources of liquidity will change significantly from its historical capital structure. Unisource will no longer participate in its Senior Credit Facility which will be paid off and terminate as of the effective date of the Merger. The historical and future operating cash flow results of Unisource as a stand-alone company could be materially different than the results that may be achieved with the Merger. See “Description of Material Indebtedness” for a description of the ABL Facility.
Off-Balance Sheet Arrangements
Unisource does not have any material off-balance sheet arrangements other than the contractual obligations that are listed below.
Contractual Obligations
The table below presents Unisource’s estimated total contractual obligations at December 31, 2013, including the amounts expected to be paid or settled for each of the periods indicated below.

 	  	Payments Due by Period	 	
 	  	Total	 	  	Less Than
1 Year	 	  	1–3
Years	 	  	3–5
Years	 	  	More Than
5 Years	 	
 	  	(Dollars in millions)	 	
Contractual obligations	  				  				  				  				  				
Senior Credit Facility (1)	  	$	317.3	  	  	$	—  	  	  	$	317.3	  	  	$	—  	  	  	$	—  	  	
Real estate capital leases (2)	  	 	72.7	  	  	 	15.9	  	  	 	32.2	  	  	 	24.6	  	  	 	—  	  	
Equipment capital leases (2)	  	 	13.1	  	  	 	3.6	  	  	 	6.1	  	  	 	3.1	  	  	 	0.3	  	
Non-cancelable operating leases (3)	  	 	163.3	  	  	 	39.5	  	  	 	56.1	  	  	 	37.4	  	  	 	30.3	  	
Deferred compensation obligations (4)	  	 	33.1	  	  	 	2.6	  	  	 	5.4	  	  	 	4.9	  	  	 	20.2	  	
Defined benefit pension plans (5)	  	 	8.2	  	  	 	8.2	  	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Redeemable preferred stock dividends and principal (6)	  	 	369.8	  	  	 	—  	  	  	 	92.3	  	  	 	36.6	  	  	 	240.9	  	
Advisor fees (7)	  	 	26.4	  	  	 	4.4	  	  	 	8.8	  	  	 	8.8	  	  	 	4.4	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,003.9	  	  	$	74.2	  	  	$	518.2	  	  	$	115.4	  	  	$	296.1	  	

(1)	The Senior Credit Facility matures on March 15, 2016. Interest payments are not included. (refer to Note 7 of Unisource’s consolidated financial statements for the fiscal year ended December 31, 2013).	
(2)	Capital lease obligation includes amounts classified as interest.	
(3)	Non-cancelable operating leases are presented net of contractual sublease rental income.	
(4)	Deferred compensation obligations reflect gross cash payment amounts due.	
(5)	The timing and amounts of contributions to the defined benefit pension plans vary as pension contributions depend on government-mandated minimum funding requirements. Unisource expects to contribute $8.2 million in 2014 to its U.S. and Canadian defined benefit pension plans. Due to the future impact of various market conditions, rates of return and changes in plan participants, Unisource cannot provide a meaningful estimate of its future contributions beyond 2014 (refer to Note 8 of Unisource’s consolidated financial statements for the fiscal year ended December 31, 2013).	
 
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(6)	Pursuant to an internal reorganization consummated on January 27, 2014 in preparation for the Merger, the Redeemable preferred stock, as well as all existing UWWH common stock and stock options, were cancelled and all obligations related to the accumulated dividends on such Redeemable preferred stock ownership were terminated. In connection with the internal reorganization, equity interests in UWWH Stockholder were issued to holders of cancelled equity interests on substantially the same economic terms as the cancelled equity interests, including the obligation to pay the accumulated Redeemable preferred stock dividends when due. As of January 27, 2014, Unisource no longer has any obligation with respect to Redeemable preferred stock or the accumulated dividends thereon (refer to Note 1, Note 10 and Note 11 of Unisource’s unaudited condensed consolidated financial statements for the three months ended March 31, 2014). UWWH is neither a party to nor a guarantor of the UWWH Stockholder’s obligation and as such the obligation is not reflected in the condensed consolidated financial statements of UWWH as of March 31, 2014. However, prior to the Merger, to the extent that Unisource holds cash legally available for distribution and is permitted to distribute such cash under both the Senior Credit Facility agreement (refer to Note 7 of Unisource’s unaudited condensed consolidated financial statements for the three months ended March 31, 2014) and the Merger Agreement, UWWH may be required to dividend funds to the UWWH Stockholder to pay distributions to its members.	
On December 5, 2011, Unisource issued Redeemable preferred stock to Georgia-Pacific as partial settlement for outstanding long-term debt obligations that were originally issued in connection with the Bain Capital acquisition of Unisource (refer to Note 10 of Unisource’s consolidated financial statements for the fiscal year ended December 31, 2013). At the date of issuance, the Redeemable preferred stock had a liquidation value of $228.5 million. Under the terms of the Redeemable preferred stock agreement, dividends accrued daily at an annual rate of 8.0% based on the shares outstanding liquidation value.
Unisource was required to declare a dividend on each share of Redeemable preferred stock in the amount accrued for the one year period ending at the anniversary date (December 5). Any dividends not paid in cash were added to the liquidation value of the Redeemable preferred stock shares.
For each anniversary date which occurred before April 29, 2016, Unisource had the option to either pay the declared dividend amounts in cash or to elect to have the unpaid dividend amount added to the liquidation value of the Redeemable preferred stock. On April 29, 2016, Unisource was required to declare and pay in cash all dividends that were accrued and unpaid as of that date, including unpaid amounts which were previously added to the liquidation value. Since the issuance of the Redeemable preferred stock, Unisource had elected not to pay dividends in cash. If Unisource had continued to elect not to pay Redeemable preferred stock dividends in cash, the amount of the April 29, 2016 dividend cash payment would have been $92.3 million and the liquidation value of the Redeemable preferred stock after the payment of cash dividend would have been $228.5 million. Additionally, under the terms of the Redeemable preferred stock agreement for all periods after April 29, 2016, Unisource was required to declare and pay in cash annual dividends on each April 29 in the amount of $18.3 million. At December 31, 2013, the liquidation value of the Redeemable preferred stock was $268.1 million.
For purposes of the Contractual Obligations table above, the accrued amount of dividends of $92.3 million which were due on April 29, 2016 were assumed to be paid in cash, accrued dividends of $18.3 million which were due on April 29, 2017 and April 29, 2018 were assumed to be paid in cash and the Redeemable preferred stock liquidation value, plus accrued but unpaid dividends were assumed to be paid on January 1, 2019.
 
(7)	Only one year of advisor fees are shown for the period beyond five years as the advisory agreement has no explicit end date. Upon completion of the Mergers, the advisory agreement with Bain Capital will terminate.	
The table above excludes estimated funding for asset retirement obligations due to the uncertainty of the ultimate settlement of the obligation. Unisource’s asset retirement obligations are recognized at fair value in the period in which they are incurred and the carrying amount of the related long-lived asset is correspondingly increased. Over time, the liability is accreted to its future value and the corresponding asset cost is amortized over the useful life of the asset. At December 31, 2013, Unisource had recorded asset retirement obligations of $7.5 million, including amounts reported as current (refer to Note 9 of Unisource’s consolidated financial statements for the fiscal year ended December 31, 2013).
 
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The timing of cash outflows related to liabilities for uncertain tax positions cannot be estimated and therefore have been excluded from the table. Unisource had liabilities of $1.9 million for uncertain tax positions at December 31, 2013. Related to these uncertain tax positions, Unisource has also recorded a liability for potential interest and penalties of $2.5 million at December 31, 2013 (refer to Note 6 of Unisource’s consolidated financial statements for the fiscal year ended December 31, 2013).
The table above does not reflect certain obligations under employment, retention and other similar agreements of approximately $30 million that may be payable by SpinCo to certain Unisource employees as a result of the Transactions.
Impacts of Merger
Pursuant to an internal reorganization consummated on January 27, 2014 in preparation for the Merger, the Redeemable preferred stock, as well as all existing UWWH common stock and stock options, were cancelled and all obligations related to the accumulated dividends on such Redeemable preferred stock ownership were terminated. In connection with the internal reorganization, equity interests in UWWH Stockholder were issued to holders of cancelled equity interests on substantially the same economic terms as the cancelled equity interests, including the obligation to pay the accumulated Redeemable preferred stock dividends when due. As of January 27, 2014, Unisource no longer has any obligation with respect to Redeemable preferred stock or the accumulated dividends thereon (refer to Note 10 and Note 11 of Unisource’s consolidated financial statements for the fiscal year ended December 31, 2013). Also, at the Closing Date, the Bain Capital advisory agreement will terminate (refer to Note 13 of Unisource’s consolidated financial statements for the year ended December 31, 2013).
In connection with the Merger, UWWH, UWW, Bain Capital and Georgia-Pacific entered into a Consent and Waiver Agreement, whereby Unisource and each of the parties agreed: (i) Unisource would not have the ability to extend the term of the leases under its real estate capital leases and two other warehouse leases with Georgia-Pacific (refer to Note 7 of Unisource’s consolidated financial statements for the year ended December 31, 2013), (ii) Georgia-Pacific would no longer be required to reimburse Unisource for certain future deferred compensation obligations, which at December 31, 2013 had a discounted future obligation of approximately $1.9 million, and (iii) to settle a Canadian tax dispute concerning a tax benefit relating to the tax basis of goodwill at the time of the Bain Capital acquisition of Unisource. The settlement of the tax dispute requires a payment by Unisource which will be based upon the realization of the benefit, but shall not exceed $1.6 million. As of March 31, 2014, Unisource had realized $1.1 million of such benefit. The liability for the amount realized is included in other accrued liabilities in both Unisource’s condensed consolidated balance sheet at March 31, 2014 and consolidated balance sheets at December 31, 2013 and December 29, 2012, which are included elsewhere in this prospectus.
Critical Accounting Policies And Estimates
The preparation of Unisource’s financial statements in accordance with GAAP requires Unisource to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods and the related disclosures in the consolidated financial statements and accompanying footnotes. Unisource believes that of its significant accounting policies, which are described in Note 1: “Summary of Significant Accounting Policies” in the audited consolidated financial statements included elsewhere in this prospectus, the following accounting policies are critical because they involve a higher degree of judgment, and the estimates required to be made were based on assumptions that are inherently uncertain. As a result, these accounting policies could materially affect the financial position, results of operations and related disclosures. On an ongoing basis, Unisource evaluates these estimates and judgments based on historical experiences and various other factors that are believed to reflect the current circumstances. While Unisource believes its estimates, assumptions and judgments are reasonable, they are based on information presently available. Actual results may differ significantly from these estimates due to changes in judgments, assumptions and conditions as a result of unforeseen events or otherwise, which could have a material impact on Unisource’s financial position and results of operations.
 
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Revenue Recognition
For fiscal 2013, 2012 and 2011, and the three months ended March 31, 2014 and March 30, 2013, approximately 98.3%, 98.9%, 99.5%, 98.0% and 98.4%, respectively of Unisource’s net sales were derived from the sale of paper, packaging and facility supply products which were manufactured by third parties, including approximately 0.8%, 0.7%, 0.7%, 0.6% and 0.8%, respectively, from the sale of packaging and facility supplies equipment. Additionally approximately 1.7%, 1.1%, 0.5%, 2.0% and 1.6% of Unisource’s net sales for fiscal 2013, 2012 and 2011, and the three months ended March 31, 2014 and March 30, 2013, respectively, were derived from services provided by or arranged by Unisource.
Unisource recognizes revenue on the sale of products when persuasive evidence of an agreement exists, delivery has occurred, the price to the buyer is fixed or determinable and collectability is reasonably assured. Delivery is not considered to have occurred until the customer takes title and assumes the risks and rewards of ownership. Certain of the above product sales are derived from shipments arranged by Unisource made directly from the manufacturer to the customer. Unisource is considered to be a principal to these transactions since it, among other factors, controls pricing and terms with respect to the customer, bears the credit risk of the customer defaulting on payment and is the primary obligor to the manufacturer. In certain cases, Unisource is required to estimate whether delivery to the customer has occurred as of the end of the accounting period. Such estimates are based in part on historical delivery information which is calculated based on mode of delivery and updated throughout the year.
Unisource recognizes revenue on the sale of equipment upon delivery and acceptance by its customers. In instances where the equipment includes more than one component, revenue is recognized at the time that all components are installed and functioning. Revenue associated with services is recognized upon the completion of such services.
Taxes collected from customers which are remitted to governmental authorities are accounted for on a net basis. Accordingly, such taxes are excluded from both net sales and expenses.
Impairment of Long-Lived Assets and Goodwill
Long-Lived Assets
Unisource has recorded in its consolidated balance sheet property and equipment with a net book value of $73.9 million, $76.3 million and $80.2 million at March 31, 2014, December 31, 2013 and December 29, 2012, respectively, and intangible assets with finite lives with a net book value of $20.1 million, $20.9 million and $24.3 million at March 31, 2014, December 31, 2013 and December 29, 2012, respectively. Unisource also has intangible assets with indefinite lives related to the Graphic acquisition of $23.4 million at March 31, 2014, December 31, 2013 and December 29, 2012.
Long-lived assets, including property and equipment and intangible assets with finite useful lives, are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Unisource evaluates the carrying value of its long-lived assets by comparing the expected undiscounted future cash flows to the net book value of the assets when it is determined that there are indicators of potential impairment. If it is determined that the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value, calculated using discounted cash flows, is recorded in the consolidated statement of operations as asset impairments.
As part of the process described above, Unisource exercises judgment to:
 
 	•	 	Determine if there are indicators of impairment. Unisource assesses indicators of impairment that include the overall impact of trends in the industry and general economy, current period losses combined with a history of losses, management’s decision to exit a facility for strategic business reasons, and changes in other circumstances that indicate the carrying amount of an asset may not be recoverable;	
 
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 	•	 	Determine the projected undiscounted future cash flows when indicators of impairment are present. Unisource develops projections of future revenues and expenses over the expected useful life of the asset group to estimate the undiscounted cash flows. The estimate is subject to assumptions related to future sales, margin growth rates, economic conditions, market competition and inflation; and	
 
 	•	 	Determine the asset fair value if it is determined that the asset may not be recoverable. In determining the fair value, Unisource often uses internally-developed discounted cash flow models. Assumptions used in the discounted cash flow models include estimating cash flows, which may require Unisource to adjust for specific market conditions, as well as capitalization rates, which are based on asset type, market-specific dynamics and overall economic performance. The discount rate takes into account Unisource’s weighted average cost of capital according to its capital structure and other market specific considerations.	
Asset impairment charges of $0.4 million, $4.9 million and $1.0 million were recorded during fiscal 2013, fiscal 2012 and fiscal 2011, respectively. Asset impairment charges of $0.1 million were recorded during the three months ended March 30, 2013. No asset impairment charges were recorded during the three months ended March 31, 2014. See the notes to Unisource’s consolidated financial statements for a further discussion of the asset impairment analysis and resulting losses from those analyses.
Goodwill
The balance of goodwill on Unisource’s consolidated balance sheet relates solely to its acquisition of the Graphic business. Unisource performed an assessment in the fourth quarter of 2013 of the goodwill balance, at the reporting unit level, using the income approach. The income approach is a quantitative evaluation to determine the fair value of the reporting unit. Under the income approach, Unisource determined the fair value based on estimated future cash flows discounted by an estimated weighted-average cost of capital, which reflects the overall level of inherent risk of the reporting unit and the rate of return a market participant would expect to earn. The estimated future cash flows were based on forecasts of future operating results that were probability weighted based upon a discount factor of 25%, which was based on historical performance and expectations regarding the industry and business. These calculations require many estimates, including discount rates, future growth rates, and cost and pricing trends. As a result of the testing, Unisource concluded that the Graphic goodwill was not impaired. Subsequent changes in economic and operating conditions can affect these assumptions and could result in additional interim testing and goodwill impairment charges in future periods which could be material.
Allowance for Doubtful Accounts
The balance of the allowance for uncollectible accounts on Unisource’s consolidated balance sheet was $13.8 million, $14.6 million and $19.6 million at March 31, 2014, December 31, 2013 and December 29, 2012, respectively.
Unisource sells its products to a diverse customer base that includes commercial printers, retail, hospitality, healthcare, governmental, distribution and manufacturing sectors. Credit is generally extended without requiring collateral based on an evaluation of the customer’s credit risk. Unisource relies on a variety of sources to establish its reserves for uncollectable accounts, including customer specific financial information, when available, information purchased from outside credit agencies, including credit agency risk code ratings, customer payment patterns, including past due balances, and specific management judgment. Additionally, for the three months ended March 31, 2014, approximately 52.9% of Unisource’s sales were in the Print product category, which end users include commercial printers, advertising agencies and book publishers among others, which have experienced a secular decline, as many of their end user customers have migrated to electronic formats. These trends have resulted in consolidations and bankruptcies by companies which serve these markets. It is reasonably possible that future declines in the economy and print market could lead to additional consolidation and bankruptcies, and the resulting increased requirements for bad debt reserves could be material.
 
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Asset Retirement Obligations
The balance of the asset retirement obligations on Unisource’s consolidated balance sheets was $7.2 million, $7.5 million and $5.5 million at March 31, 2014, December 31, 2013 and December 29, 2012, respectively.
Unisource has contractual obligations associated with its warehouse and facility operating leases and its warehouse real estate capital leases which require Unisource to restore the facilities to their original condition less normal wear and tear upon exit of the facility. (Refer to Note 9 to Unisource’s consolidated financial statements for the fiscal year ended December 31, 2013.) The development of Unisource’s asset retirement obligation (“ARO”) is based upon estimates which include the current market restoration costs, the amount and extent of the repair which will be required at a facility, future inflation and discount rates and expected facility exit dates. Cost estimates in part are based on actual costs incurred associated with the exit of similar facilities, input from Unisource’s real estate group and, in certain instances, outside contractors. Assumptions used to estimate Unisource’s ARO liability are updated on an annual basis and when significant changes in facts and circumstances occur which would affect such estimates. Given that the estimates are based on facts and circumstances which will occur at future dates, it is reasonably possible that the actual costs incurred upon the exit of such facilities could result in changes in the ARO liabilities recorded in the consolidated financial statements which are material in nature.
Defined Benefit Pension Obligations
Unisource sponsors defined benefit pension plans both in the United States and in Canada. The determination of Unisource’s defined benefit pension expense in the consolidated statement of operations and the related projected benefit obligations is based on various actuarial assumptions and methodologies. The critical assumptions, which are based on future events include expected rates of return on investments, discount rates, inflation rates, employee retirement patterns and payment selections and mortality rates. These assumptions are reviewed with Unisource’s outside advisors at the end of each fiscal year and are updated as appropriate. Actual experience that differs from the assumptions could have a significant effect on Unisource’s consolidated results of operations, financial position or cash flows. (Refer to Note 8 to Unisource’s consolidated financial statements for the fiscal year ended December 31, 2013 for a further discussion of Unisource’s pension obligations.)
Income Taxes
Unisource records its global tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates. Where Unisource believes that a tax position is supportable for income tax purposes, the item is included in its income tax returns. Where treatment of a position is uncertain, liabilities are recorded based upon Unisource’s evaluation of the “more likely than not” outcome considering technical merits of the position based on specific tax regulations and facts of each matter. Changes to recorded liabilities are made when an identifiable event occurs that changes the likely outcome, such as settlement with the relevant tax authority, the expiration of statutes of limitation for the subject tax year, changes in tax laws, or other relevant events.
A valuation allowance is required to be established or maintained, if based on the available evidence, it is more likely than not such assets will not be realized. In the assessment for a valuation allowance, Unisource gives appropriate consideration to positive and negative evidence related to the realization of the deferred tax assets. Prior to the third quarter of 2013, Unisource had recorded a full valuation allowance against its U.S. and state net deferred tax assets.
During fiscal 2013, Unisource concluded that it was more likely than not that all of its U.S. federal and a substantial portion of its state deferred tax assets would be realized. This conclusion was based on a detailed evaluation of all relevant evidence, both positive and negative, including such factors as cumulative income for the last twelve quarters, a recent ability to sustain a level of profitability, and the expectation of continued earnings. Unisource has weighed these positive factors against the negative factors, including a prior history of losses and significant NOL carryforward, and determined that the positive evidence outweighs the negative
 
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evidence. Accordingly, Unisource reversed $238.7 million of its valuation allowance against its U.S. federal and a substantial portion of its state net deferred tax assets. A valuation allowance remains for some of Unisource’s state NOL carryforwards that it believes are not more likely than not to be utilized at this time due to the short carryforward periods that exist in certain states. In future periods, the remaining valuation allowance could be reduced if sufficient positive evidence is present indicating that it is more likely than not that a portion or all of Unisource’s remaining deferred tax assets will be realized. After the reversal, Unisource has a valuation allowance of $11.0 million against its state net deferred tax assets as of March 31, 2014.
Prior to fiscal 2012, Unisource had not recorded a valuation allowance for its net deferred tax asset position at its Canadian operations based upon its historical taxable operating performance, the availability of tax loss carrybacks and its expectations regarding future taxable income. During 2012, Unisource determined that it was more likely than not that the assets would not be realized and concluded that a valuation allowance was required against its Canadian net deferred tax assets. Unisource considered such factors as cumulative loss for the last twelve quarters, recent taxable losses, the complete utilization of tax carryback opportunities in the prior year and expectations regarding future taxable income, including available tax planning strategies. Therefore, Unisource established a full valuation allowance against its net deferred tax assets in Canada in the first quarter of 2012. Through March 31, 2014, the Canada Distribution business has not shown sufficient positive evidence to justify releasing part or all of its valuation allowance. Unisource has a valuation allowance of $13.8 million against its Canadian net deferred tax assets as of March 31, 2014.
Significant judgment is required in evaluating the need for and magnitude of appropriate valuation allowances against deferred tax assets. The realization of these assets is dependent on generating future taxable income, as well as successful implementation of various tax planning strategies. While Unisource believes that these judgments and estimates are appropriate and reasonable under the circumstances, actual results could differ from estimated results, which could result in additions to valuation allowances or reductions in valuation allowances. It is reasonably possible that such changes could have a material effect on the amount of income tax expense (benefit) recorded in Unisource’s consolidated statement of operations.
On consummation of the pending merger with xpedx Intermediate, there will likely be a change in ownership of Unisource, as defined under Section 382 of the Internal Revenue Code. Under Section 382, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards to offset its post-change income may be limited. Similar rules may apply under state tax laws. Unisource may be limited in its ability to use its NOL carryforwards to reduce taxes owed on the net taxable income that it earns. Any such limitations on the ability to use its NOL carryforwards could adversely impact Unisource’s business, financial condition and operating results.
Contingent Liabilities
At any time, Unisource may be subject to investigations, legal proceedings, or claims related to the ongoing operation of its business, including claims both by and against Unisource. Unisource routinely assesses the likelihood of any adverse outcomes related to these matters, as well as the potential ranges of losses and fees. Unisource establishes accruals for its potential exposure, as appropriate, when losses become probable and reasonably estimable. Where Unisource is able to reasonably estimate a range of potential losses, the best estimate within the range is recorded. Liabilities accrued for legal matters require judgments regarding projected outcomes and range of loss based on historical experience and recommendations of legal counsel. Although the ultimate outcome of legal proceedings underway at any point in time is difficult to reasonably determine, Unisource believes adequate reserves have been established for probable losses and legal costs related thereto.
On February 14, 2013, Unisource was notified by the State of Delaware that they intended to examine the books and records of Unisource to determine compliance with Delaware escheat laws. Since that date, seven other states have joined with Delaware in the audit process which is conducted by an outside firm on behalf of the states and covers the period from 1981 to present. Unisource had been informed that similar audits have generally taken two to four years to complete. Due to the preliminary stages of such audits, Unisource
 
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determined that the ultimate outcome cannot be estimated at this time. Claims or liabilities could be asserted and such outcomes could have a material impact on Unisource’s financial position, results of operations and cash flows.
New Accounting Standards Implemented and Accounting Standards Issued and Not Yet Implemented
For a discussion of new accounting standards implemented and accounting standards issued but not yet implemented, see Note 1 of Unisource’s consolidated financial statements for the year ended December 31, 2013 and as updated in Note 1 in Unisource’s unaudited condensed consolidated financial statements for the three months ended March 31, 2014, in each case included elsewhere in this prospectus.
Quantitative And Qualitative Disclosures About Market Risk
Unisource is exposed to the impact of interest rate changes and foreign currency fluctuations primarily related to the Canadian dollar.
Interest Rate Risk
Unisource’s exposure to fluctuations in interest rates results primarily from its borrowings under the Senior Credit Facility. Under the terms of the Senior Credit Facility, interest rates are based upon LIBOR or the prime rate plus a margin rate, or in the case of Canada, a banker’s acceptance rate or base rate plus a margin rate. LIBOR based loans can be set for durations of one week, or for periods of one to nine months. The margin rate amount can be adjusted upward or downward based upon usage under the line in two increments of 25 basis points. Unisource’s interest rate exposure under the Senior Credit Facility results from changes in LIBOR, bankers’ acceptance rates, the prime/base interest rates and actual borrowings. The weighted average borrowing interest rate at March 31, 2014 was 2.8%. Based on the average borrowings under the Senior Credit Facility during the three months ended March 31, 2014, the following table shows the sensitivity of interest rate increases on interest expense under the Senior Credit Facility.

Senior Credit Facility	
Change in Interest
Rate	  	Increase (Decrease)
in Annual Interest
Expense	
 	  	(Dollars in millions)	
(1.0%)	  	$(2.8)	
1.0%	  	2.8	
2.0%	  	5.6	
3.0%	  	8.4	
5.0%	  	13.9	
Historically, Unisource has not entered into interest rate hedges or futures agreements.
Foreign Currency Exchange Rate Risk
Unisource conducts business in various foreign currencies and is exposed to earnings and cash flow volatility associated with changes in foreign currency exchange rates. This exposure is primarily related to international assets and liabilities, whose value could change materially in reference to the U.S. dollar reporting currency. The most significant impact of changes to foreign currency values include certain intercompany loans and advances not deemed to be permanently invested and transactions denominated in currencies which differ from Unisource’s own currency.
Unisource’s significant foreign currency exposure relates to fluctuations in the foreign exchange rate between the U.S. dollar and the Canadian dollar. Net sales from Unisource’s Canadian operations for the three months ended March 31, 2014 and fiscal 2013 represented 20% and 21%, respectively, of Unisource’s total net sales. Historically, Unisource has not used foreign exchange currency options or futures agreements to hedge its exposure to changes in foreign exchange rates.
 
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 BUSINESS OF XPEDX
xpedx is a leading business to business distributor of paper, graphics, packaging and facility supplies products and related equipment and services in the United States and Mexico, with approximately $5.7 billion in net sales in 2013. xpedx markets and distributes these supplies, products and services to more than 58,000 customer locations as of December 31, 2013, including printers, publishers, data centers, manufacturers, higher education institutions, contract packaging/fulfillment providers, healthcare facilities, print design agencies, sporting and performance arenas, retail stores, government agencies, property managers and building service contractors, through more than 1,150 sales professionals, equipment representatives and service technicians.
xpedx offers an extensive portfolio of nationally recognized, high quality public and private brands of paper, graphics, packaging and facility supplies. xpedx’s branded portfolio includes Sustainable Forestry Initiative (SFI) and Sustainable Forestry Stewardship Council (FSC) certified paper and packaging products and facility supplies for environmentally conscious customers sold by Leadership in Energy and Environmental Design (LEED) certified professionals. xpedx also provides a wide range of services, including graphics and structural packaging design services and equipment installation and repair services, which promote the efficient and cost effective operations for its customers. Products and equipment are sourced from approximately 6,000 vendors in the United States and approximately 600 vendors in Mexico as of December 31, 2013, with xpedx serving as an important distribution channel for these vendors. As of December 31, 2013, the xpedx network consisted of 86 strategically located distribution centers in 39 states and Mexico and a fleet of approximately 1,500 trucks and trailers travelling approximately 32 million miles annually in the United States.
International Paper entered the distribution business in 1986 with its acquisition of several distribution companies that were part of the Hammermill Paper Company. Since then, International Paper has grown its distribution business both organically and through the acquisition of over 30 distribution businesses located across the United States and Mexico. International Paper’s distribution business was consolidated into a division operating under the xpedx name in 1998 to serve these important markets.
Veritiv Corporation is currently a wholly-owned subsidiary of International Paper, incorporated for the purpose of receiving and assuming the assets and liabilities primarily associated with xpedx as described under the headings “The Transactions” and “The Contribution and Distribution Agreement and the Ancillary Agreements” in this prospectus.
Reportable Segments
The xpedx business is organized into three reportable business segments—Print, Packaging and Facility Solutions. The following summary describes the products and services offered in each of the segments:
 
 	•	 	Print: The Print segment includes the sale and distribution of printing and communication papers, publishing papers, digital papers, specialty papers, graphics consumables, wide format papers, graphics equipment and related equipment installation and service. Within this segment, xpedx also operates the Bulkley Dunton Publishing Group (“Bulkley Dunton”), which focuses on the sale of coated and uncoated commercial printing and specialty papers to printers, converters, publishers, retailers and specialty businesses for use in magazines, catalogs, books, directories, gaming, couponing and retail inserts and direct mail. Products sold by Bulkley Dunton are predominately shipped directly from the manufacturer to the customer.	
 
 	•	 	Packaging: The Packaging segment includes the design, sourcing, sale and distribution of customized packaging and packaging equipment and the sale and distribution of custom and standard corrugated boxes, shrink and stretch films, tape, strapping, cushioning, labels, bags, mailers, molded fiber, bio-polymer and plastics and packaging equipment and related equipment installation and service. This segment also includes fulfillment and contract packaging services.	
 
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 	•	 	Facility Solutions: The Facility Solutions segment includes the sale and distribution of products necessary to maintain large public facilities, including hand towel and bathroom tissue, cleaning chemicals, disinfectants, skin care products, safety and hazard products, trash bags and receptacles, sanitary maintenance supplies, facilities maintenance equipment and related equipment installation and service. These products are sold to customers for use in their own facilities and for re-distribution.	
In 2013, xpedx had net sales and income from continuing operations before income taxes of $5.6 billion and $0.4 million, respectively, of which approximately $3.2 billion, and $27.4 million were from the Print segment, $1.6 billion, and $43.1 million were from the Packaging segment and $0.8 billion, and $(24.1) million were from the Facility Solutions segment, and $0.0 billion and $(46.0) million were from Corporate. Selected financial data for each of xpedx’s reportable segments as well as financial information concerning geographic areas can be found in Note 11 “Financial Information by Reportable Segment and Geographic Area,” in the notes to xpedx’s consolidated financial statements included elsewhere in this prospectus.
In each business segment, xpedx serves a diverse group of customers, from those with single location operations to multinational corporations. In 2013, no single customer accounted for more than 5% of xpedx’s total net sales. Key customer categories for each segment include the following:
 
 	•	 	Print: Commercial printers (including digital wide format and packaging printers), publishers, in-plant print facilities, data centers, print design agencies and in certain limited cases, high volume purchasers of paper.	
 
 	•	 	Packaging: Manufacturers, contract packaging/fulfillment firms and transportation companies.	
 
 	•	 	Facility Solutions: Manufacturers, higher education institutions, healthcare facilities, sporting and entertainment facilities, retail, food service, government agencies, property managers and building service contractors. xpedx’s customers include foodservice, industrial supply, janitorial and sanitary maintenance and healthcare distributors.	
The table below summarizes the percentage of net sales that xpedx received from each of its business segments in the years indicated:

Percentage of Net Sales by Segment	 	
Product	  	2013	 	 	2012	 	 	2011	 	
Print	  	 	57	% 	 	 	58	% 	 	 	60	% 	
Packaging	  	 	28	% 	 	 	26	% 	 	 	25	% 	
Facility Solutions	  	 	15	% 	 	 	16	% 	 	 	15	% 	
xpedx distributes well-known national and regional brand products as well as products marketed under xpedx’s private label brands. xpedx’s portfolio of private label products includes coated cut size and folio papers under the Endurance ® brand; cleaning chemicals, skin care products and sanitary maintenance supplies under the Reliable ® and Spring Grove ® brands; and packaging tapes and films under the Tufflex ® brand. Products manufactured under xpedx’s private label brands are manufactured in accordance with specifications established by xpedx. We believe that substantially all of xpedx’s private label products are similar or better in quality, price and other key attributes as compared to the nationally branded product. xpedx’s marketing and procurement teams monitor product quality of xpedx’s private brands, including periodic review of manufacturing plants of suppliers. For the year ended December 31, 2013, private label sales in the Print, Packaging and Facility Solutions segments accounted for approximately 12%, 4% and 7%, respectively, of that segment’s total sales.
Sales and Marketing
xpedx utilizes a market-driven strategy to identify targeted customer categories and continuously focuses on the evolving product and service needs of its customers. xpedx’s e-commerce platform, xpedx.com, allows customers to place orders for products, inquire on a 24/7 basis regarding the availability of inventory, check the
 
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status of outstanding orders and pending shipments and obtain a wide range of product information. In 2013, xpedx.com received approximately 4.7 million orders for a total $1.4 billion of products. xpedx completed a major upgrade of the platform in 2012, including installation of state-of-the-art software, which provides enhanced functionality and visibility to a broader range of products, thereby increasing opportunities for additional sales. xpedx management believes that its e-commerce capabilities provide a competitive advantage, especially with regard to customer retention.
We believe that ease of ordering, product selection, competitive pricing, the timely and accurate delivery of orders to facilitate customers’ efficient operations and xpedx’s national distribution capabilities are the most important factors in the marketing and distribution of products and services to customers and for maintaining strong relationships with customers. xpedx’s marketing and sales philosophy is based on four key principles:
 
 	•	 	choose markets carefully and establish a leadership position in priority markets;	
 
 	•	 	become the “face to the customer”;	
 
 	•	 	tailor service propositions to those for which customers will pay; and	
 
 	•	 	simplify business systems to facilitate execution on operations and sales.	
As of December 31, 2013, xpedx employs more than 1,150 trained and experienced sales professionals, equipment representatives and service technicians and more than 590 customer service representatives, who play a key role in developing and maintaining xpedx’s customer relationships. This group strives to learn customer needs, inform customers of new products and services, assure customers’ continued satisfaction and obtain customer feedback regarding both products and related services. Approximately 58% of xpedx’s experienced sales representatives are compensated on a commission-only basis, but are also eligible to participate in xpedx’s employee benefits programs. xpedx has developed an extensive sales training program designed to recruit and develop the sales capabilities of individuals with two years or less prior sales experience. While sales trainees are participating in the program, they are compensated on a salary basis combined with a reduced commission and bonus opportunity and full employee benefits. In addition to those sales representatives who receive commission-only compensation, approximately 31% of xpedx’s sales representatives receive only a portion of their compensation on a variable or commission basis.
As part of its customer relationships, xpedx also provides ancillary services to customers, including product and equipment selection advice, product usage reports, product usage training, assistance with demand planning and inventory control, as well as access to third party services designed to add value to the customer’s business. Since 2010, xpedx has significantly expanded its packaging design capabilities, establishing five packaging design centers. The design centers provide value added ancillary services through the development of custom packaging prototypes, which are utilized by xpedx sales professionals to assist customers in visualizing and testing new or updated packaging concepts or options. In addition, xpedx provides equipment installation, training and repair services for packaging, facility supplies and graphics related equipment.
Customers
Sales are made through a variety of means ranging from multi-year supply contracts to transactional sales. Many of xpedx’s largest customers have entered into multi-year supply agreements that set forth the terms and conditions of sale, including product pricing and warranties. xpedx has valuable, long-term relationships with many of its customers. Generally, xpedx’s customers are not required to purchase any minimum amount of products from it and place orders on an individual purchase order basis. However, xpedx enters into negotiated supply agreements with a minority of its customers. In the Packaging and Facility Solutions segments, xpedx’s business is less transactional, allowing the company to maintain longer-term primary or secondary supplier-customer relationships. No single customer accounted for more than 5% of xpedx’s total net sales in 2013.
 
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Operations
As of December 31, 2013, xpedx had a network of 68 distribution centers and 13 “mini-distribution” centers across the United States, totaling approximately 8.5 million square feet of warehouse space. xpedx’s five distribution centers in Mexico total approximately 0.6 million square feet. These facilities are strategically located in order to efficiently serve xpedx’s customer base in the surrounding area while also facilitating expedited delivery services for special orders. As used in this prospectus, a DC or Distribution Center is a warehouse which is the primary facility in a specific geography, generally a metro area. An MDC or Mini Distribution Center is one of 13 specific smaller warehouses that serve primarily small order volumes. MDCs can be co-located in a geographic area with a larger full-size DC. We operate, but did not include in our counts here, smaller satellite locations or cross docks even if they hold inventory.
During the past three years, xpedx has worked to optimize its delivery system by consolidating inventory in fewer but larger centralized locations, utilizing hub and spoke networks and installing state-of-the-art warehouse management systems in many DCs, along with truck routing software in most of our locations. xpedx’s logistics professionals have leveraged their collective expertise and the company’s technology to minimize overall logistics costs, reduce future facility and delivery fleet expansion needs and assure accurate and timely delivery of every customer order.
The map below shows xpedx’s locations as of December 31, 2013.

Timely and accurate delivery of a customer’s order, on a consistent basis, is an important criteria in a customer’s decision to purchase products and services from xpedx. Delivery of products is provided through two primary channels, either from xpedx’s warehouses or directly from the manufacturer. Less than truckload quantities of a product from a single manufacturer most often originate from an xpedx warehouse, while full truckload quantities are typically shipped directly from the manufacturer to the customer or the customer’s
 
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designated destination. The profitability on sales from the warehouse floor compared to direct sales can vary significantly, and the warehouse / direct mix of product deliveries varies by business segment. xpedx’s distribution centers offer a range of delivery options, from daily to monthly, depending on the customer’s needs and preferences, and the strategic placement of the distribution centers also allows for delivery of special or “rush” orders to many customers.
Purchasing and Merchandising
xpedx purchases from thousands of suppliers, both domestic and international, across its business segments. Although varying by segment, xpedx’s suppliers consist generally of large corporations selling brand name and private label products, and to a more limited extent, independent regional and private label suppliers. Suppliers are selected based on customer demand for the product and a supplier’s total service, cost and product quality offering. Purchases by xpedx from other businesses of International Paper represented approximately 13% of xpedx’s cost of products sold in fiscal 2013. Upon consummation of the Transactions, the combined company plans to continue purchasing uncoated paper, paperboard and corrugated products from International Paper, and under the terms of the Supply Agreement described under the heading “The Contribution and Distribution Agreement and the Ancillary Agreements—Supply Agreements” in this prospectus will purchase uncoated paper and paperboard from International Paper.
xpedx’s centralized sourcing organization supports the warehouse and handles the purchasing of core public and private brands from key national suppliers in each segment. The Bulkley Dunton business operates as a direct ship brokerage business aligned with xpedx’s core supplier strategy. In addition, under the guidance and oversight of the centralized sourcing team, xpedx’s merchandising personnel located within individual distribution centers source custom products and products not available within xpedx’s core offering in order to meet specialized customer needs.
The product sourcing program is designed to ensure that xpedx is able to offer consistent product selections and market competitive pricing across the enterprise while maintaining the ability to serve localized market requirements. xpedx’s procurement program is also focused on replenishment which includes purchase order placement and managing the total cost of inventory by improving the number of days inventory is on hand, negotiating favorable payment terms and maintaining vendor-owned and vendor-managed programs. As one of the largest purchasers of paper, graphics, packaging and facility supplies, xpedx can qualify for volume allowances with some suppliers and can realize significant economies of scale. xpedx in turn enters into incentive agreements with certain of its largest customers, which are generally based on sales to these customers.
Working Capital
The combined company’s working capital needs generally reflect the need to carry significant amounts of inventory in our distribution centers to meet delivery requirements of our customers, as well as significant accounts receivable balances. As is typical in our industry, our customers often do not pay upon receipt, but are offered terms which are heavily dependent on the specific circumstances of the sale. It is expected that our accounts receivable balances will generally reflect average days that sales are outstanding of approximately 40-45 days after invoicing.
Corporate Headquarters and Shared Service Center
International Paper’s corporate staff currently provides a number of services to xpedx in the areas of accounting and finance, treasury, cash management, employee benefits, labor relations, real estate and construction, information technology and systems, corporate governance, investor relations, risk management and insurance, human resources, procurement, legal, business strategy, tax compliance and government relations. Upon consummation of the Merger Agreement, International Paper will continue to provide certain of these services for up to 24 months following the Distribution pursuant to the Transition Services Agreement, as further described under the heading “The Contribution and Distribution Agreement and the Ancillary Agreements—Transition Services Agreement” in this prospectus.
 
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xpedx’s Shared Services, based in Loveland, Ohio, along with certain outsourced arrangements, performs centralized support services for employees, xpedx distribution centers, Bulkley Dunton and customers, including human resources, payroll administration, training and development, marketing, financial services such as vendor payments, credit, information technology, e-Commerce, certain accounting and logistics services, national account sales and administration, sales and use tax administration, procurement and sales support.
Warehouse Network Optimization and Capital Improvements
Since 2010, xpedx has focused on improving productivity and customer service by consolidating from 107 distribution centers and 122 retail outlets with 11.5 million square feet of storage space to our footprint of 73 distribution centers and 13 mini-distribution centers with approximately 9.1 million square feet of storage space as of December 31, 2013. As part of this transition, capital improvements for warehouse fixtures and equipment, along with state-of-the-art warehouse management systems in many locations, were added. These expenditures were approximately $9.8 million, $13.3 million and $17.4 million during 2013, 2012 and 2011, respectively. During the three years ended December 31, 2013, capital expenditures were financed primarily by internally generated funds.
Employees
As of March 31, 2014, xpedx had approximately 4,750 full time employees in the United States and approximately 420 in Mexico. In the United States approximately 10% of employees were represented by unions, primarily the International Brotherhood of Teamsters. Labor contract negotiations are handled on an individual basis by a team of International Paper and xpedx Human Resources and Legal personnel. Less than 5%, of xpedx’s unionized employees had collective bargaining agreements expire during fiscal 2013. We consider labor relations to be good.
Competition
While xpedx is one of the few distributors to have a national distribution network in each of its business segments, there is significant existing and emerging competition in each of the business segments in which xpedx distributes products and services. The types and levels of competition vary significantly by segment.
The following summary briefly describes the key competitive landscape in each of the business segments:
 
 	•	 	Print: There are hundreds of regional and local companies engaged in the marketing and distribution of paper and graphics products. While we believe there are few national distributors of paper and graphics products similar to xpedx, several regional and local distributors have cooperated together to serve customers nationally. xpedx’s customers also have the opportunity to purchase product directly from paper and graphics manufacturers, including International Paper. In addition, competitors also include regional and local specialty distributors, office supply and big box stores, independent brokers and large commercial printers that broker the sale of paper in connection with the sale of their printing services.	
 
 	•	 	Packaging: The packaging market is fragmented, consisting of competition from multiple regional packaging distributors, national and regional manufacturers of packaging materials, independent brokers, and both catalog based and online business-to-business suppliers. We believe there are few national packaging distributors with substrate neutral design capabilities similar to xpedx’s capability.	
 
 	•	 	Facility Solutions: There are few national but numerous regional and local distributors of facility supplies. Several groups of distributors have created strategic alliances among multiple distributors to provide broader geographic coverage for larger customers. Other key competitors include the business-to-business divisions of big box stores, purchasing group affiliates, and both catalog based and online business-to-business suppliers.	
 
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We believe that xpedx’s competitive advantages include its over 1,500 sales and marketing associates; the breadth of xpedx’s selection of quality products including its high quality private brands; xpedx’s e-commerce platform which provides customers with efficient product ordering, real time information on product availability, and individual order status. The breadth of products distributed and services offered, the diversity of the types of customer served, xpedx’s broad geographic footprint in the United States and Mexico buffers the impact of regional economic declines while also providing a network to readily serve xpedx’s national accounts.
Government Relations
As a distributor, xpedx’s transportation operations are subject to the U.S. Department of Transportation Federal Motor Carrier Safety Regulations.
The xpedx business is also subject to federal, state and local regulations regarding licensing and inspection of its facilities, including compliance with the U.S. Occupational Safety and Health Act. These regulations require xpedx to comply with health and safety standards to protect its employees from accidents and establish hazard communication programs to transmit information on the hazards of certain chemicals present in the Jan-San products xpedx distributes.
xpedx is also subject to regulation by numerous U.S. and Mexican federal, state and local regulatory agencies, including but not limited to, the U.S. Department of Labor which sets employment practice standards for workers. Although xpedx is subject to other U.S. and Mexican federal, state and local provisions relating to the protection of the environment and the discharge or destruction of materials, these provisions do not materially impact the use or operation of the company’s facilities. Compliance with these laws has not had, and is not anticipated to have, a material effect on xpedx’s capital expenditures, earnings or competitive position.
Intellectual Property
The xpedx business has numerous well recognized trademarks, including private brands, in each of the segments within which xpedx distributes its products. In 2013, sales of products sold under private brands accounted for approximately 9% of total sales. xpedx’s U.S. trademarks are effective for a 10-year period, and xpedx generally renews its trademarks before the expiration dates unless a particular trademark is no longer in use. xpedx does not have any material patents or licenses.
As a distributor of products and services, xpedx does not manufacture any products. During the last three years, xpedx has not had any research and development expenditures.
Litigation
xpedx is involved in legal proceedings arising in the ordinary course of business. xpedx is not involved in any legal proceedings that we believe will result, individually or in the aggregate, in a material adverse effect upon its financial condition or results of operations.
Properties
We consider xpedx’s properties to be suitable and adequate for their intended purposes. xpedx continually evaluates location, size and attributes to maximize efficiency, deliver top quality customer service, and achieve economies of scale.
Executive Offices
The office space at xpedx’s current operational headquarters and Shared Services center in Loveland, Ohio area totals 163,000 square feet of space owned by International Paper. Following the Distribution, we will lease
 
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this space from International Paper. This lease is expected to be for two years. The xpedx business also leases approximately 13,000 square feet of office space in New York City which houses Bulkley Dunton’s primary sales and business offices. In addition, substantially all of xpedx’s distribution centers have a portion of the leased or owned space dedicated to office space for the support of that distribution center or a group of distribution centers’ sales and operations.
Distribution Centers
As of December 31, 2013, xpedx maintained a total of approximately 9.1 million square feet of warehouse space in 86 distribution centers, including 0.6 million square feet of warehouse space in distribution centers located in and serving customers in Mexico. Of the 9.1 million square feet of distribution space, 2.1 million square feet was owned and 7 million square feet was leased as of December 31, 2013. We believe that the distributions centers are adequately maintained and suitable for xpedx’s ongoing operations. We also consider each of the distribution centers important to maintaining xpedx’s network of operations and ability to serve customers.
 
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 BUSINESS OF UNISOURCE
Overview
Unisource is a leading distributor of printing and business paper products, packaging supplies and equipment, and facility supplies and equipment, primarily in the United States and Canada. Additionally, Unisource has international operations in Europe, Asia and Latin America. Unisource is one of the largest independent print, packaging and facility supplies distributors in North America with approximately $4.1 billion in net sales in fiscal 2013. Unisource markets and distributes its products, supplies and services to approximately 48,000 customers, based on customer bill-to locations. Unisource is organized into six business units (U.S. Distribution, Canada Distribution, Graphic, Rollsource, PaperPlus and UGS) and sells four primary product categories (Print, Packaging, Facility Supplies and Other) as described below. The print market has experienced a secular decline in North America for several years as a result of increasing electronic distribution and communication and eCommerce. Unisource is addressing the declining print market by focusing on global corporate end-use customers who have a ready need for improved paper and print consultative and management services and by investing in and focusing on its three other product categories.
Unisource stocks more than 80,000 different commercial paper, business paper, imaging supplies, packaging supplies and equipment products and facility supplies and equipment products. Through an expansive supplier network, Unisource also has ready access to thousands of additional products to fulfill its customers’ specific requirements. Unisource sells its products to a diverse customer base that includes building service contractors, catalog and direct mail providers, commercial printers, consumer goods providers, cruise lines, food processors, healthcare providers, higher education institutions, government agencies, fulfillment industry, hotels and resorts, manufacturers and property managers. No single customer accounted for more than 5% of Unisource’s net sales for fiscal 2013.
History
Unisource was incorporated in August 1975. Prior to December 31, 1996, Unisource was a wholly-owned subsidiary of Alco Standard Corporation (“Alco”). In December 1996, in connection with Alco’s spin-off of Unisource, Unisource became a separate public company. Unisource was acquired by Georgia-Pacific, now owned by Koch Industries, in July 1999. In November 2002, Bain Capital acquired approximately a 60 percent ownership interest in Unisource, while Georgia-Pacific retained approximately a 40 percent ownership interest.
Unisource Business Units
The following is a brief summary of Unisource’s business units.
U.S. Distribution
The U.S. Distribution business sells products manufactured by a wide variety of vendors, including those sold under its Unisource brands. The U.S. Distribution business unit generated approximately $2,333.7 million, or 57.0%, of Unisource’s net sales for fiscal 2013. The U.S. Distribution business unit provides services through a network of 75 distribution facilities in 40 states and a fleet of approximately 296 trucks to sell and supply its products in all 50 states in the United States. The U.S. Distribution business utilizes approximately 8.9 million square feet of warehouse space. The U.S. Distribution business sells products in each of Unisource’s primary product categories.
Print product category net sales were approximately $1,076.3 million, or 46.1%, of the U.S. Distribution business’ total net sales for fiscal 2013. Commercial printers, retailers, publishers, business form manufacturers, direct mail firms and the digital printing industry represent the key markets for the U.S. Distribution print products. The key print products included coated paper, uncoated paper and copy paper, which are most often used in catalogs, brochures, advertising supplements, annual reports, business forms, retail circulars and other imaging and copy formats.
 
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Packaging product category net sales were approximately $861.0 million, or 36.9%, of the U.S. Distribution business’ total net sales for fiscal 2013. Manufacturing, fulfillment industry, food processors, commercial printers, retail and healthcare represent key markets for packaging products. Significant products within the Packaging product category include corrugated and folding carton consumer goods packaging, packaging films, protective packaging supplies and packaging tapes. The U.S. Distribution business provides two engineering solutions centers which design and test packaging solutions for Unisource’s customers.
Facility Supplies product category net sales were approximately $334.5 million, or 14.3%, of the U.S. Distribution business’ total net sales for fiscal 2013. Key markets for this product category include building service contractors, manufacturers, healthcare, governmental agencies, food processors, fulfillment industry and hospitality. Products sold in this product category include towels and tissues, commercial cleaning chemicals, trash can liners and sanitary maintenance supplies and equipment.
The Other product category within the U.S. Distribution business includes Unisource Logistics Solutions (“ULS”), which was started by the U.S. Distribution business in 2009 to optimize its supply chain capabilities and warehouse and transportation network. ULS provides customers with outsourced supply chain solutions, also known as third-party logistics services, which include freight brokerage, material handling, warehousing and kitting. Net sales for this product category represented approximately $61.9 million, or 2.7%, of the U.S. Distribution business’ net sales for fiscal 2013.
Canada Distribution
The Canada Distribution business sells products manufactured by a wide variety of vendors, including those products sold under its Unisource brands.
The Canada Distribution business represented approximately $846.5 million, or 20.7%, of Unisource’s net sales for fiscal 2013. The Canada Distribution business provides services through a network of 17 distribution facilities and a fleet of approximately 102 trucks, with warehouse locations in 9 provinces that sell products to all 13 provinces and territories. The Canada Distribution business utilizes approximately 1.8 million square feet of warehouse space. The Canada Distribution business sells primarily products in the Print, Packaging and Facility Supplies product categories.
Print net sales were approximately $294.0 million, or 34.7%, of the Canada Distribution business total net sales for fiscal 2013. Key markets for print products include commercial printers, publishers, retailers, distributors, advertising and designers and digital printers. Significant products in this category include copy paper, coated paper and uncoated paper that are most often used in catalogs, brochures, advertising supplements, annual reports, business forms, retail circulars and other imaging and copy formats.
Packaging net sales were approximately $221.4 million, or 26.2%, of the Canada Distribution business net sales for fiscal 2013. Grocery, food processors, distributors, manufacturers and retailers represented key markets for packaging products. Significant products in this category include food packaging, packaging supplies, flexible packaging films, and corrugated and folding carton consumer goods packaging.
Facility Supplies net sales were approximately $331.1 million, or 39.1%, of the Canada Distribution business net sales for fiscal 2013. Key markets for facility supplies include distributors, retailers, food service, hospitality, grocery, healthcare and property managers. The key products sold in this category include towels and tissues, food service related products, commercial cleaning chemicals and trash can liners.
Graphic
Graphic is Unisource’s paper and print brokerage business. Graphic sells paper products and print management services and also provides eCommerce procurement and supply chain management software that
 
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enables its customers to centralize and standardize their paper procurement processes. Graphic has operations in the United States, Mexico, the United Kingdom, Belgium and Brazil and represented approximately $671.6 million, or 16.4%, of Unisource’s net sales for fiscal 2013.
Rollsource
Rollsource provides customized paper conversion services of commercial printing paper for distribution. Rollsource’s key markets are document centers and form printers. Rollsource represented approximately $125.4 million, or 3.1%, of Unisource’s net sales for fiscal 2013.
PaperPlus
PaperPlus primarily serves the small printer markets through its 39 retail locations throughout the United States. The products offered primarily include uncoated free sheet paper, copy paper and coated free sheet paper. PaperPlus represented approximately $56.2 million, or 1.4%, of Unisource’s net sales for fiscal 2013.
Unisource Global Solutions
UGS is Unisource’s packaging design and engineering business. UGS designs, develops, tests and sources packaging products for its customers. UGS operates in the United States, China, Malaysia, Taiwan, Singapore and Poland and represented approximately $55.7 million, or 1.4%, of Unisource’s net sales for fiscal 2013. UGS has its headquarters in Chandler, Arizona, which is also the location of its primary packaging design, engineering and testing facility. This facility has capabilities that allow UGS to design and test a wide variety of packaging materials. Recently, the UGS business has been investigating the possibility of engaging in limited packaging manufacturing. During the fiscal years 2011, 2012 and 2013, UGS invested an aggregate amount of $7.7 million related to packaging, design, testing and select packaging manufacturing equipment which is located at its Chandler, Arizona and Lodz, Poland facilities. During fiscal 2013, the Lodz, Poland facility generated $0.9 million of net sales related to its startup manufacturing initiative.
Unisource Product Categories
Unisource product categories are based on product designations used by its U.S. Distribution and Canada Distribution businesses. Unisource’s Graphic, Rollsource and PaperPlus businesses sell primarily items in the Print product category and UGS sells products primarily in the Packaging product category. The Other product category is primarily offered by the U.S. Distribution business.
The U.S. Distribution business sells packaging and facilities supplies equipment, and the Canada Distribution business sells wide-format printing, packaging and facilities supplies equipment, each on a limited basis to compliment their product lines. The aggregate amount of equipment sales represented 0.8% of Unisource’s net sales for fiscal 2013. Additionally, the U.S. Distribution business, including the ULS division, the Canada Distribution business and UGS provide services for fees which include third party logistics services, equipment maintenance and repair services and packaging design services. The aggregate amount of revenue derived from such services was 1.7% of Unisource’s net sales for 2013.
These product categories, as a percentage of consolidated net sales, were represented as follows:

 	  	Fiscal Year Ended	 	
 	  	December 31, 2013	 	 	December 29, 2012	 	 	December 31, 2011	 	
Print	  	 	54	% 	 	 	57	% 	 	 	58	% 	
Packaging	  	 	28	% 	 	 	26	% 	 	 	24	% 	
Facility Supplies	  	 	16	% 	 	 	16	% 	 	 	18	% 	
Other	  	 	2	% 	 	 	1	% 	 	 	0	% 	
 
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The following describes the major product lines and services and customers of each of Unisource’s Print, Packaging, Facility Supplies and Other product categories.
 
 	•	 	Print : Unisource’s Print product category represented approximately $2.2 billion in net sales for fiscal 2013. This product category encompasses the sale and distribution of high quality commercial printing, writing, copying and digital printing paper to commercial printers, retailers, publishers, business form manufacturers, direct mail firms and the digital printing industry, as well as corporate and retail copy centers, in-plant print facilities, government institutions and other paper-intensive businesses. These products are used in a variety of catalogs, brochures, advertising supplements, annual reports, business forms, retail circulars and other imaging or copying formats.	
Unisource also provides eCommerce procurement and supply chain management solutions to its printing customers through its uAdvantage integrated electronic paper management system, as well as customized paper conversion services through its Rollsource centers and retail products and services through its 39 PaperPlus locations throughout the United States. Graphic provides managed print and promotional procurement solutions to a variety of multi-national companies and commercial printers.
Unisource also provides a range of paper products under its own brands such as Nordic, Econosource, uBrand, Starbrite and Comet.
 
 	•	 	Packaging : Unisource’s Packaging product category represented approximately $1.1 billion in net sales for fiscal 2013. The Packaging product category encompasses the sale and distribution of consumer goods packaging, packaging for industrial or manufacturing components and point-of-sale displays, as well as the sale and distribution of single function or fully automated packaging machines. Products in this category include corrugated and folding carton consumer goods packaging, packaging films, protective packaging and packaging tapes. Unisource’s engineering solutions centers design and test packaging solutions. Unisource provides several packaging products and equipment under its Unisource brand, which include stretch film, carton sealing tape and stretch wrapping equipment.	
 
 	•	 	Facility Supplies : Unisource’s Facility Supplies product category represented approximately $0.7 billion in net sales for fiscal 2013. The Facility Supplies product category involves the sale and distribution of a broad range of supplies, equipment and service, principally to manufacturers, food processors, retail, health care providers, building service contractors and property managers, hospitality and lodging industry, higher education and government agencies. Products distributed include towels, tissues, wipes and dispensers, can liners, commercial cleaning chemicals, soaps and sanitizers, sanitary maintenance supplies and equipment, safety and hazard supplies, and shampoos and amenities from leading manufacturers. Unisource also provides a wide range of facility supplies products under its own brands such as uBrand, Respect PUR, Chemtrol and others.	
 
 	•	 	Other: Unisource’s Other product category represented approximately $0.1 billion in net sales for fiscal 2013. The Other product category includes outsourced supply chain solutions, also known as third-party logistics services, which includes freight brokerage, material handling, warehousing and kitting.	
A majority of Unisource’s sales are not under formal written contractual arrangements and to the extent written customer agreements exist, these are usually short-term in nature. For fiscal 2013, approximately 14% of Unisource’s net sales were made under its own private label brands.
Working Capital
Unisource’s working capital needs generally reflect the need to carry significant amounts of inventory in its distribution centers to meet delivery requirements of its customers, as well as significant accounts receivable balances. As is typical in the industry, customers often do not pay upon receipt, but are offered terms which are heavily dependent on the specific circumstances of the sale. It is expected that the accounts receivable balances will generally reflect average days that sales are outstanding of approximately 40-45 days after invoicing.
 
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Distribution and Logistics
Unisource provides supply chain management through its 92 North American distribution facilities, providing next-day services to most major metropolitan areas in the United States and Canada. Unisource offers variable access to approximately 10.7 million square feet of warehouse space spread among its North American distribution facilities. Unisource also offers delivery services on its private fleet of approximately 400 “Big Red” trucks, supplemented by its relationships with the nation’s top freight carriers. ULS provides supply chain analytics, e-fulfillment and inventory management solutions. Additionally, UGS operates an approximately 90,000 square foot distribution and packaging manufacturing facility in Lodz, Poland.
Unisource distributes products from its distribution facilities and through mill direct-to-customer deliveries. Approximately 51% and 71% of Unisource’s Print and Packaging product category net sales in fiscal 2013, respectively, were generated through its own distribution facilities or on a consignment basis, and approximately 49% and 29%, respectively, were primarily mill direct-to-customer deliveries. The quantity of the goods ordered and the delivery lead times are the primary factors involved in determining whether an order will be fulfilled from a Unisource distribution facility or direct-shipped to the customer from a mill or manufacturer. Facility supplies products are distributed primarily from Unisource’s distribution facilities.
Unisource maintains distribution facilities in 40 states in the United States, in 9 provinces in Canada and at one location in Poland.
Unisource operates through 93 distribution facilities, of which 89 are leased and 4 are owned. Unisource generally prefers to lease its warehouse locations, as it provides the flexibility to expand or relocate its facilities at the end of the lease terms to serve evolving markets and meet changes in business needs. Unisource’s leased distribution facilities comprise approximately 10.5 million square feet of warehouse space, while owned locations comprise approximately 0.3 million square feet of warehouse space. The following table summarizes Unisource’s distribution facilities by country, whether leased or owned and by respective square footage.

 	  	Number of Distribution Facilities	 	  	Approximate Warehouse Square Footage	 	
 	  	 	 	  	 	 	  	 	 	  	(in millions)	 	
Country	  	Leased	 	  	Owned	 	  	Total	 	  	Leased	 	  	Owned	 	  	Total	 	
U.S.	  	 	74	  	  	 	1	  	  	 	75	  	  	 	8.8	  	  	 	0.1	  	  	 	8.9	  	
Canada	  	 	14	  	  	 	3	  	  	 	17	  	  	 	1.6	  	  	 	0.2	  	  	 	1.8	  	
Poland	  	 	1	  	  	 	—	  	  	 	1	  	  	 	0.1	  	  	 	—	  	  	 	0.1	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	89	  	  	 	4	  	  	 	93	  	  	 	10.5	  	  	 	0.3	  	  	 	10.8	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Unisource believes that its distribution facilities are adequately maintained and suitable for its ongoing operations. Unisource also considers its distribution facilities important to maintaining its network of operations and its ability to provide high quality services to its customers.
International Operations
Unisource has international operations in Canada, Latin America, Asia and Europe. During fiscal 2013, Unisource’s international net sales were approximately $896.0 million with approximately $846.5 million attributable to the Canada Distribution business and approximately $49.5 million attributable to other international operations. As of December 31, 2013, approximately 24% of Unisource’s net assets were attributable to foreign operations.
 
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Canada and other international operations, as a percentage of consolidated net sales, were represented as follows:

 	  	Fiscal Year Ended	 	
(% of Net sales)	  	December 31, 2013	 	 	December 29, 2012	 	 	December 31, 2011	 	
Canada	  	 	21	% 	 	 	21	% 	 	 	23	% 	
Other international	  	 	1	% 	 	 	2	% 	 	 	4	% 	
Net assets in Canada and other international countries were as follows:

 	  	Fiscal Year Ended	 	
 	  	December 31, 2013	 	  	December 29, 2012	 	
 	  	(Dollars in millions)	 	
Canada	  	$	90.5	  	  	$	84.9	  	
Other international	  	 	4.3	  	  	 	10.4	  	
There are certain risks attributable to foreign operations, including, but not limited to, currency fluctuations and the political environment.
Suppliers/Vendors
Products and equipment sourced in North America, Europe and Asia include approximately 2,800 vendors in the United States, approximately 600 vendors in Canada and approximately 100 vendors in Europe and Asia, with Unisource serving as an important North American distribution channel for many of these vendors.
Unisource’s print suppliers include the major North American paper producers. Its ten largest suppliers accounted for approximately 60% of its paper and printing purchases in fiscal 2013. Unisource’s packaging suppliers include major North American packaging material manufacturers and suppliers. Its ten largest suppliers accounted for approximately 38% of its packaging purchases in fiscal 2013. Unisource has numerous facility supplies product vendors. Unisource’s ten largest suppliers in this category accounted for approximately 59% of facility supplies and equipment product purchases in fiscal 2013.
Unisource does not anticipate a supply interruption from any of its significant vendors of Print, Packaging or Facility Supplies product categories, however, if any such interruption were to occur, Unisource believes it would be able to arrange comparable alternative supply arrangements.
Fluctuations in Operating Results; Sensitivity to Pulp and Paper Prices
Unisource’s net sales and net income (loss) have fluctuated from quarter-to-quarter due to a combination of factors, including changes in pulp and paper prices. These price changes can significantly impact Unisource’s Print product category, which accounted for 54% of net sales in fiscal 2013. Prices rose steadily in 2010 following the economic downturn, but prices have generally trended lower over the course of the past several years, driven by over-capacity and falling secular demand.
Rising pulp prices can produce higher profits and often represent favorable market conditions for Unisource, especially when market conditions allow Unisource to quickly pass along increased product costs to customers. Declining pulp and paper prices generally produce lower revenues and profits for Unisource even when volume and trading margin percentages remain constant. Declines in pulp and paper prices also may alter purchasing patterns and cause customers to defer paper purchases or deplete inventory levels until long-term price stability occurs. See “Risk Factors—Risk Related to the Combined Company’s Business—Changes in prices for raw materials, including pulp and paper, could negatively impact the combined company’s results of operations and cash flows.”
 
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Sales and Marketing
Unisource has approximately 750 sales representatives who sell current and new product solutions to its customers. Unisource’s extensive distribution network and national presence enable it to service national account customers, and its large size gives it important economies of scale in product purchasing and supply chain management. In addition, Graphic provides managed print and promotional procurement solutions to a variety of multi-national companies and commercial printers.
Unisource has developed and implemented a business and marketing strategy that focuses on delivering value-added services to its customers. Unisource’s core growth strategy is to help Fortune 1000 companies efficiently drive customer loyalty by providing complete, integrated consultative solutions. The following solutions comprise Unisource’s fundamental set of offerings:
 
 	•	 	innovative, custom packaging and integrated logistics solutions;	
 
 	•	 	full service print management solutions; and	
 
 	•	 	value-added facilities solutions and support services.	
Competition
Each of Unisource’s businesses operates within highly competitive markets. One characteristic that all of its target markets share is strong price competition. Unisource believes that the principal competitive factors in these markets include price, responsiveness to customer needs, quality of customer service and the range of products maintained in inventory for quick delivery.
Unisource’s Print product category’s competitors consist of numerous regional distributors and independent local distributors and very few distributors with a national presence. Several regional and local distributors have joined together to provide marketing and distribution capabilities across a broad geographic area for national customers.
The market for packaging products is extremely fragmented, and Unisource’s packaging products face competition from national and regional packaging distributors, national and regional manufacturers of packaging materials, independent brokers and both catalog-based and online business-to-business suppliers.
In the fragmented facility supplies market, Unisource competes with a large number of local and regional distributors, as well as several national distributors. Large customers, even national accounts, often desire to do business with a network of independent regional distributors rather than depend on one company such as Unisource. Other key competitors include the business-to-business divisions of big box retailers, purchasing group affiliates and both catalog-based and online business-to-business suppliers.
Information Technology Systems
Unisource has made significant investments in its enterprise-wide eBusiness Solutions platform. Its eBusiness Solutions platform provides real-time critical information, increases ordering efficiency, reduces costs and improves accuracy across its customers’ supply chain. eBusiness Solutions includes a user-friendly eCommerce platform for real-time visibility across all account activity, Electronic Data Interchange (“EDI”) capabilities, end-to-end enterprise integration, third-party partnerships, integrated paper and print management solutions via its uAdvantage solutions and technology for automatic replenishment and inventory management.
Unisource’s eCommerce site is used by most of its businesses with its facility supplies and packaging customers using it most frequently to place online orders. Advanced integration solutions, system-to-system integration and EDI are used most frequently by Unisource’s large national accounts.
 
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Unisource utilizes a variety of sophisticated packaged and custom system solutions to support order-to-cash, procure-to-pay, general management and administration as well as reporting and analytics functions. More recent technology investments include customer relationship management, business intelligence, pricing optimization and administration, sales compensation management and financial planning and consolidation tools.
Capital Improvements
Over the past three years through fiscal 2013, Unisource invested approximately $66.5 million primarily in information technology systems for internal-use, as described above, warehouse and other building improvements, transportation and warehouse moving equipment and packaging design, testing and select packaging manufacturing equipment. Unisource believes that investments in these areas enable it to continually improve operational efficiency throughout the distribution process from sales order entry to material receipt and handling, through product delivery to the customer. Additionally, capital expenditures to implement or enhance its enterprise resource planning systems have enabled Unisource to more efficiently service customers who have a geographical presence throughout North America.
Employees
Unisource employs approximately 4,200 people, including sales, supply chain, and customer service personnel, on a worldwide basis, located primarily in North America. Approximately 73% of Unisource’s total workforce is employed in the United States, approximately 24% of its work force is employed in Canada and the remaining 3% is employed in Asia, Latin America and Europe. Approximately 10% of Unisource’s worldwide employees are represented by 26 collective bargaining agreements (“CBAs”). In the United States, approximately 11% of Unisource’s employees are represented by CBAs. There are 21 separate CBAs in the United States, with a total of 3 unions and approximately 87% of these unionized employees are covered under CBAs with the International Brotherhood of Teamsters. In Canada, approximately 11% of Unisource’s employees are unionized under 5 CBAs and approximately 80% of these unionized employees are covered under CBAs with Unifor.
There have been no strikes or work stoppages in the last 10 years. Unisource believes its relations with its employees and unions are good.
Properties
Unisource’s corporate offices are located in the Atlanta, Georgia metropolitan area located at 6600 Governors Lake Parkway, Norcross, GA 30071. This facility consists of approximately 47,000 square feet of office space.
Unisource considers its properties to be suitable and adequate for their intended purposes. See additional information regarding Unisource’s distribution facilities provided above in the section captioned “—Distribution and Logistics.”
Intellectual Property
Unisource uses a number of trademarks, service marks and trade names which are important to its business. The Unisource name and related logos are Unisource’s most important marks and are used throughout its business. The Unisource name and related logos are registered throughout North America and in other countries where relevant to Unisource’s business operations. Unisource’s rights in these marks may generally be renewed an unlimited number of times. Other trademarks, service marks and trade names which Unisource uses in its business are registered in the U.S. and Canada and certain of which are maintained in other countries.
In fiscal 2013, net sales of products sold under Unisource’s private brands accounted for approximately 14% of total net sales. Unisource does not have any material patents or licenses.
 
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Regulation
As a distributor, Unisource’s transportation operations are subject to the U.S. Department of Transportation Federal Motor Carrier Safety Regulations. Unisource’s business is also subject to federal, state and local regulations regarding licensing and inspection of its facilities, including compliance with the U.S. Occupational Safety and Health Act. These regulations require Unisource to comply with health and safety standards to protect its employees from accidents and establish hazard communication programs to transmit information on the hazards of certain chemicals present in products distributed by Unisource. Unisource is also subject to federal, state and local regulations related to certain products it resells or warehouses. All private label products are manufactured by contract manufacturers. Federal, state and local provisions relating to the protection of the environment or the discharge of hazardous materials or relating to products have not had, and are not expected to have, a material effect on Unisource’s financial condition or competitive position.
Unisource is also subject to regulation by numerous U.S., Canadian and other federal, state and local regulatory agencies, including but not limited to, the U.S. Department of Labor which establishes employment practice standards for workers. Compliance with these laws has not had, and is not anticipated to have, a material effect on Unisource’s financial condition or competitive position.
Unisource is subject to unclaimed property (escheat) laws and regulations in the United States. On February 14, 2013, Unisource was notified by the State of Delaware that they intended to examine the books and records of Unisource to determine compliance with Delaware escheat laws. Since that date, seven other states have joined with Delaware in the audit process. Unisource has determined that the ultimate outcome cannot be estimated at this time. Claims or liabilities could be asserted and such outcomes could have a material impact on Unisource’s financial position, results of operations and cash flows.
Litigation
Unisource is involved in legal proceedings arising in the ordinary course of business. Unisource is not involved in any legal proceedings that it believes will result, individually or in the aggregate, in a material adverse effect upon Unisource’s financial condition, results of operations and cash flows.
 
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 MANAGEMENT OF SPINCO FOLLOWING THE TRANSACTIONS
The following table sets forth certain information, as of May 31, 2014, concerning our directors and our executive officers following the completion of the Transactions.

Name	  	Age	  	Position	
Mary A. Laschinger	  	54	  	Chief Executive Officer and Chairman	
Stephen J. Smith	  	50	  	Senior Vice President and Chief Financial Officer	
Charles B. Henry	  	49	  	Senior Vice President Integration and Change Management	
Mark W. Hianik	  	54	  	Senior Vice President, General Counsel and Corporate Secretary	
Timothy D. Kutz	  	50	  	Senior Vice President Supply Chain^	
Thomas S. Lazzaro	  	50	  	Senior Vice President Field Sales and Operations	
Joseph B. Myers	  	49	  	Senior Vice President Facility Solutions, Strategy and
Commercial Excellence	
Barry R. Nelson	  	49	  	Senior Vice President Publishing and Print Management	
Elizabeth Patrick	  	46	  	Senior Vice President and Chief Human Resources Officer	
Neil Russell	  	42	  	Senior Vice President Corporate Affairs	
Darin W. Tang	  	48	  	Senior Vice President Packaging^	
Daniel J. Watkoske	  	45	  	Senior Vice President Print	
Allan R. Dragone, Jr.	  	58	  	Director*	
Daniel T. Henry	  	64	  	Director*	
Tracy A. Leinbach	  	54	  	Director*	
Seth A. Meisel	  	41	  	Director*	
William E. Mitchell	  	70	  	Director*	
Michael P. Muldowney	  	50	  	Director*	
Charles G. Ward, III	  	61	  	Director*	
John J. Zillmer	  	58	  	Director*	

*	Messrs. Dragone, Henry, Mitchell, Meisel, Muldowney, Ward and Zillmer and Ms. Leinbach will become directors upon consummation of the Transactions.	
^	Timothy D. Kutz will become Senior Vice President Supply Chain and Darin W. Tang will become Senior Vice President Packaging upon consummation of the Transactions.	
Executive Officers
The Merger Agreement provides that, as of the completion of the Transactions, the executive officers of SpinCo will consist of the following executives. All of these executives who will be our executive officers following the completion of the Transactions are currently employees of either International Paper or Unisource. Following the completion of the Transactions, none of our executive officers will be employees of International Paper.
Mary A. Laschinger , Chief Executive Officer and Chairman of the Board of Directors, has served as Senior Vice President of International Paper Company, a global packaging and paper manufacturing company, since 2007 and as President of its xpedx distribution business since January, 2010. She previously served as President of International Paper’s Europe, Middle East, Africa and Russia business, Vice President and General Manager of International Paper’s Wood Products and Pulp businesses and in other senior management roles at International Paper in sales, marketing, manufacturing and supply chain. Ms. Laschinger joined International Paper in 1992. Prior to joining International Paper, Ms. Laschinger held various positions in product management and distribution at James River Corporation and Kimberly-Clark Corporation. Ms. Laschinger has significant knowledge and executive management experience running domestic and international manufacturing and distribution businesses as well as a deep understanding of xpedx and the industry in which it operates. Ms. Laschinger also serves as a director of Kellogg Company.
 
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Stephen J. Smith,  Senior Vice President and Chief Financial Officer,  was hired by International Paper in March 2014 to serve in this role. Previously, Mr. Smith served as Senior Vice President and Chief Financial Officer of American Greetings Corporation, a global greeting card company, from November 2006 to March 2014. Previously, Mr. Smith served as Vice President of Investor Relations and Treasurer of American Greetings from April 2003 to November 2006. Prior to American Greetings, Mr. Smith served as Vice President and Treasurer of General Cable Corporation, a global wire and cable manufacturer and distributer, and Vice President, Treasurer and Assistant Secretary of Insilco Holding Company, a telecommunications and electrical component products manufacturer. During Mr. Smith’s tenure as a public company chief financial officer, he helped lead several strategic acquisitions and was responsible for the design and execution of the capital structure for a recent management buyout.
Charles B. Henry , Senior Vice President Integration and Change Management , has served as Vice President, Strategy Management and Integration of xpedx since March 2013 and is currently a member of the xpedx Senior Lead Team. Prior to that, he served as Director of the xpedx Strategy Management Office from August 2010 to March 2013. Prior to that, he served as a Director in International Paper’s Supply Chain Project Management Office. Mr. Henry joined International Paper in 1986 and served in a variety of supply chain, sales and general management roles within International Paper’s Program Management Office, Printing and Communications Papers business and Global Supply Chain operations. Mr. Henry has significant strategy and project management experience in the manufacturing and distribution industries.
Mark W. Hianik, Senior Vice President, General Counsel and Corporate Secretary, was hired by International Paper in January, 2014 to serve in this role. Previously, Mr. Hianik served as Senior Vice President, General Counsel and Chief Administrative Officer for Dex One Corporation, an advertising and marketing services company, from March 2012 to May 2013. Prior to that Mr. Hianik served as Senior Vice President, General Counsel and Corporate Secretary for Dex One (and its predecessor, R.H. Donnelley Corporation) from April 2008 to March 2012. R.H. Donnelley Corporation filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code in May 2009 emerging with a confirmed plan as Dex One in January 2010 and Dex One filed a pre-packaged bankruptcy petition under Chapter 11 in March 2013 to effect a merger consummated in April 2013. Mr. Hianik previously served as Vice President and Assistant General Counsel for Tribune Company, a diversified media company, and as a corporate and securities partner in private practice. Mr. Hianik has significant experience as a public company general counsel and leader of corporate administrative functions as well as significant mergers and acquisitions, securities, corporate finance and corporate governance experience.
Tim othy D. Kutz, Senior Vice President Supply Chain, has served as Executive Vice President, Global Strategy & Market Creation, for Unisource Worldwide, Inc. since November 2012. In this role, Mr. Kutz is responsible for Global Strategy, Information Technology, Marketing, Sustainability and Corporate Communications. Mr. Kutz joined Unisource in 2007 as Senior Vice President and Chief Information Officer. Prior to Unisource, Mr. Kutz was a partner for Accenture, a global management consulting, technology services and outsourcing company, and had worked in its Global Forest Products Practice since 1999. Previously, Mr. Kutz served as an IT director for Union Camp Corporation, a paper company acquired by International Paper. Mr. Kutz has significant information technology, supply chain, and strategy experience in the manufacturing, forest products and distribution industries.
T homas S. Lazzaro, Senior Vice President Field Sales and Operations, has served as Executive Vice President, Supply Chain of xpedx since March 2013 and is currently a member of the xpedx Senior Lead Team. In this position, Mr. Lazzaro leads the procurement, operations, inventory management, customer service, pricing and e-commerce functions for xpedx. Mr. Lazzaro joined xpedx in January 2011 as Executive Vice President and Chief Procurement Officer, responsible for all aspects of the purchasing organization. From October 2007 to May 2010, Mr. Lazzaro held several positions with HD Supply, a construction supply company, including President of White Cap Construction Supply and President of Creative Touch Interiors. Previously, Mr. Lazzaro was a senior executive with Home Depot and General Electric. Mr. Lazzaro has significant experience in general management, supply chain, operations and finance positions in the manufacturing and distribution industries.
 
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Joseph B. Myers, Senior Vice Preside nt Facility Solutions, Strategy and Commercial Excellence, was hired by International Paper in April 2014 to serve in this role. Previously, Mr. Myers served as President of Oldcastle Building Solutions, a unit of Oldcastle Inc., one of the nation’s largest building products companies, from February 2012 to April 2014. From August 2000 to February 2012, Mr. Myers was a Partner at McKinsey & Company, where he was a designated expert in sales and market growth development and led client engagements across various industries, including distribution, paper, packaging and chemicals. Previously, Mr. Myers held positions in sales, marketing and general management with BP Amoco. Mr. Myers has significant experience in senior leadership, general management, consulting, strategy and business transformation positions.
Barry R. Nelson, Senior Vice President Publishing and Print Management, has served as Group Vice President, Sales-Publishing for xpedx since December 2012. In this role, Mr. Nelson oversees and directs sales and operations for xpedx’s publishing business, Bulkley Dunton. From August 2002 to December 2012, Mr. Nelson served as Senior Vice President of Sales and Marketing for NewPage Corporation, a paper manufacturing company. NewPage filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code in September 2011 and emerged with a confirmed plan in December of 2012. Previously, Mr. Nelson served as Executive Vice President of Sales, Marketing and Client Delivery at ForestExpress, a technology joint venture of leading forest product companies. Mr. Nelson has significant sales and sales leadership experience in the paper manufacturing and distribution industries.
Elizabeth Patrick, Senior Vice President and Chief Human Resources Officer, has served as Vice President, Human Resources, of xpedx since March 2013 and is currently a member of International Paper Company’s Human Resources & Communications Lead Team and the xpedx Senior Lead Team. Prior to that, she served as Director, Human Resources-Field Operations of xpedx from October 2012 to March 2013. Prior to that, Ms. Patrick served as Vice President of Human Resources of TE Connectivity, a global electronics manufacturing and distribution company, from April 2008 to October 2012. Previously, Ms. Patrick served as Vice President Human Resources of Guilford Mills, Inc., an automotive and specialty markets fabrics manufacturer, and in a variety of roles of increased responsibility with General Motors Company and GM spin-off, Delphi Corporation, a global automotive parts manufacturer. Ms. Patrick has significant human resources and finance management and leadership experience.
Neil Russell, Senior Vice President Corporate Affairs, was hired by International Paper in February 2014 to serve in this role. Previously, Mr. Russell served as Vice President—Investor Relations of Sysco Corporation, a global business-to-business foodservice distributor, from August 2007 to February 2014. Previously, Mr. Russell served as Director of Investor Relations of Delta Air Lines. While at Delta, Mr. Russell also held positions of increasing responsibility including Director of Financial Analysis and worked in the areas of Strategic Planning and Network Analysis. Mr. Russell has significant experience as an investor relations officer for global public companies, as well as significant financial planning and public relations experience.
Darin W. Tang, Senior Vice President Packaging, has served as President of the Packaging Solutions Group for Unisource Worldwide, Inc. since January 2013. Since joining Unisource in 2004, Mr. Tang has held positions as Area Vice President of Packaging, Senior Vice President of Packaging, Senior Vice President for the East Region and National Packaging Director and President, Sales of the Industry Business Group. Prior to joining Unisource, Mr. Tang served as Director of Sales with Intertape Polymer Group, Inc., a specialty manufacturer of packaging products and systems, and in various roles in sales and training with Scott Paper Company/Kimberly Clark, a manufacturer of personal care products to the distribution and retail channels. Mr. Tang has significant sales and sales management experience in the paper and packaging manufacturing and distribution industries.
Dan iel J. Watkoske, Senior Vice President Print, has served as Executive Vice President Sales for xpedx since January 2011 and is currently a member of the xpedx Senior Lead Team. In this role, Mr. Watkoske is responsible for sales effectiveness and revenue growth for the Print, Packaging, and Facility Solutions segments. Mr. Watkoske’s additional sales channel responsibilities in his current role include xpedx’s publishing business, Bulkley Dunton, redistribution business, Saalfeld, international supply chain business, Global Solutions, and
 
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sales support businesses, which include packaging design centers, equipment sales and service. Prior to that, Mr. Watkoske served as Group Vice President for the xpedx Metro New York Group from January 2008 to January 2011. Previously, Mr. Watkoske served as Vice President National Accounts for xpedx. Mr. Watkoske joined International Paper in 1989 as a sales trainee for Nationwide Papers, which later became part of xpedx. Mr. Watkoske has significant sales, sales management and operations experience in the paper and packaging distribution industries.
Directors
The Contribution and Distribution Agreement and the Merger Agreement provide that, as of the completion of the Transactions, the board of directors of SpinCo will consist of the following directors, the majority of whom will not be employees of SpinCo or its affiliates and will satisfy the director independence requirements of the SEC and the NYSE. We have listed below biographical information for each person who is currently expected to be a member of the board of directors of SpinCo as of the completion of the Transactions in addition to Ms. Laschinger.
Allan R. Dragone, Jr. , has served as Chief Executive Officer of Unisource Worldwide Inc., a leading North American business-to-business print, packaging and facilities supply distribution company, since February 2004 after serving as President, Unisource Paper, since September 2003. Mr. Dragone started his business career with Champion International, a paper and wood products producer, in 1978 and served in various roles, including Vice President of Sales and Marketing for International and Newsprint. In 1998, Mr. Dragone left Champion to become the Chief Executive Officer of Graphic Communications, an independent paper procurement and print procurement company. Unisource later acquired Graphic in September 2003. Mr. Dragone brings to the board of directors his extensive print, packaging and facilities distribution experience and his experience running Unisource for the past 10 years.
Daniel T. Henry, served as the Chief Financial Officer of American Express Company, a global financial services company, from October 2007 until his retirement in August 2013 and as its Executive Vice President from February 25, 2007 until his August 2013 retirement. Mr. Henry served as Acting Chief Financial Officer of American Express Company from February 2007 until October 2007. While at American Express, Mr. Henry was responsible for leading the company’s finance organization and representing American Express to investors, lenders and rating agencies. Mr. Henry joined American Express in 1990 and served in a variety of senior finance roles including Comptroller. Prior to joining American Express, Mr. Henry was a Partner with Ernst & Young LLP. Mr. Henry brings to the board of directors substantial experience and expertise with respect to complex financial systems, public company financial management and reporting, and financial and strategic planning. Mr. Henry also serves as a director of Groupon, Inc.
Tracy A. Leinbach, served as Executive Vice President and Chief Financial Officer of Ryder System, Inc., a global leader in supply chain, warehousing and transportation management solutions, from March 2003 until her retirement in February 2006. Ms. Leinbach served as Executive Vice President of Ryder’s Fleet Management Solutions from March 2001 to March 2003, Senior Vice President, Sales and Marketing from September 2000 to March 2001, and she was Senior Vice President, Field Management from July 2000 to September 2000. Ms. Leinbach also served as Managing Director-Europe of Ryder Transportation Services from January 1999 to July 2000 and previously she had served Ryder Transportation Services as Senior Vice President and Chief Financial Officer from 1998 to January 1999, Senior Vice President, Business Services from 1997 to 1998, and Senior Vice President, Purchasing and Asset Management for six months during 1996. From 1985 to 1996, Ms. Leinbach held various financial positions in Ryder subsidiaries. Prior to her career with Ryder, Ms. Leinbach, a former licensed CPA, worked in public accounting for Price Waterhouse. Ms. Leinbach possesses particular knowledge, expertise and perspectives in corporate finance; operations, sales and logistics; and in strategic planning and risk management; expertise in issues regarding the management of a multinational corporation; and expertise regarding financial reporting and accounting issues for large public companies. Ms. Leinbach also serves as a director of Hasbro, Inc. and Forward Air Corporation.
 
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Seth A. Meisel , is a Managing Director of Bain Capital, LLC, a leading private alternative asset management and financial services company, where he has been employed since 1999. Prior to joining Bain Capital, from 1995-1999, Mr. Meisel was as consultant and manager at Mercer Management Consulting, a global consulting firm, in the industrial, financial services and retail industries. Mr. Meisel currently serves as a director of several Bain Capital portfolio companies and as a director of UWWH. Mr. Meisel formerly served as a director of Sensata Technologies. Mr. Meisel brings to the board of directors extensive corporate finance and investment experience as well as a significant understanding of Unisource’s business.
William E. Mitchell , is the managing partner of Sequel Capital Management, LLC, an investment management firm that he founded in 2010. Mr. Mitchell served as the chairman of the board of directors of Arrow Electronics, Inc. from May 2006 until December 2009, and also served as President and Chief Executive Officer of Arrow Electronics, Inc. from February 2003 to May 1, 2009. Prior to that, Mr. Mitchell was Executive Vice President of Solectron Global Services, Inc. from 1999 to 2003 and was Chairman, President and Chief Executive Officer of Sequel, Inc. from 1995 to 1999 until its acquisition by Solectron. Mr. Mitchell brings to the board of directors extensive experience as president and chief executive officer of a global distribution company, extensive knowledge of international business operations and significant experience in the governance of large publicly-traded corporations. Mr. Mitchell currently serves as a director of Humana, Inc., Rogers Corporation and Spansion, Inc. In addition to serving as chairman of Arrow Electronics, Inc., Mr. Mitchell previously served as a director of Brown-Forman Corporation and National Semiconductor Corporation.
Michael P. Muldowney, is the Chief Financial Officer of Gordon Brothers Group, a global advisory, restructuring and investment firm, a position he assumed in May 2014. From 2012 to May 2014, Mr. Muldowney served as Founder and Chief Executive Officer of Foxford Capital, LLC, a strategic financial advisory and investment management firm. From 2007 to 2011, Mr. Muldowney served as the Executive Vice President and Chief Financial Officer of Houghton Mifflin Harcourt Company, a global educational publishing company. From March 2011 through September 2011, Mr. Muldowney also served as Houghton Mifflin Harcourt Company’s Interim Chief Executive Officer. Houghton Mifflin Harcourt Company filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code in May 2012 and emerged with a confirmed plan in June 2012. Previously, Mr. Muldowney served in various capacities, including as Chief Operating Officer, Chief Financial Officer, President and Director, at Nextera Enterprises, Inc., a consulting firm. Early in his career, Mr. Muldowney held various management positions with Marsh & McLennan Companies, including Corporate Controller and Principal of the Mercer Management Consulting subsidiary. Mr. Muldowney, a former licensed Certified Public Accountant, brings to the board of directors a broad-based business background, significant financial expertise and leadership skills and experience leading an initial public offering.
Charles G. Ward, III, has been a partner at Perella Weinberg Partners, a global, independent advisory and asset management firm, since March 2012. From October 2010 to December 2011, Mr. Ward served as Chief Investment Officer for Arcapita Inc., a private equity firm. Arcapita filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code in March 2012 and emerged with a confirmed plan in September 2013. From 2002 to 2010 Mr. Ward was President of Lazard Ltd, a leading financial advisory and investment management firm. Prior to that, Mr. Ward served as Global Head of Investment Banking and Private Equity for Credit Suisse First Boston and as a Co-Founder and member of the board of directors of Wasserstein Perella Group, a U.S. investment bank. Mr. Ward brings to the board of directors extensive investment banking, capital markets and private equity experience.
John J. Zillmer , is the retired Executive Chairman of Univar Inc., a leading global distributor of industrial and specialty chemicals and related services, which position he held from May 2012 to December 2012. Mr. Zillmer served as President and Chief Executive Officer of Univar Inc. from October 2009 to May 2012. Prior to joining Univar Inc., Mr. Zillmer was Chairman and Chief Executive Officer of Allied Waste Industries, Inc., the nation’s second-largest waste management company, from May 2005 until December 2008, when Allied Waste Industries, Inc. merged with Republic Services, Inc. Previously, Mr. Zillmer spent 18 years at Aramark Corporation, a leading foodservice, facilities and uniforms provider, in roles of increasing responsibility, the last of which was President, Food and Support Services. Mr. Zillmer brings to the board of directors strong leadership skills, broad experience
 
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with public and private boards of directors, and extensive knowledge in the areas of strategy development and execution, operational efficiencies, management of global operations, capital investments and executive compensation. Mr. Zillmer also serves as a director of Ecolab Inc. and Reynolds American, Inc.
Board Composition and Director Independence
Effective upon completion of the Transactions, our business and affairs will be managed under the direction of our board of directors. We expect that we will have nine directors upon the completion of the Transactions. Our directors will hold office until their successors have been elected and qualified or until the earlier of their resignation or removal.
All of the directors of SpinCo, other than Mary A. Laschinger and Allan R. Dragone, Jr., are expected to be independent directors as determined in accordance with the criteria for independence required by the NYSE.
Under our amended and restated certificate of incorporation, our board of directors shall initially consist of nine directors and thereafter shall consist of such number of directors as may be determined from time to time by resolution of the board of directors. Any vacancies or newly created directorships may be filled only by the affirmative vote of a majority of our directors then in office, even if less than a quorum, or by a sole remaining director. Each director will hold office until his or her successor has been duly elected and qualified or until his or her earlier death, resignation or removal.
Upon the UWWH Stockholder and its affiliates in the aggregate ceasing to hold at least 3% of the outstanding shares of SpinCo common stock and equity securities issued in respect of such SpinCo common stock, any individual nominated by the UWWH Stockholder to the SpinCo board of directors is required to promptly tender his or her resignation to the SpinCo board of directors and will not remain a director of SpinCo, unless a majority of the SpinCo board of directors affirmatively votes not to accept such director’s resignation. Messrs. Dragone and Meisel are the UWWH Stockholder nominees to SpinCo’s board of directors.
Committees of the Board of Directors
Effective upon completion of the Transactions, our board of directors will have the following committees, each of which will operate under a written charter that will satisfy the applicable standards of the SEC and the NYSE and be posted to our website in connection with the Transactions.
Audit and Finance Committee
The Audit and Finance Committee, which we expect will consist of Messrs. Henry, Muldowney and Ward and Ms. Leinbach, will have the responsibility for, among other things, assisting the board of directors in reviewing: our financial reporting and other internal control processes; our financial statements; the independent auditors’ qualifications and independence; the performance of our internal audit function and independent auditors; our proposed and ongoing finance arrangements; and our compliance with legal and regulatory requirements and our code of business conduct and ethics.
We expect that the board of directors will determine that each of the members of the Audit and Finance Committee qualifies as an “audit committee financial expert” as that term is defined in the rules and regulations of the SEC and is “financially literate” under the NYSE rules. We expect that Mr. Henry will chair the Audit and Finance Committee.
Compensation and Leadership Development Committee
The Compensation and Leadership Development Committee, which we expect will consist of Messrs. Henry, Meisel, Muldowney and Zillmer, will have the responsibility for, among other things, reviewing and approving the compensation and benefits of our employees, directors and consultants, administering our
 
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employee benefits plans, authorizing and ratifying stock option grants and other incentive arrangements and authorizing employment and related agreements. We expect that Mr. Zillmer will chair the Compensation and Leadership Development Committee.
Nominating and Governance Committee
The Nominating and Governance Committee, which we expect will consist of Messrs. Meisel, Ward, Zillmer and Ms. Leinbach, will have the responsibility for, among other things, identifying and recommending candidates to the board of directors for election to our board of directors, reviewing the composition of the board of directors and its committees, developing and recommending to the board of directors corporate governance guidelines that are applicable to us and overseeing board of directors evaluations. We expect that Mr. Meisel will chair the Nominating and Governance Committee.
Code of Ethics for Senior Executives and Financial Officers and Code of Business Conduct and Ethics
Prior to the completion of the Transactions, our board of directors intends to adopt a Code of Ethics for Senior Executives and Financial Officers that applies to our senior executive and financial officers, including our principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions. A copy of the Code of Ethics for Senior Executives and Financial Officers, which may be a stand-alone code or incorporated into the Code of Business Conduct and Ethics described below, will be made available on our website. We will also maintain a Code of Business Conduct and Ethics that governs all of our employees. We will promptly disclose any substantive changes in or waiver of, together with reasons for any waiver of, either of these codes granted to our executive officers, including our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, and our directors by posting such information on our website.
 
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 COMPENSATION OF DIRECTORS
We have not yet paid any compensation to the individuals who will become SpinCo’s directors. We intend to establish a director compensation policy prior to the consummation of the Transactions.
It is currently expected that the non-management directors of the board of directors of SpinCo will be paid annual directors’ fees in the amount of $210,000, consisting of $85,000 in cash and $125,000 in equity or other compensation of similar value. Additional annual cash stipends will be paid to each of the committee chairs and to the lead director. The stipend amounts and form of equity awards are subject to the determination of our board of directors in establishing and approving the final director compensation policy. Following the consummation of the Transactions, we also expect to pay to each non-management director of the board of directors of SpinCo (other than Messrs. Dragone and Meisel) a portion of their annual directors’ fees as compensation for their services to SpinCo for the period prior to the consummation of the Transactions.
 EXECUTIVE COMPENSATION
SpinCo has not yet paid any compensation to the individuals who will become its executive officers, and we have not yet made any determinations with respect to the compensation of the executive officers following the Transactions, other than as described below. Information as to the historical compensation by International Paper and Unisource of certain persons who will become executive officers of SpinCo upon the completion of the Transactions is not indicative of the compensation of those executives following the completion of the Transactions. Accordingly, SpinCo has not included information regarding compensation and other benefits paid to those executives by International Paper or Unisource, as the case may be, during 2013 or prior years.
Upon completion of the Transactions, our board of directors will have a Compensation and Leadership Development Committee. In connection with the completion of the Transactions, the Compensation and Leadership Development Committee will commence to oversee and determine the compensation of the Chief Executive Officer and other executive officers of SpinCo and evaluate and determine the appropriate executive compensation philosophy and objectives for SpinCo and the process for establishing executive compensation. The Compensation and Leadership Development Committee will evaluate and determine the appropriate design of SpinCo’s executive compensation program and make any adjustment to the compensation arrangements currently contemplated and described below. If determined to be necessary or appropriate by the Compensation and Leadership Development Committee, the Compensation and Leadership Development Committee will retain a compensation consultant to provide advice and support to the committee in the design and implementation of the executive compensation program for SpinCo.
Compensation Philosophy
Our expected compensation philosophy is described below. Following the consummation of the Transactions, our Compensation and Leadership Development Committee will review and consider this philosophy and may make adjustments as it determines are necessary or appropriate. The current compensation philosophy for the combined company aims to achieve the following:
 
 	•	 	retain key leadership and talent;	
 
 	•	 	align executives with investors and the long-term vision and growth strategy of the combined company;	
 
 	•	 	ensure line-of-sight to key performance measures and results of the combined company;	
 
 	•	 	differentiate and segment workforce based on performance and individual contribution to the success of the combined company; and	
 
 	•	 	focus on challenging performance goals to creatively drive solutions and develop tools to support significant growth.	
 
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Primary Elements of Expected Compensation from SpinCo
We expect that our executive compensation program will consist of the following key elements:
Base Salary . Base salary is the fixed element of an executive officer’s annual cash compensation and is intended to attract and retain highly qualified executives and to compensate for expected day-to-day performance. Each of our executive officers will be paid base salary. Factors that we expect our Compensation and Leadership Development Committee to consider in making determinations about the base salaries for our executive officers following the completion of the Transactions include the executive officer’s position, responsibilities associated with that position, length of service, experience, expertise, knowledge and qualifications, market factors, the industry in which we operate and compete, recruitment and retention factors, the executive officer’s individual compensation history, salary levels of the other members of our executive team and similarly situated executives at comparable companies, and our overall compensation philosophy. Our Chief Executive Officer’s employment agreement provides for a specified base salary in accordance with these criteria, and the expected base salaries of our other executive officers will also be determined in accordance with these criteria. See “—Key Elements of Expected Compensation from SpinCo” below.
Annual Bonus Compensation . Our executive officers are also expected to be eligible for annual bonus compensation, which is intended to motivate the executive officers to achieve short-term company performance goals, to align executive officers’ interests with those of the stockholders and to reward the executive officers for superior individual achievements. Following the completion of the Transactions, we expect that our Compensation and Leadership Development Committee will establish an annual incentive plan and annual bonus framework for our executive officers. The respective employment arrangements of certain of our executive officers may also provide for a specified target annual bonus opportunities. See “—Key Elements of Expected Compensation from SpinCo” below.
Long-Term Equity-Based Incentive Awards . We anticipate that following the consummation of the Transactions our executive officers will be eligible to participate in our long-term equity incentive compensation programs, which will motivate executive officers to achieve long-term performance goals and to ensure goal alignment with SpinCo stockholders. The amount and timing of any long-term equity-based incentive compensation to be paid or awarded to our executive officers following the consummation of the Transactions will be determined by our Compensation and Leadership Development Committee. The respective employment arrangements of certain of our executive officers may also provide for target annual long-term incentive opportunities, although the terms, conditions and details of expected grants and awards are subject to review and approval by our Compensation and Leadership Development Committee. See “—Key Elements of Expected Compensation from SpinCo” below. Any equity incentive awards granted, paid or awarded to our executive officers following the consummation of the Transactions will generally be granted pursuant to a new equity incentive plan, the expected terms of which are described below under “—New Omnibus Equity Incentive Plan”.
With respect to base salaries, annual incentive compensation and any long-term incentive awards, it is expected that our Compensation and Leadership Development Committee will develop programs reflecting appropriate measures, goals, targets and business objectives based on SpinCo’s competitive marketplace and will make any adjustments to the proposed elements of compensation described above that it determines are necessary or appropriate in its sole discretion. Our Compensation and Leadership Development Committee will also determine the appropriate additional benefits and perquisites, if any, that it will make available to executive officers. It is expected that management of the combined company and/or the Compensation and Leadership Development Committee will retain a compensation consultant to assist in the development of the foregoing elements of compensation.
Employment Agreement with Mary A. Laschinger
In connection with the signing of the Merger Agreement, SpinCo and Mary A. Laschinger entered into an Employment Agreement governing the terms and conditions of Ms. Laschinger’s anticipated employment as the
 
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Chief Executive Officer and Chairman of the combined company following the closing of the Merger. The Employment Agreement is not effective unless and until the closing of the transactions contemplated by the Merger Agreement occurs. This summary is qualified in its entirety by reference to the full text of the Employment Agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part.
Effective as of the Closing Date, Ms. Laschinger will become the Chief Executive Officer and Chairman of SpinCo pursuant to the terms and conditions of the Employment Agreement. The initial term of the agreement is five years, which will be automatically extended for successive one-year periods following the end of the initial term. The term of the Employment Agreement, and Ms. Laschinger’s employment with SpinCo thereunder, may terminate earlier, subject to any applicable severance payments provided for in the agreement and described below. Within 30 days of the Closing Date, Ms. Laschinger will receive a $1.0 million signing bonus, which must be repaid by Ms. Laschinger in the event that she terminates her employment during the first year of the initial term for any reason other than for death, disability or for good reason (as such terms are defined in the Employment Agreement). During Ms. Laschinger’s employment, she will receive a base salary in the amount of $1.0 million per year, will qualify for an annual cash-based incentive bonus with a target based opportunity of $1.0 million a year payable upon the attainment of one or more pre-established performance metrics established by the board of directors of SpinCo or its Compensation and Leadership Development Committee and, during the initial term of the Employment Agreement, will receive equity grants under the long-term equity incentive program to be established by SpinCo having a target value of $3.5 million per year. An annual bonus of at least $1.0 million will be guaranteed for the calendar year of the Closing Date. SpinCo will also reimburse Ms. Laschinger for certain living allowances prior to her relocation to Atlanta (not to exceed $10,000 per month), certain moving expenses (not to exceed $100,000 in the aggregate), reasonable closing costs incurred in the sale of her home and certain losses incurred in the sale of her home (not to exceed $500,000, which amount will also be “grossed-up” for tax purposes). The Employment Agreement provides that SpinCo may be required to purchase her home if it does not sell within a designated 60-day period.
For each of calendar years 2014, 2015 and 2016, Ms. Laschinger will be entitled to two additional bonuses, the amount of which will vary depending upon the Closing Date. For calendar year 2014, the two bonuses are each based upon a target amount of $1.75 million but will be prorated for the portion of calendar year 2014 following the Closing Date. One of these bonuses will be payable in cash, contingent upon Ms. Laschinger’s continued employment with SpinCo through the end of the 2014, while the other bonus will be payable in cash or stock (as determined by the board of directors of SpinCo or its Compensation and Leadership Development Committee in consultation with Ms. Laschinger), contingent upon her continued employment with SpinCo through the end of 2014 and the satisfaction of certain performance conditions to be determined by the board of directors of SpinCo or its Compensation and Leadership Development Committee after consultation with Ms. Laschinger. For calendar year 2015, the two bonuses will each be based upon a target amount of $1.75 million, but reduced by an amount equal to half of the product of $1.75 million and a fraction, the numerator of which is the number of months between January 1, 2013 and the Closing Date and the denominator of which is 36. For example, if the Merger were to close exactly half-way through calendar year 2014, each of the 2015 bonuses would be reduced by one-half of the product of $1.75 million and the quotient of 18 and 36, yielding a total of $1,312,500 for each bonus after such reduction. One of these bonuses will be payable in cash, contingent upon Ms. Laschinger’s continued employment with SpinCo through the end of the 2015, while the other bonus will be payable in cash or stock (as determined by the board of directors of SpinCo or its Compensation and Leadership Development Committee in consultation with Ms. Laschinger), contingent upon her continued employment with SpinCo through the end of the 2015 and the satisfaction of certain performance conditions to be determined by the board of directors of SpinCo or its Compensation and Leadership Development Committee after consultation with Ms. Laschinger. For calendar year 2016, the two bonuses are each based upon a target amount of $1.75 million, but reduced by an amount equal to half of the product of $1.5 million and a fraction, the numerator of which is the number of months between January 1, 2014 and the Closing Date and the denominator of which is 36. For example, if the Merger were to close exactly half-way through calendar year 2014, each of the 2016 bonuses would be reduced by one-half of the product of $1.5 million and the quotient of six and 36, yielding a total of $1.625 million for each bonus after such reduction. One of these bonuses will be payable in cash, contingent upon Ms. Laschinger’s continued employment with SpinCo
 
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through the end of the 2016, while the other bonus will be payable in cash or stock (as determined by the board of directors of SpinCo or its Compensation and Leadership Development Committee in consultation with Ms. Laschinger), contingent upon her continued employment with SpinCo through the end of the 2016 and the satisfaction of certain performance conditions to be determined by the board of directors of SpinCo or its Compensation and Leadership Development Committee after consultation with Ms. Laschinger. In the event that Ms. Laschinger’s employment is terminated by SpinCo without cause or by her for good reason (as each such term is defined in the Employment Agreement), or due to her death or disability, in addition to the severance payments and benefits described below, she will be paid the applicable bonuses for the year of termination and, in the case of the performance based bonus, based upon the level at which the applicable performance goals are satisfied as of the end of the applicable performance period. Ms. Laschinger will not be entitled to be paid the additional bonus amounts for any subsequent year following the year of termination.
In the event that Ms. Laschinger’s employment is terminated by SpinCo other than for cause or she terminates her employment for good reason (as each such term is defined in the Employment Agreement) then, subject to Ms. Laschinger executing a general release of claims against SpinCo, Ms. Laschinger would be entitled to severance equal to (i) a pro-rated annual bonus for her year of termination, based upon the level at which the applicable performance goals are satisfied, (ii) an amount equal to two times the sum of her base salary and target bonus, paid over 24 months and (iii) the reimbursement of the portion of her monthly costs incurred under COBRA during the 18 month period following her termination at the same rate that SpinCo was subsidizing such healthcare costs immediately prior to termination.
Ms. Laschinger is also subject to restrictive covenants against competing with SpinCo, soliciting customers or employees of Spinco, interfering with SpinCo’s relationship with any vendors, joint venturers or licensors and disparaging SpinCo in each case for the two-year period following her termination of employment for any reason. Ms. Laschinger will also enter into agreements with respect to confidential information and the protection of intellectual property consistent with similar agreements required of other senior executives of SpinCo.
Consulting and Non-Competition Agreement with Allan R. Dragone, Jr.
In connection with the signing of the Merger Agreement, UWWH and Allan R. Dragone, Jr., the current Chief Executive Officer of UWWH, entered into a Consulting and Non-Competition Agreement governing the terms and conditions of Mr. Dragone’s anticipated role as a consultant with the combined company following the Closing Date. The Consulting and Non-Competition Agreement is not effective unless and until the closing of the Merger occurs. This summary is qualified in its entirety by reference to the Consulting and Non-Competition Agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part.
Effective as of the Closing Date, Mr. Dragone will cease to be the Chief Executive Officer of UWWH and will receive any severance benefits and obligations to which he is entitled to under his existing employment agreement with UWWH, subject to his execution and non-revocation of a general release of claims against UWWH, SpinCo and International Paper. Following the Closing Date, Mr. Dragone will become a member of the board of directors of SpinCo and will also serve in a consulting role for SpinCo as an independent contractor for a period of two years from the Closing Date. Under the Consulting and Non-Competition Agreement, Mr. Dragone will be paid a consulting fee in the annual amount of $1.0 million and have the opportunity to earn an annual bonus with a target amount of $500,000 for each one year period following the Closing Date based upon the satisfaction of certain performance metrics established by the Compensation and Leadership Development Committee of the board of directors of SpinCo prior to each year of the consulting period. Mr. Dragone will also be entitled to receive the same compensation for his services as a member of the board of directors of SpinCo as that received by SpinCo’s independent directors, as determined in accordance with the criteria for independence determined by the NYSE. If the two-year consulting term is terminated earlier by SpinCo without cause or by Mr. Dragone for good reason (as each such term is defined in the Consulting and Non-Competition Agreement), then Mr. Dragone will be entitled to continue to receive his base consulting fee through the end of the original two-year term, and will receive an additional lump sum amount equal to $1.0
 
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million reduced by any bonuses he had been paid prior to the termination of his consultancy, subject to Mr. Dragone’s execution and non-revocation of a general release of claims against SpinCo. Mr. Dragone will also be subject to restrictive covenants against competing with SpinCo, and against soliciting customers and employees of SpinCo, in each case for the two-year period following the termination of the consulting period for any reason. Mr. Dragone will also be subject to restrictive covenants with respect to confidential information and the protection of intellectual property.
Key Elements of Expected Compensation from SpinCo
Mary A. Laschinger
The key terms of the compensation and benefits to be paid or awarded by SpinCo to Ms. Mary A. Laschinger, who will serve as our Chief Executive Officer and Chairman following the completion of the Transactions, are set forth in the employment agreement between SpinCo and Ms. Laschinger. The employment agreement is described above under “—Employment Agreement with Mary A. Laschinger”.
Stephen J. Smith
On February 13, 2014, International Paper entered into an offer letter with Mr. Stephen J. Smith, who will serve as Senior Vice President and Chief Financial Officer of SpinCo following the consummation of the Transactions. It is anticipated that upon the completion of the Transactions, Mr. Smith will be employed by SpinCo on the same terms as set forth in the offer letter with International Paper, subject to any adjustment by our Compensation and Leadership Development Committee. The offer letter provides that the terms and conditions of compensation and benefit plans may be changed from time to time as necessary by SpinCo in its sole discretion and are subject to approval by our Compensation and Leadership Development Committee.
Pursuant to the offer letter, while Mr. Smith serves as Chief Financial Officer of SpinCo, he will receive a base salary at an annual rate of $550,000. He will also be entitled to receive an annual cash bonus opportunity with a target of 85% of base salary. Mr. Smith’s offer letter also provides that he will receive annual grants of SpinCo long-term equity awards covering three-year performance periods having an aggregate fair market value of $1,100,000 based on the fair market value on the grant date.
As a one-time incentive payment to induce Mr. Smith to accept employment with SpinCo, it is contemplated in the offer letter that Mr. Smith will also be eligible to participate in an additional incentive program to be developed and approved by our Compensation and Leadership Development Committee (the “Additional Incentive Program”). It is expected that the Additional Incentive Program will pay out based upon certain performance conditions, including achievement by SpinCo of certain EBITDA goals. Mr. Smith’s target payout under the Additional Incentive Payout will be $2 million, with expected minimum and maximum payouts of $1 million and $3 million, respectively. The terms of the Additional Incentive Program, including award amounts, performance goals and timing of payments will be determined and finalized by our Compensation and Leadership Development Committee in their sole discretion.
Because any long-term equity incentive awards will not pay out until 2017, the offer letter also provides that Mr. Smith will have the opportunity to earn a bonus amount with a target amount of $1,100,000 in each of calendar years 2014, 2015 and 2016, payable in cash, stock or some combination in the discretion of our Compensation and Leadership Development Committee (each, a “Bridging Award”). In each applicable year, fifty percent (50%) of the Bridging Award will be paid in cash at the end of the calendar year, and the remaining fifty percent (50%) will be paid (or not paid) in the sole discretion of our Compensation and Leadership Development Committee based on SpinCo performance metrics determined by the committee, payable in the form of cash, stock or some combination thereof. If our company performance exceeds the metrics established by the Compensation and Leadership Development Committee, the committee may, at its sole discretion, increase the amount of this portion of this award. All Bridging Award payments are contingent on Mr. Smith remaining
 
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employed with SpinCo until the payout for each calendar year or having a qualified termination by the Company, defined as an involuntary termination by the Company without cause (as defined in the offer letter) or as a result of Mr. Smith’s death or long-term disability, in each case prior to payment in that year. If Mr. Smith’s employment terminates for any reason in 2014, he will not be eligible for either the 2015 or 2016 payment, and if his employment terminates in 2015, he will not be eligible for the 2016 payment.
Additionally, Mr. Smith’s offer letter provides for certain other payment and benefits to him upon his separation from us. If Mr. Smith is severed for any reason, other than a discharge for cause (as defined in his offer letter), he will receive an amount equal to one and one-half (1.5) times (i) his annual base pay plus (ii) an amount equal to the average annual incentive plan payments under the SpinCo annual incentive plan to be established by our Compensation and Leadership Development Committee following the completion of the transactions. Payment of any severance benefits is contingent on Mr. Smith signing and not revoking a waiver and release of claims at the time of his termination.
In connection with his offer of employment by International Paper, Mr. Smith was also required to execute a separate restrictive covenant agreement, including non-competition and non-solicitation provisions, which will be assigned to SpinCo at the completion of the Transactions.
Potential Payments Upon Termination
Each of the Employment Agreement of Ms. Laschinger, the offer letter in effect between International Paper and Mr. Smith and the Consulting and Non-Competition Agreement with Mr. Dragone provide for certain payments and benefits upon a separation from us. See “—Employment Agreement with Mary A. Laschinger”, “—Key Elements of Expected Compensation from SpinCo—Stephen J. Smith” and “—Consulting and Non-Competition Agreement with Allan R. Dragone, Jr.” above for details of the payments and benefits payable upon a separation.
In addition, we expect to establish an executive severance policy following the completion of the Transactions for our executive officers (other than Ms. Laschinger), which will provide for certain payments and benefits upon a qualifying separation from employment with us. The anticipated terms of the severance policy are described below, which are subject to the adjustment and final determination by our Compensation and Leadership Development Committee.
We expect that under our severance policy, upon a termination without “cause” prior to a “change in control” (each of which will be defined in the severance policy by our Compensation and Leadership Development Committee), each executive officer (other than the CEO and CFO) will be entitled to receive, subject to the execution and non-revocation of a general release and waiver, the following payments and benefits:
 
 	•	 	an amount of severance equal to 1.5 times base salary, payable in installments;	
 
 	•	 	executive outplacement services; and	
 
 	•	 	reimbursement of monthly costs incurred under COBRA during the 18-month period following termination at the same rate that we were subsidizing healthcare costs immediately prior to termination.	
We expect that under our severance policy, upon a termination without cause within two years following a change in control, each executive officer (other than the CEO) will be entitled to receive, subject to the execution and non-revocation of a general release and waiver, the following payments and benefits:
 
 	•	 	an amount of severance equal to 2.0 times base salary, plus target bonus for the year of termination, payable in installments;	
 
 	•	 	executive outplacement services; and	
 
 	•	 	reimbursement of monthly costs incurred under COBRA during the 18-month period following termination at the same rate that we were subsidizing healthcare costs immediately prior to termination.	
 
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The decision to establish any executive severance policy and final terms of any such policy will be in the sole discretion of our Compensation and Leadership Development Committee following the completion of the Transactions and may differ from the policy described above.
The consequences of a termination of employment upon any equity awards granted to our executive officers will be determined by our Compensation and Leadership Development Committee and provided in our new omnibus incentive plan and applicable award agreements.
New Omnibus Incentive Plan
Immediately preceding the completion of the Transactions, we expect the current SpinCo board of directors to adopt the SpinCo 2014 Omnibus Incentive Plan (the “Omnibus Incentive Plan”). The Omnibus Incentive Plan will become effective on the date it is adopted by the Board of Directors. The terms of the Omnibus Incentive Plan have not yet been finalized; changes to the Omnibus Incentive Plan, some of which may be material, may be made prior to its adoption. The following description is a summary of the expected terms of the Omnibus Incentive Plan, which is qualified in its entirety by reference to the full text of the form of Omnibus Incentive Plan, which will be approved and adopted by the current SpinCo board of directors immediately preceding the completion of the Transactions.
Purpose, Eligibility and Duration
The purpose of the Omnibus Incentive Plan will be to attract and retain employees, consultants and directors who will contribute to the long-range success of our Company; to provide incentives that align the interests of our employees, consultants and directors with those of our shareholders; and to promote the success of our business. Our employees, officers and directors, along with consultants and advisers currently providing services to our Company as independent contractors, will be eligible to receive awards under the Omnibus Incentive Plan.
Unless earlier terminated by action of our board of directors, the Omnibus Incentive Plan will terminate on the tenth anniversary of the effective date of the Omnibus Incentive Plan, and no further awards may be granted under the Omnibus Incentive Plan after the end of the term.
Administration
The Omnibus Incentive Plan will be administered by our board of directors or a committee of the board of directors designated by the board to administer the plan (the “Administrator”). We expect that our Compensation and Leadership Development Committee will administer the Omnibus Incentive Plan following the completion of the Transactions. Subject to certain limitations and applicable law, the Administrator may delegate its authority under the Omnibus Incentive Plan to one or more members of the board of directors or Company officers. With respect to any award that is intended to satisfy the requirements of the Section 162(m) exception for “qualified performance-based compensation,” the Administrator will consist of two or more directors who constitute “outside directors” within the meaning of Section 162(m) of the Code, and with respect to awards to officers or directors subject to the reporting requirements of Section 16(a) of the Exchange Act, the Administrator will mean two or more “non-employee directors” within the meaning of such rule, or, in the alternative, the full board of directors.
The Administrator will select the employees, directors and other service providers who receive awards under the Omnibus Incentive Plan and determine the type of award to be granted, the number of shares subject to awards or the cash amount payable in connection with an award and the terms and conditions of these awards. Among other powers, the Administrator may, in its discretion, at any time accelerate or suspend the vesting of any award granted under the Omnibus Incentive Plan. The Administrator will have full authority to interpret the Omnibus Incentive Plan and to establish and prescribe rules for its administration.
 
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Plan Limits
We expect that an aggregate of 2,080,000 shares of SpinCo Common Stock will be authorized to be issued under the Omnibus Incentive Plan and that the plan will include additional provisions on how shares would be counted against the plan limit and when cancelled, forfeited, terminated or expired shares will be added back to the plan limit and again be made available for future grant.
The Omnibus Incentive Plan will also provide that no participant may be granted stock options or SARs with respect to more than a specified number of shares of SpinCo Common Stock in any one calendar year. For all other awards intended to qualify for the Section 162(m) exception for “qualified performance-based compensation,” the Omnibus Incentive Plan will set forth a maximum dollar amount for awards denominated in cash and a maximum share amount of SpinCo Common Stock for awards denominated in shares that may be granted to any one participant in any one calendar year.
Terms and Conditions of Awards
The Omnibus Incentive Plan will provide for the award of stock options, SARs, stock purchase rights, restricted shares, RSUs, dividend equivalents, deferred share units, performance shares, performance units and other equity-based awards.
Stock Options and Stock Appreciation Rights
The Administrator may grant awards of stock options and SARs under the Omnibus Incentive Plan. The stock options may be either “incentive stock options” (as that term is defined in Section 422 of the Code) or options that are not incentive stock options. The Administrator has the authority to determine the terms and conditions of the stock options and SARs, including the number of shares subject to each stock option and SAR, the vesting and exercise schedule of each stock option and SAR, and the exercise price of each option and strike price of each SAR (which must be at least the fair market value of the stock underlying the award on the date of grant). The terms of options and SARs will be as determined by the Administrator and reflected in the award agreements, but the term for any stock options and SARs awarded under the Omnibus Incentive Plan may not extend beyond ten years from the date of grant.
The exercise price of the options (and any applicable required withholding taxes) will be payable in any manner approved by the Administrator or provided in an applicable award agreement which may include, but is not limited to, cash, SpinCo Common Stock (valued at its fair market value on the date of exercise) or a combination thereof, or by a “cashless exercise” through a broker or by withholding shares otherwise receivable on exercise.
SARs are similar to stock options, except that no exercise price is required to be paid. Upon exercise of a SAR, the participant will receive payment equal to the increase in the fair market value of a share of common stock on the date of exercise over the strike price (which is no less than the fair market value of a share of common stock on the date of grant) times the number of shares of common stock as to which the SAR is being exercised. The payment will be made in cash, in shares of SpinCo Common Stock, or any combination thereof.
The Administrator may not reprice any stock option or SAR awarded under the Omnibus Incentive Plan without the approval of stockholders.
Restricted Shares and Restricted Share Units
The Administrator may grant awards of restricted stock and RSUs under the Omnibus Incentive Plan. The Administrator has the authority to determine the terms and conditions of the restricted stock and RSUs, including the restricted periods during which the awards are subject to forfeiture. Upon expiration of the restricted period
 
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with respect to restricted stock, the restricted stock will no longer be subject to forfeiture and, upon expiration of the restricted period with respect to each RSU, SpinCo will deliver a share of common stock, or at the Administrator’s discretion, cash or a combination of shares of common stock and cash.
Performance Awards
The Administrator may grant performance awards in the form of either performance shares or performance units. The terms and conditions of the performance awards will be determined by the Administrator, and, unless the Administrator determines otherwise, the grant, vesting and/or exercisability of performance awards will be conditioned in whole or in part on the achievement in whole or in part of performance goals during a performance period as selected by the Administrator. For awards intended to satisfy the Section 162(m) exception for “qualified performance-based compensation,” the Administrator will establish the performance goals by reference to one or more performance criteria to be set forth in the Omnibus Incentive Plan, either on a company-wide basis or, as relevant, concerning one or more affiliates, divisions, departments, regions, functions or business units.
Deferred Share Units
A deferred share unit is a unit credited to a participant’s account in our books that represents the right to receive a share of common stock or the equivalent cash value of a share of common stock upon a predetermined settlement date. Deferred share units may be granted by the Administrator independent of other awards or compensation. Unless the Administrator determines otherwise, deferred share units would be fully vested when granted.
Dividend Equivalents
The Administrator may, in its discretion, grant dividends or dividend equivalents to a participant in tandem with another award or as freestanding awards.
Other Equity-Based Awards
The Administrator may make other equity-based or equity-related awards not otherwise described by the terms of the Omnibus Incentive Plan, including grants to our non-employee directors under our director compensation program.
Termination of Employment
Except as otherwise provided for in the agreement granting the award or as otherwise determined by the Administrator, in the event a participant’s employment terminates for any reason other than “cause” (as defined in the Omnibus Incentive Plan), all unvested awards will be forfeited and all options and SARs that are vested and exercisable will remain exercisable until (i) in the case of death, disability or retirement at normal retirement age, the 180 th  day following the date of the participant’s termination of employment or (ii) until the three-month anniversary of the date of termination in the case of any other termination (or the expiration of the award’s term, whichever is earlier). In the event of a participant’s termination for cause, all unvested or unpaid awards, and all options and SARs, whether vested or unvested, will immediately be forfeited and canceled.
The Administrator will determine and specify the impact of the termination of the participant’s service on all other awards in the applicable award agreement governing the award.
Other Forfeiture Provisions
Awards will be subject to any clawback policy adopted by the Administrator, the board of directors or the Company. A participant will be required to forfeit and disgorge any awards granted or vested and all gains earned or accrued due to the exercise of stock options or SARs or the sale of any Company Common Stock to the extent
 
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required by applicable law, including Section 304 of the Sarbanes-Oxley Act of 2002 and Section 10D of the Securities Exchange Act of 1934, or pursuant to such policies as to forfeiture and recoupment as may be adopted by the Administrator and communicated to participants.
Adjustment
In the event of any stock dividend, extraordinary dividend, stock split or share combination or any recapitalization, merger, consolidation, exchange of shares, spin-off, liquidation or dissolution of the Company or other similar transaction affecting our common stock, the Administrator will adjust in its discretion, among other things, the number or amount of shares of stock, other property or cash covered by outstanding awards, the number and type of shares of stock that have been authorized for issuance under the Omnibus Incentive Plan, the other share limits under the plan, the exercise or purchase price of each outstanding award, and the other terms and conditions of outstanding awards.
Change in Control
The Omnibus Incentive Plan provides the Administrator with the flexibility to provide for new or modified awards in substitution for the then-outstanding awards. These new or modified awards must generally be as favorable to the participants as the awards they replace. In addition, if a participant’s employment were terminated following the change in control by the Company without cause or in a constructive discharge, unvested service-vesting awards would vest. The Administrators may also elect to vest and cash out some or all awards in a change in control on an accelerated basis.
Amendment and Termination
The Administrator may at any time alter, amend, suspend or terminate the Omnibus Incentive Plan, in whole or in part, except that no alteration or amendment will be effective without stockholder approval (if required by law or applicable stock exchange rules). Subject to certain exceptions, no termination or amendment may materially adversely affect the terms of any then outstanding awards without the consent of the affected participant.
 
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 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the date of this prospectus, all of our outstanding common stock is beneficially owned by International Paper. After the spin-off, International Paper will not own any of our shares of common stock. The table below sets forth the expected beneficial ownership of SpinCo common stock immediately after the completion of the Distribution and the Merger and is derived from information relating to the beneficial ownership of International Paper common stock and UWWH common stock as of May 31, 2014. The following table provides information with respect to the anticipated beneficial ownership of our common stock by the following:
 
 	•	 	each person known to beneficially own more than 5% of our common stock;	
 
 	•	 	each director;	
 
 	•	 	each of our named executive officers; and	
 
 	•	 	all directors and executive officers as a group.	
The amounts and percentages of shares beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of the determination date, which in the case of the following table is July 30, 2014. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.
Immediately following the Distribution and the Merger, there will be 16,000,000 shares of our common stock will be issued and outstanding. Unless otherwise indicated, the address for each individual listed below is c/o Veritiv Corporation, 6400 Poplar Avenue, Memphis, Tennessee 38197.

 	  	Shares Beneficially Owned After the Merger	
Name and address of beneficial owner	  	    Number    	  	    Percentage    	
UWW Holdings, LLC (1)	  	 	 	7,840,000	 	  	 	 	49	%	
Mary A. Laschinger (2)	  	 	 	3,349	 	  	 	 	* 	 	
Stephen J. Smith	  	 	 	—	 	  	 	 	—	 	
Allan R. Dragone, Jr.	  	 	 	—	 	  	 	 	—	 	
Daniel T. Henry	  	 	 	—	 	  	 	 	—	 	
Tracy A. Leinbach	  	 	 	—	 	  	 	 	—	 	
Seth A. Meisel (3)	  	 	 	7,840,000	 	  	 	 	49	%	
William E. Mitchell	  	 	 	—	 	  	 	 	—	 	
Michael P. Muldowney	  	 	 	—	 	  	 	 	—	 	
Charles G. Ward, III	  	 	 	—	 	  	 	 	—	 	
John J. Zillmer	  	 	 	—	 	  	 	 	—	 	
All executive officers and directors as a group (20 persons)	  	 	 	7,843,937	 	  	 	 	49	%	

*	Less than 1%	
(1)	Voting and dispositive power with respect to the shares of common stock held by UWW Holdings, LLC is exercised through a three-member board of managers acting by majority vote. Bain Capital Fund VII, L.P. (“Fund VII”) and Bain Capital VII Coinvestment Fund, L.P. (“Coinvestment VII”) have the right to appoint two of the three members of the board of managers of UWW Holdings, LLC. Bain Capital Investors, LLC (“BCI”) is the general partner of Bain Capital Partners VII, L.P., which is the general partner of each of Fund VII and Coinvestment VII. In addition, certain investments funds associated with Bain Capital collectively hold approximately 60% of the common equity interests of UWW Holdings, LLC (together with Fund VII and Coinvestment VII, the “Bain Capital Funds”). The governance, investment strategy and	
 
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 	decision-making process with respect to investments held by investment funds associated with Bain Capital is directed by BCI’s Global Private Equity Board (“GPEB”), which is comprised of the following individuals: Steven Barnes, Joshua Bekenstein, John Connaughton, Paul Edgerley, Stephen Pagliuca, Michel Plantevin, Dwight Poler, Jonathan Zhu and Steven Zide. By virtue of the relationships described in this footnote, GPEB may be deemed to exercise voting and dispositive power with respect to the shares held by UWW Holdings, LLC. Each of the members of the GPEB disclaims beneficial ownership of such shares to the extent attributed to such member solely by virtue of serving on GPEB. Each of BCI, the Bain Capital Funds and UWW Holdings, LLC has a business address c/o Bain Capital Partners, LLC, John Hancock Tower, 200 Clarendon Street, Boston, Massachusetts 02116.	
(2)	Includes 3,349 shares of our common stock Ms. Laschinger will receive as a result of her ownership of 178,161 shares of International Paper common stock.	
(3)	Mr. Meisel will be a director of SpinCo and is a managing director of BCI. Mr. Meisel will also be a member of the board of managers of UWW Holdings, LLC. By virtue of the relationships described in this footnote and in footnote (1), Mr. Meisel may be deemed to share beneficial ownership of the shares held by UWW Holdings, LLC. Mr. Meisel’s business address is c/o Bain Capital Partners, LLC, John Hancock Tower, 200 Clarendon Street, Boston, Massachusetts 02116.	
 
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 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies and Procedures for Related Person Transactions
In connection with the Transactions, we expect our board of directors will approve policies and procedures with respect to the review and approval of certain transactions between us and a “Related Person” (a “Related Person Transaction”), which we refer to as our “Related Person Transaction Policy.” Pursuant to the terms of the Related Person Transaction Policy we expect our board of directors to approve, any Related Person Transaction is required to be reported to the legal department, which will then determine whether it should be submitted to our audit committee for consideration. The audit committee must then review and decide whether to approve any Related Person Transaction.
For the purposes of the Related Person Transaction Policy, we expect our board of directors to approve, a “Related Person Transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we (including any of our subsidiaries) were, are or will be a participant and the amount involved exceeds $120,000, and in which any Related Person had, has or will have a direct or indirect interest.
A “Related Person,” as defined in the Related Person Transaction Policy we expect our board of directors to approve, means any person who is, or at any time since the beginning of our last fiscal year was, a director or executive officer of SpinCo or a nominee to become a director of SpinCo; any person who is known to be the beneficial owner of more than five percent of our common stock; any immediate family member of any of the foregoing persons, including any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the director, executive officer, nominee or more than five percent beneficial owner, and any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee or more than five percent beneficial owner; and any firm, corporation or other entity in which any of the foregoing persons is a general partner or, for other ownership interests, a limited partner or other owner in which such person has a beneficial ownership interest of ten percent or more.
Registration Rights
In connection with the Transactions, we will enter into the Registration Rights Agreement with the UWWH Stockholder. The registration of shares of our common stock pursuant to the exercise of registration rights would enable the UWWH Stockholder to trade these shares without restriction under the Securities Act when the applicable registration statement is deemed effective. See “The Contribution and Distribution Agreement and the Ancillary Agreements—Registration Rights Agreement.”
Indemnification Agreements
Pursuant to the terms of the Merger Agreement, we have agreed to indemnify (and maintain policies of directors’ and officers’ liability insurance for) certain parties to the Transactions, including all of our past and present directors or officers, for a period of at least six years following the closing of the Merger in respect of acts or omissions relating to the Transactions and occurring at or prior to the consummation of the Merger. In addition, in connection with the closing of the Merger, we will enter into separate indemnification agreements with each of our continuing directors. Under these indemnification agreements, we, subject to certain limitations, agreed to indemnify our directors against certain liabilities arising out of service as a director of SpinCo.
The Employment Agreement and the Consulting and Non-Competition Agreement include indemnification provisions. Under those agreements, we agree to indemnify each of these individuals against claims arising out of events or occurrences related to that individual’s service as our agent or the agent of any of our subsidiaries to the fullest extent legally permitted.
 
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Transactions with the UWWH Stockholder
For a discussion of the contracts that UWWH, the UWWH Stockholder, UWW and SpinCo have entered into or will enter into in connection with the Transactions, see “The Contribution and Distribution Agreement and the Ancillary Agreements.”
Transactions with International Paper
For a discussion of the contracts that International Paper and SpinCo have entered into or will enter into in connection with the Transactions, see “The Contribution and Distribution Agreement and the Ancillary Agreements.”
 
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 DESCRIPTION OF CAPITAL STOCK
General
Upon the completion of the Distribution, our authorized capital stock will consist of 100,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of undesignated preferred stock, par value $0.01 per share. Upon the completion of the Distribution and the Merger, there will be 16,000,000 shares of our common stock issued and outstanding.
In connection with the Transactions, we will amend and restate our certificate of incorporation and bylaws. The following descriptions of our capital stock, amended and restated certificate of incorporation and amended and restated bylaws are intended as summaries only and are qualified in their entirety by reference to our amended and restated certificate of incorporation and amended and restated bylaws which are filed as exhibits to the registration statement, of which this prospectus forms a part, and to the applicable provisions of the DGCL.
Common Stock
Holders of common stock will be entitled:
 
 	•	 	to cast one vote for each share held of record on all matters submitted to a vote of the shareholders;	
 
 	•	 	to receive, on a pro rata basis, dividends and distributions, if any, that the board of directors may declare out of legally available funds, subject to preferences that may be applicable to preferred stock, if any, then outstanding; and	
 
 	•	 	upon our liquidation, dissolution or winding up, to share equally and ratably in any assets remaining after the payment of all debt and other liabilities, subject to the prior rights, if any, of holders of any outstanding shares of preferred stock.	
Any dividends declared on the common stock will not be cumulative. Our ability to pay dividends on our common stock is subject to our subsidiaries’ ability to pay dividends to us, which is in turn subject to the restrictions set forth in the ABL Facility and the Contribution and Distribution Agreement. See “Dividend Policy.”
The holders of our common stock will not have any preemptive, cumulative voting, subscription, conversion, redemption or sinking fund rights. The common stock will not be subject to future calls or assessments by us. The rights and privileges of holders of our common stock are subject to any series of preferred stock that we may issue in the future, as described below.
Before the date of this prospectus, there has been no public market for our common stock.
As of March 31, 2014, we had 100 shares of common stock outstanding and one holder of record of common stock.
Preferred Stock
Upon completion of the Transactions, under our amended and restated certificate of incorporation, our board of directors will have the authority, without further action by our shareholders, except as described below, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the voting powers, designations, preferences and the relative participating, optional or other special rights and qualifications, limitations and restrictions of each series, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any series. Upon completion of the Transactions,
 
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no shares of our authorized preferred stock will be outstanding. Because the board of directors will have the power to establish the preferences and rights of the shares of any additional series of preferred stock, it may afford holders of any preferred stock preferences, powers and rights, including voting and dividend rights, senior to the rights of holders of the common stock, which could adversely affect the holders of the common stock and could delay, discourage or prevent a takeover of us even if a change of control of our company would be beneficial to the interests of our shareholders.
Annual Shareholders Meeting
Our amended and restated by-laws will provide that annual shareholder meetings will be held at a date, time and place, if any, as exclusively selected by our board of directors. To the extent permitted under applicable law, we may conduct meetings by remote communications, including by webcast.
Voting
The affirmative vote of a majority of the shares of our common stock present, in person or by proxy, at the meeting and entitled to vote at any annual or special meeting of shareholders will decide all matters voted on by shareholders, unless the question is one upon which, by express provision of law, under our amended and restated certificate of incorporation, or under our amended and restated bylaws, a different vote is required, in which case such provision will control.
Anti-Takeover Effects of our Certificate of Incorporation and Bylaws
The provisions of our amended and restated certificate of incorporation and amended and restated bylaws and of the DGCL summarized below may have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that you might consider in your best interest, including an attempt that might result in your receipt of a premium over the market price for your shares. These provisions are also designed, in part, to encourage persons seeking to acquire control of us to first negotiate with our board of directors, which could result in an improvement of their terms.
Special Meetings of Shareholders . Our amended and restated certificate of incorporation will provide that a special meeting of shareholders may be called only by the Chairman of our board of directors or by a resolution adopted by a majority of our board of directors. Special meetings may also be called by the holders of not less than 20% of the outstanding shares of our common stock entitled to vote generally in the election of directors.
Shareholder Action by Written Consent . Our amended and restated certificate of incorporation will provide that any action that may be taken at any meeting of shareholders may be taken by written consent of shareholders in lieu of a meeting if a consent in writing is (i) initiated by the holders of not less than 20% of the outstanding shares of our common stock entitled to vote generally in the election of directors, (ii) signed by the holders having not less than the minimum number of votes necessary to take such action at a meeting at which all shares of common stock entitled to vote were present and voted and (iii) delivered to us.
Removal of Directors. Our amended and restated certificate of incorporation and amended and restated bylaws will provide that directors may be removed with cause at any time upon the affirmative vote of holders of at least a majority of the votes to which all the shareholders would be entitled to cast and with or without cause at any special meeting of the shareholders called by the board of directors or by the Chairman of the board of directors for this purpose.
Shareholder Advance Notice Procedure . Our amended and restated by-laws will establish an advance notice procedure for shareholders to make nominations of candidates for election as directors or to bring other business before an annual meeting of our shareholders. The amended and restated by-laws will provide that any shareholders wishing to nominate persons for election as directors at, or bring other business before, an annual
 
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meeting must deliver to our secretary a written notice of the shareholder’s intention to do so. These provisions may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed. We expect that these provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company. To be timely, the shareholder’s notice must be delivered to our corporate Secretary at our principal executive offices not less than 90 days nor more than 120 days before the first anniversary date of the annual meeting for the preceding year; provided, however, that in the event that the annual meeting is set for a date that is more than 30 days before or more than 70 days after the first anniversary date of the preceding year’s annual meeting, a shareholder’s notice must be delivered to our Secretary (x) not less than 90 days nor more than 120 days prior to the meeting or (y) no later than the close of business on the 10th day following the day on which a public announcement of the date of the such meeting is first made by us.
Amendment to Certificate of Incorporation and Bylaws . Our amended and restated certificate of incorporation will provide that our amended and restated certificate of incorporation may be amended by both the affirmative vote of a majority of our board of directors or the affirmative vote of the holders of a majority of the outstanding shares of our common stock then entitled to vote at any annual or special meeting of shareholders; provided that specified provisions of our amended and restated certificate of incorporation may not be amended, altered or repealed unless the amendment is approved by the affirmative vote of the holders of at least a majority of the outstanding shares of our common stock then entitled to vote at any annual or special meeting of shareholders, including the provisions governing:
 
 	•	 	the liability and indemnification of directors;	
 
 	•	 	corporate opportunities;	
 
 	•	 	shareholder action by written consent;	
 
 	•	 	the rights of shareholders to call a special meeting;	
 
 	•	 	our board of directors;	
 
 	•	 	required approval of the holders of at least a majority of the outstanding shares of our common stock to amend our amended and restated by-laws and certain provisions of our amended and restated certificate of incorporation, and;	
 
 	•	 	exclusive jurisdiction for certain actions.	
In addition, our amended and restated certificate of incorporation and amended and restated by-laws will provide that our amended and restated by-laws may be amended, altered or repealed, or new by-laws may be adopted, by the affirmative vote of a majority of the board of directors, or by the affirmative vote of the holders of at least a majority of the outstanding shares of our common stock then entitled to vote at any annual or special meeting of shareholders.
These provisions make it more difficult for any person to remove or amend any provisions in our amended and restated certificate of incorporation and amended and restated by-laws that may have an anti-takeover effect.
Section 203 of the DGCL . In our amended and restated certificate of incorporation, we will elect not to be governed by Section 203 of the DGCL, as permitted under and pursuant to subsection (b)(3) of Section 203. Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation’s outstanding voting stock for a period of three years following the date the person became an interested shareholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested shareholder is approved in a prescribed manner. Accordingly, we will not be subject to any anti-takeover effects of Section 203.
 
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Interested Shareholder Transactions. In our amended and restated certificate of incorporation, we will provide that we will not engage in a business combination with any interested shareholder for a period of three years following the time that such shareholder became an interested shareholder unless:
 
 	•	 	prior to such time, the board of directors of SpinCo approved either the business combination or the transaction which resulted in the shareholder becoming an interested shareholder;	
 
 	•	 	upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested shareholder, those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or	
 
 	•	 	at or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least 66  2 ⁄ 3 % of the outstanding voting stock that is not owned by the interested shareholder.	
Our amended and restated certificate of incorporation defines “business combination” to include the following:
 
 	•	 	any merger or consolidation of the corporation or a majority-owned subsidiary with the interested shareholder;	
 
 	•	 	any sale, lease, exchange, mortgage, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested shareholder;	
 
 	•	 	subject to specified exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested shareholder;	
 
 	•	 	any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested shareholder; or	
 
 	•	 	any receipt by the interested shareholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.	
Our amended and restated certificate of incorporation defines an “interested shareholder” as any entity or person who, together with affiliates and associates, owns, or within the previous three years owned, 15% or more of the outstanding voting stock of the corporation. Bain Capital Fund VII, L.P., Georgia-Pacific or any of their respective affiliates or associates, including any investment funds managed by the investment advisor to Bain Capital Fund VII, L.P., or any person whose ownership of shares in excess of the 15% limitation is the result of action taken solely by SpinCo is not considered an interested shareholder, unless such person acquires additional shares of voting stock.
Limitations on Liability and Indemnification
Our amended and restated certificate of incorporation will contain provisions permitted under DGCL relating to the liability of directors. These provisions will eliminate a director’s personal liability for monetary damages resulting from a breach of fiduciary duty, except in circumstances involving:
 
 	•	 	any breach of the director’s duty of loyalty;	
 
 	•	 	acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law;	
 
 	•	 	under Section 174 of the DGCL (unlawful dividends); or	
 
 	•	 	any transaction from which the director derives an improper personal benefit.	
 
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The principal effect of the limitation on liability provision is that a shareholder will be unable to prosecute an action for monetary damages against a director unless the shareholder can demonstrate a basis for liability for which indemnification is not available under the DGCL. These provisions, however, should not limit or eliminate our rights or any shareholder’s rights to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of director’s fiduciary duty. These provisions will not alter a director’s liability under federal securities laws. The inclusion of this provision in our amended and restated certificate of incorporation may discourage or deter shareholders or management from bringing a lawsuit against directors for a breach of their fiduciary duties, even though such an action, if successful, might otherwise have benefited us and our shareholders.
Our amended and restated certificate of incorporation will require us to indemnify and advance expenses to our directors and officers to the fullest extent not prohibited by the DGCL and other applicable law, except in the case of a proceeding instituted by the director without the approval of our board of directors. Our amended and restated certificate of incorporation will provide that we are required to indemnify our directors and executive officers, to the fullest extent permitted by law, for all judgments, fines, settlements, legal fees and other expenses incurred in connection with pending or threatened legal proceedings because of the director’s or officer’s positions with us or another entity that the director or officer serves at our request, subject to various conditions, and to advance funds to our directors and officers to enable them to defend against such proceedings. To receive indemnification, the director or officer must have been successful in the legal proceeding or have acted in good faith and in what was reasonably believed to be a lawful manner in our best interest and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Prior to the completion of the Transactions, we will enter into an indemnification agreement with each of our directors. The indemnification agreement will provide our directors with contractual rights to the indemnification and expense advancement rights provided under our amended and restated by-laws, as well as contractual rights to additional indemnification as provided in the indemnification agreement.
Corporate Opportunities
Our amended and restated certificate of incorporation will provide that we, on our behalf and on behalf of our subsidiaries, renounce any interest or expectancy in, or in being offered an opportunity to participate in, corporate opportunities, that are from time to time presented to the UWWH Stockholder or Bain Capital Fund VII, L.P. or any of their respective officers, directors, agents, shareholders, members, partners, affiliates or subsidiaries (other than us and our subsidiaries), even if the opportunity is one that we or our subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so. Neither the UWWH Stockholder, Bain Capital Fund VII, L.P. nor their respective agents, shareholders, members, partners, affiliates or subsidiaries will generally be liable to us or any of our subsidiaries for breach of any fiduciary or other duty, as a director or otherwise, by reason of the fact that such person pursues or acquires such corporate opportunity, directs such corporate opportunity to another person or fails to present such corporate opportunity, or information regarding such corporate opportunity, to us or our subsidiaries unless, in the case of any such person who is a director or officer of SpinCo, such corporate opportunity is expressly offered to such director or officer in writing solely in his or her capacity as a director or officer of SpinCo. Shareholders will be deemed to have notice of and consented to this provision of our amended and restated certificate of incorporation.
Choice of Forum
Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware will be the exclusive forum for (i) any derivative action or proceeding brought on behalf of SpinCo, (ii) any action asserting a claim of breach of a fiduciary duty owed to SpinCo or SpinCo’s shareholders by any of SpinCo’s directors, officers, employees or agents, (iii) any action asserting a claim against SpinCo arising under the DGCL or (iv) any action asserting a claim against SpinCo that is governed by the internal affairs doctrine. We may consent in writing to alternative forums. By becoming a shareholder in our company, you will be deemed to have notice of and have consented to the provisions of our amended and restated certificate of incorporation related to choice of forum.
 
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Market Listing
We have applied to list our common stock on the NYSE under the symbol “VRTV.”
Transfer Agent and Registrar
Upon the completion of the Transactions, the transfer agent and registrar for our common stock will be Computershare Inc.
 
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 DESCRIPTION OF MATERIAL INDEBTEDNESS
ABL Credit Facility
On January 28, 2014, SpinCo entered into a commitment letter which was amended on February 14, 2014 and February 28, 2014, with Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, N.A., SunTrust Bank, SunTrust Robinson Humphrey, Inc., HSBC Bank USA, National Association, HSBC Bank Canada, Regions Bank, RBS Citizens Business Capital (a division of RBS Asset Finance, Inc.) and RBS Citizens, N.A., under which the banks party thereto have committed, subject to the terms and conditions set forth therein, to provide xpedx LLC and, following the Subsidiary Merger, Unisource (the “Borrower” and, together with xpedx LLC, the “U.S. Borrowers”) and Unisource Canada Inc. (the “Canadian Borrower” and, together with the U.S. Borrowers, the “Borrower Entities”) with a committed ABL Revolving Facility (the “ABL Facility”). The ABL Facility will provide for revolving loans in an aggregate principal amount of up to $1,400.0 million (subject to availability under a borrowing base). The commitment to enter into the ABL Facility will expire on January 5, 2015.
The ABL Facility will comprise four subfacilities: (a) a $1,250.0 million (minus the amount set forth in clause (b)) revolving facility to be made available to the U.S. Borrowers; (b) a first-in, last-out facility to be made available to the U.S. Borrowers in an amount to be determined (such facility, along with the facility described in clause (a), the “U.S. Facilities”); (c) a $150.0 million (minus the amount set forth in clause (d)) revolving facility to be made available to the Canadian Borrower; and (d) a first-in, last-out facility made available to the Canadian Borrower in an amount to be determined (such facility, along with the facility described in clause (c), the “Canadian Facilities”). The ABL Facility will be available to be drawn in U.S. dollars, in the case of the U.S. Facilities, and Canadian dollars, in the case of the Canadian Facilities, or in other currencies to be agreed.
Extensions of credit under the ABL Facility will be limited by a borrowing base calculated periodically based on specified percentages of the value of eligible inventory and eligible accounts receivable, subject to certain reserves and other adjustments. A portion of the ABL Facility will be available for letters of credit and swingline loans. The ABL Facility will also permit the Borrower Entities to add one or more incremental term loan facilities to be included in the ABL Facility or one or more revolving credit facility commitments to be included in the ABL Facility. Any such additional incremental facilities or increased commitments shall not exceed $400.0 million in the aggregate.
The ABL Facility will be available to finance the Transactions and to fund working capital and other general corporate purposes. The borrowing base availability under the ABL Facility is estimated to be approximately $1,251.8 as of March 31, 2014. After giving effect to letters of credit of approximately $13.8 million expected to be issued under the ABL Facility and initial borrowings under the ABL Facility of approximately $698.9 million in connection with the Transactions, assuming the Transactions had closed as of March 31, 2014, we expect to have available borrowing capacity of approximately $539.1 million under the ABL Facility as of the Closing Date.
Maturity; Prepayment
The ABL Facility will mature, and the commitments thereunder will terminate, five years after the effective date thereof. In addition, the ABL Facility will provide for the right of the individual lenders to extend the maturity date of their commitments and loans upon the request of the Borrower Entities and without the consent of any other lender.
The ABL Facility may be prepaid at the Borrower Entities’ option at any time without premium or penalty and will be subject to mandatory prepayment if the outstanding ABL Facility exceeds either the aggregate commitments with respect thereto or the current borrowing base, in an amount equal to such excess. Mandatory prepayments will not result in a permanent reduction of the lenders’ commitments under the ABL Facility.
 
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Guarantee; Security
Each of the Borrower Entities’ direct and indirect wholly-owned U.S. restricted subsidiaries, subject to certain exceptions (the “Subsidiary Guarantors”), and SpinCo (together with the Subsidiary Guarantors, the “U.S. Guarantors”) will guarantee the U.S. Borrowers’ obligations under the U.S. Facilities, and each of the Borrower Entities’ direct and indirect wholly-owned Canadian subsidiaries, subject to certain exceptions (the “Canadian Guarantors,” and together with the U.S. Guarantors, the “Guarantors”), and the U.S. Guarantors will guarantee the Canadian Borrower’s obligations under the Canadian Facilities.
The obligations under the ABL Facility and the guarantees thereof will be secured by the following:
 
 	•	 	a perfected first priority (subject to certain permitted liens) security interest in substantially all personal property of the Borrower Entities, Subsidiary Guarantors and the Canadian Guarantors consisting of accounts receivable, credit card receivables, other receivables, inventory, cash, deposit accounts, securities and commodity accounts, documents, supporting obligations, books and records related to the foregoing (but excluding, for the avoidance of doubt, intellectual property), general intangibles evidencing, governing, securing or otherwise relating to the foregoing, other property that is customarily treated as priority collateral for similar asset-based lending facilities, and proceeds (including insurance proceeds) of the foregoing, subject to certain exclusions (collectively, the “ABL Priority Collateral”) and	
 
 	•	 	a security interest in substantially all tangible and intangible assets of the Borrower Entities, Subsidiary Guarantors and the Canadian Guarantors other than ABL Priority Collateral, including pledges of the capital stock of the Borrower Entities, the Subsidiary Guarantors and the Canadian Guarantors and the capital stock of each direct, wholly-owned material restricted subsidiary owned by any of the foregoing (limited, in the case of non-U.S. and non-Canadian subsidiaries, to 65% of such capital stock), security interest in, and mortgages on equipment, general intangibles, investment property, intellectual property, material fee-owned real property, intercompany notes, and proceeds of the foregoing, subject to certain exclusions, which may be second in priority (subject to an intercreditor agreement) to the extent the Borrower Entities have incurred obligations secured by a first priority lien on such collateral.	
Interest; Fees
The interest rates applicable to the ABL Facility will be subject to a pricing grid based on average daily excess availability for the previous fiscal quarter. Customary fees will be payable in respect of the ABL Facility.
Covenants
The ABL Facility will contain negative covenants limited to the following: limitations on mergers, consolidations and sales of all or substantially all assets; limitations on dividends, prepayment of subordinated debt and other restricted payments; limitations of changes in the nature of business; limitations on the incurrence of debt and guarantees; limitations on liens; limitations on transactions with affiliates; limitations on investments and acquisitions; and limitations on negative pledge clauses. The negative covenants will be subject to customary exceptions and also will permit mergers, consolidations and sales of all or substantially all assets, dividends, prepayments of subordinated debt and other restricted payments, incurrence of unsecured indebtedness and investments and acquisitions upon satisfaction of a “payment condition.” The payment condition will be deemed satisfied upon specified availability exceeding agreed upon thresholds, the absence of specified events of default and (unless certain higher thresholds of specified availability are met) pro forma compliance with a fixed charge coverage ratio of 1.00 to 1.00 on a trailing four-quarter basis. The ABL Facility will also contain certain affirmative covenants, including financial and other reporting requirements.
The ABL Facility will not include any financial covenants, other than a springing minimum fixed charge coverage ratio of at least 1.00 to 1.00 on a trailing four-quarter basis, which will be tested only when specified
 
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availability is less than the greater of (A) $90 million and (B) 10.0% of the lesser of (x) the then applicable borrowing base and (y) the then total effective commitments under the ABL Facility, and continuing until such time as specified availability has been in excess of such threshold for a period of 20 consecutive calendar days.
Events of Default
The ABL Facility will provide for events of default limited to the following: non-payment of principal, interest or fees; violation of covenants; material inaccuracy of representations or warranties; cross default and cross acceleration to other material indebtedness; certain bankruptcy events; certain ERISA events and similar events under Canadian pension laws; material invalidity of guarantees or security interests; material judgments; and change of control.
Other Indebtedness
On a pro forma basis as of March 31, 2014, other indebtedness of the combined company of $92.7 million includes (i) $70.5 million of current and non-current Unisource capital lease obligations, exclusive of the non-monetary capital lease obligation of $171.8 million and (ii) $22.2 million of Unisource Canadian bank overdrafts. The actual amount of such indebtedness outstanding upon the closing of the Transactions may vary.
 
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 LEGAL MATTERS
The validity of the shares of SpinCo common stock to be distributed by International Paper to its shareholders in the Distribution will be passed upon for SpinCo by Debevoise & Plimpton LLP, New York, New York. Debevoise & Plimpton LLP will provide to International Paper legal opinions regarding certain U.S. federal income tax matters. Kirkland & Ellis LLP will provide to UWWH legal opinions regarding certain U.S. federal income tax matters.
 EXPERTS
The combined financial statements of the xpedx business of International Paper Company as of December 31, 2013 and December 31, 2012 and for each of the three years in the period ended December 31, 2013, included in this prospectus, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph referring to allocations of certain corporate costs from International Paper Company and an explanatory paragraph relating to the restatement discussed in Note 15). Such combined financial statements have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of UWW Holdings, Inc. as of December 31, 2013 and December 29, 2012 and for each of the three years in the period ended December 31, 2013 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.
 
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 WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to our common stock being distributed as contemplated hereby. This prospectus is part of, and does not contain all of the information set forth in, the registration statement and the exhibits thereto. Some items are omitted in accordance with the rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration statement and the exhibits filed therewith. Statements contained in this prospectus as to the contents of any contract, agreement or any other document referred to are summaries of the material terms of the respective contract, agreement or other document. With respect to each of these contracts, agreements or other documents filed as an exhibit to the registration statement, reference is made to the exhibits for a more complete description of the matter involved.
A copy of the registration statement, and the exhibits thereto, may be inspected without charge at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials may be obtained by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the SEC’s website is http://www.sec.gov.
In connection with the spin-off, we will become subject to the information and periodic reporting requirements of the Exchange Act and, accordingly, will file annual reports containing financial statements audited by an independent public accounting company, quarterly reports containing unaudited financial statements, current reports, proxy statements and other information with the SEC. You will be able to inspect and copy these reports, proxy statements and other information at the public reference facilities maintained by the SEC at the address noted above. You will also be able to obtain copies of this material from the Public Reference Room of the SEC as described above, or inspect them without charge at the SEC’s website. Upon completion of the spin-off, you will also be able to access, free of charge, our reports filed with the SEC (for example, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K and any amendments to those forms) through our website. Reports filed with or furnished to the SEC will be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Our website is included in this prospectus as an inactive textual reference only. The information found on our website is not part of this prospectus or any report filed with or furnished to the SEC.
 
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 INDEX TO FINANCIAL STATEMENTS

 	  	Page	 	
Combined Financial Statements of xpedx	  				
Audited Combined Financial Statements:	  				
Report of Independent Registered Public Accounting Firm	  	 	F-2	  	
Combined Statements of Operations and Comprehensive Income for the years ended December  31, 2013, 2012 and 2011	  	 	F-3	  	
Combined Balance Sheets as of December 31, 2013 and 2012 (Restated)	  	 	F-4	  	
Combined Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011 (Restated)	  	 	F-5	  	
Combined Statements of Changes in Parent Company Equity for the years ended December 31, 2013,  2012 and 2011 (Restated)	  	 	F-6	  	
Notes to Combined Financial Statements	  	 	F-7	  	
Unaudited Condensed Combined Financial Statements:	  				
Condensed Combined Statements of Operations and Comprehensive Income for the three months ended March 31, 2014 and 2013	  	 	F-35	  	
Condensed Combined Balance Sheets as of March 31, 2014 and December 31, 2013	  	 	F-36	  	
Condensed Combined Statements of Cash Flows for the three months ended March 31, 2014 and 2013	  	 	F-37	  	
Condensed Combined Statements of Changes in Parent Company Equity for the year ended December 31, 2013 and the three months ended March 31, 2014	  	 	F-38	  	
Notes to Condensed Combined Financial Statements	  	 	F-39	  	
		
Consolidated Financial Statements of Unisource	  				
Audited Consolidated Financial Statements:	  				
Report of Independent Auditors	  	 	F-52	  	
Consolidated Statements of Operations for the years ended December 31, 2013, December  29, 2012 and December 31, 2011	  	 	F-53	  	
Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2013, December  29, 2012 and December 31, 2011	  	 	F-54	  	
Consolidated Balance Sheets as of December 31, 2013 and December 29, 2012	  	 	F-55	  	
Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholder’s Equity (Deficit) for the years ended December 31, 2013, December 29, 2012 and December 31,
2011	  	 	F-56	  	
Consolidated Statements of Cash Flows for the years ended December 31, 2013 and December  29, 2012 and December 31, 2011	  	 	F-57	  	
Notes to Consolidated Financial Statements	  	 	F-58	  	
Unaudited Consolidated Financial Statements:	  				
Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and March 30, 2013	  	 	F-97	  	
Condensed Consolidated Statements of Comprehensive Income/(Loss) for the three months ended March 31, 2014 and March 30, 2013	  	 	F-98	  	
Condensed Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013	  	 	F-99	  	
Condensed Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ Equity for the year ended December 31, 2013 and the three months ended March 31, 2014	  	 	F-100	  	
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and March 30, 2013	  	 	F-101	  	
Notes to Condensed Consolidated Financial Statements	  	 	F-102	  	
 
F-1

Table of Contents
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
International Paper Company
We have audited the accompanying combined balance sheets of the xpedx business of International Paper Company (such business referred to as the Company) as of December 31, 2013 and 2012, and the related combined statements of operations and comprehensive income, changes in parent company equity, and cash flows for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such combined financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the combined financial statements, the Company is comprised of the assets and liabilities used in managing the xpedx business of International Paper Company. The combined financial statements include expense allocations for certain corporate functions historically provided by International Paper Company. These allocations may not be reflective of the actual expenses which would have been incurred had the Company operated as a separate entity apart from International Paper Company.
As discussed in Note 15, the accompanying combined financial statements have been restated to correct a misstatement.
/s/ Deloitte & Touche LLP
Memphis, Tennessee
April 4, 2014 (June 4, 2014 as to the effects of the restatement discussed in Note 15)
 
F-2

Table of Contents
 xpedx
(A Business of International Paper Company)
Combined Statements of Operations and Comprehensive Income

 	  	Year Ended December 31,	 	
 	  	2013	 	 	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
Net sales (including sales to a related party of $53.0, $65.1 and $60.0 for 2013, 2012 and 2011, respectively)	  	$	5,652.4	  	 	$	6,012.0	  	 	$	6,509.2	  	
Cost of products sold (including purchases from a related party of $604.4, $639.0 and $651.6 for 2013, 2012 and 2011, respectively) (exclusive of depreciation and amortization shown separately below)	  	 	4,736.8	  	 	 	5,036.7	  	 	 	5,475.3	  	
				
Distribution expenses	  	 	314.2	  	 	 	324.0	  	 	 	324.5	  	
Selling and administrative expenses	  	 	548.2	  	 	 	580.6	  	 	 	598.7	  	
Depreciation and amortization	  	 	17.1	  	 	 	14.0	  	 	 	15.6	  	
Restructuring charges	  	 	37.9	  	 	 	35.1	  	 	 	43.6	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Operating (loss) income	  	 	(1.8	) 	 	 	21.6	  	 	 	51.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Other income, net	  	 	(2.2	) 	 	 	(1.9	) 	 	 	(5.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations before income taxes	  	 	0.4	  	 	 	23.5	  	 	 	56.7	  	
Income tax provision	  	 	0.4	  	 	 	9.1	  	 	 	21.2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	  	 	0.0	  	 	 	14.4	  	 	 	35.5	  	
Income (loss) from discontinued operations, net of income taxes	  	 	0.2	  	 	 	(10.0	) 	 	 	(13.6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net income	  	 	0.2	  	 	 	4.4	  	 	 	21.9	  	
				
Other comprehensive income, net of tax:	  				 				 				
Change in cumulative foreign currency translation adjustment	  	 	1.4	  	 	 	1.8	  	 	 	(4.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income, net of tax	  	$	1.6	  	 	$	6.2	  	 	$	17.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these combined financial statements.
 
F-3

Table of Contents
 xpedx
(A Business of International Paper Company)
Combined Balance Sheets

 	  	December 31,	 	
 	  	2013	 	 	2012	 	
 	  	(Dollars in millions)
(as restated, see Note 15)	 	
Assets	  				 				
Current assets:	  				 				
Cash and cash equivalents	  	$	5.7	  	 	$	15.4	  	
Accounts receivable, less allowances of $22.7 and $25.3 in 2013 and 2012, respectively	  	 	669.7	  	 	 	680.6	  	
Related-party receivable	  	 	10.1	  	 	 	6.6	  	
Inventories, net	  	 	360.9	  	 	 	373.4	  	
Other current assets	  	 	26.3	  	 	 	29.5	  	
Assets held for sale	  	 	9.3	  	 	 	7.5	  	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	1,082.0	  	 	 	1,113.0	  	
			
Property and equipment, net	  	 	107.1	  	 	 	132.0	  	
Other non-current assets	  	 	9.4	  	 	 	1.5	  	
Goodwill	  	 	26.4	  	 	 	26.4	  	
Other intangibles, net	  	 	9.3	  	 	 	10.8	  	
Deferred income tax assets	  	 	22.7	  	 	 	24.2	  	
	  	 	 	 	 	 	 	 	
Total assets	  	$	1,256.9	  	 	$	1,307.9	  	
	  	 	 	 	 	 	 	 	
Liabilities and parent company equity	  				 				
Current liabilities:	  				 				
Accounts payable	  	$	357.3	  	 	$	356.8	  	
Related-party note payable	  	 	—  	  	 	 	20.3	  	
Related-party payable	  	 	2.6	  	 	 	2.1	  	
Accrued payroll and benefits	  	 	54.9	  	 	 	55.4	  	
Deferred income tax liabilities	  	 	13.5	  	 	 	11.1	  	
Other accrued liabilities	  	 	36.5	  	 	 	32.2	  	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	464.8	  	 	 	477.9	  	
			
Non-current liabilities	  	 	12.5	  	 	 	16.9	  	
	  	 	 	 	 	 	 	 	
Total liabilities	  	 	477.3	  	 	 	494.8	  	
			
Commitments and contingent liabilities (Note 8)	  				 				
			
Parent company equity:	  				 				
Parent company investment	  	 	784.3	  	 	 	819.2	  	
Accumulated other comprehensive loss	  	 	(4.7	) 	 	 	(6.1	) 	
	  	 	 	 	 	 	 	 	
Total parent company equity	  	 	779.6	  	 	 	813.1	  	
	  	 	 	 	 	 	 	 	
Total liabilities and parent company equity	  	$	1,256.9	  	 	$	1,307.9	  	
	  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these combined financial statements.
 
F-4

Table of Contents
 xpedx
(A Business of International Paper Company)
Combined Statements of Cash Flows

 	  	Year Ended December 31,	 	
 	  	2013	 	 	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
 	  	(as restated, see Note 15)	 	
Operating activities	  				 				
Net income	  	$	0.2	  	 	$	4.4	  	 	$	21.9	  	
Income (loss) from discontinued operations, net of income taxes	  	 	0.2	  	 	 	(10.0	) 	 	 	(13.6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations	  	 	—  	  	 	 	14.4	  	 	 	35.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	  	 	17.4	  	 	 	15.2	  	 	 	16.1	  	
Net (gains) losses on sales of fixed assets	  	 	(6.4	) 	 	 	(2.3	) 	 	 	0.6	  	
Loss on impairment of trade name	  	 	—  	  	 	 	—  	  	 	 	6.7	  	
Adjustment to allowance for doubtful accounts	  	 	6.4	  	 	 	7.5	  	 	 	8.2	  	
Deferred income tax provision	  	 	3.3	  	 	 	1.4	  	 	 	9.5	  	
Stock-based compensation	  	 	15.4	  	 	 	13.1	  	 	 	10.1	  	
Changes in assets and liabilities:	  				 				
Accounts receivable	  	 	(1.3	) 	 	 	27.8	  	 	 	53.9	  	
Inventories, net	  	 	12.3	  	 	 	12.3	  	 	 	43.3	  	
Accounts payable and accrued liabilities	  	 	10.8	  	 	 	(38.0	) 	 	 	(87.8	) 	
Other	  	 	(4.9	) 	 	 	7.2	  	 	 	5.4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash provided by operating activities – continuing operations	  	 	53.0	  	 	 	58.6	  	 	 	101.5	  	
Cash provided by (used for) provided by operating activities – discontinued operations	  	 	(0.8	) 	 	 	(2.6	) 	 	 	6.2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash provided by operating activities	  	 	52.2	  	 	 	56.0	  	 	 	107.7	  	
			
Investing activities	  				 				
Invested in capital projects	  	 	(9.8	) 	 	 	(13.3	) 	 	 	(17.4	) 	
Proceeds from asset sales	  	 	22.7	  	 	 	5.1	  	 	 	0.1	  	
Other	  	 	0.3	  	 	 	0.5	  	 	 	0.4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash provided by (used for) investing activities – continuing operations	  	 	13.2	  	 	 	(7.7	) 	 	 	(16.9	) 	
Cash provided by (used for) investing activities – discontinued operations	  	 	—  	  	 	 	0.2	  	 	 	(0.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash provided by (used for) investing activities	  	 	13.2	  	 	 	(7.5	) 	 	 	(17.1	) 	
			
Financing activities	  				 				
Net transfers to parent	  	 	(70.8	) 	 	 	(48.9	) 	 	 	(92.5	) 	
Change in book overdrafts	  	 	(5.8	) 	 	 	1.7	  	 	 	1.3	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash used for financing activities – continuing operations	  	 	(76.6	) 	 	 	(47.2	) 	 	 	(91.2	) 	
Cash (used for) provided by financing activities – discontinued operations	  	 	—  	  	 	 	0.9	  	 	 	(0.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash used for financing activities	  	 	(76.6	) 	 	 	(46.3	) 	 	 	(91.5	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash	  	 	1.5	  	 	 	(1.5	) 	 	 	0.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Change in cash and cash equivalents	  	 	(9.7	) 	 	 	0.7	  	 	 	(0.2	) 	
Cash and cash equivalents at beginning of period	  	 	15.4	  	 	 	14.7	  	 	 	14.9	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at end of period	  	$	5.7	  	 	$	15.4	  	 	$	14.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Supplementary cash flow information	  				 				
Income taxes paid, net of refunds	  	$	0.7	  	 	$	1.1	  	 	$	0.9	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Non-Cash Transactions:	  				 				 				
Property additions included in accounts payable	  	$	0.7	  	 	$	1.2	  	 	$	0.1	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Conveyance of related-party note payable	  	$	20.3	  	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these combined financial statements.
 
F-5

Table of Contents
 xpedx
(A Business of International Paper Company)
Combined Statements of Changes in Parent Company Equity

 	  	Parent
Company
Investment	 	 	Accumulated
Other
Comprehensive
Income (Loss)	 	 	Total
Parent
Company
Equity	 	
 	  	(Dollars in millions)	 	
 	  	(as restated, see Note 15)	 	
Balance, January 1, 2011	  	$	913.2	  	 	$	(3.7	) 	 	$	909.5	  	
Net income	  	 	21.9	  	 	 	—  	  	 	 	21.9	  	
Other comprehensive loss, net of tax	  	 	—  	  	 	 	(4.2	) 	 	 	(4.2	) 	
Net transfers to parent	  	 	(84.9	) 	 	 	—  	  	 	 	(84.9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance, December 31, 2011	  	 	850.2	  	 	 	(7.9	) 	 	 	842.3	  	
Net income	  	 	4.4	  	 	 	—  	  	 	 	4.4	  	
Other comprehensive income, net of tax	  	 	—  	  	 	 	1.8	  	 	 	1.8	  	
Net transfers to parent	  	 	(35.4	) 	 	 	—  	  	 	 	(35.4	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance, December 31, 2012	  	 	819.2	  	 	 	(6.1	) 	 	 	813.1	  	
Net income	  	 	0.2	  	 	 	—  	  	 	 	0.2	  	
Other comprehensive income, net of tax	  	 	—  	  	 	 	1.4	  	 	 	1.4	  	
Net transfers to parent	  	 	(35.1	) 	 	 	—  	  	 	 	(35.1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance, December 31, 2013	  	$	784.3	  	 	$	(4.7	) 	 	$	779.6	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these combined financial statements.
 
F-6

Table of Contents
 xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements
1. Summary of Business and Significant Accounting Policies
Nature of Operations
xpedx is a business-to-business distributor of paper, packaging and facility supplies products in North America operating 86 distribution centers in the U.S. and Mexico as of December 31, 2013. xpedx distributes products and services to a number of customer markets including: printers, publishers, data centers, manufacturers, higher education institutions, healthcare facilities, sporting and performance arenas, retail, government agencies, property managers and building service contractors.
Basis of Combination
These combined financial statements reflect the historical financial position, results of operations, changes in parent company equity and cash flows of the Company for the periods presented as the Company was historically managed within International Paper Company (International Paper or Parent). The combined financial statements have been prepared on a “carve-out” basis and are derived from the consolidated financial statements and accounting records of International Paper. The combined financial statements have been prepared in United States (U.S.) dollars and in accordance with generally accepted accounting principles in the U.S. (GAAP). The Company’s combined financial statements may not be indicative of the Company’s future performance and do not necessarily reflect what the results of operations, financial position and cash flows would have been had it operated as an independent company during the periods presented.
The combined financial statements include expense allocations for certain functions provided by International Paper, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, insurance and stock-based compensation. These expenses have been allocated to the Company on the basis of direct usage when identifiable, with the remainder principally allocated on the basis of percent of capital employed, headcount or other measures. During the years ended December 31, 2013, 2012 and 2011, the Company was allocated $84.0 million, $78.4 million and $84.8 million, respectively, of general corporate expenses incurred by International Paper which are included within selling and administrative expenses in the combined statements of operations and comprehensive income. Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization of services provided to or the benefit received by the Company during the periods presented. The allocations may not, however, reflect the expenses the Company would have incurred as an independent company for the periods presented. Actual costs that may have been incurred if the Company had been a stand-alone company would depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. The Company is unable to determine what such costs would have been had the Company been independent. Following the separation, the Company will perform these functions using its own resources or purchased services. For an interim period, however, some of these functions will continue to be provided by International Paper under transition services agreements. In addition to the transition services agreements, we will enter into a number of commercial agreements with International Paper in connection with the separation.
Intercompany transactions between the Company and International Paper have been included in these combined financial statements and are primarily considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded. For those intercompany transactions historically settled in cash between the Company and International Paper, the Company has separately disclosed those balances in the balance sheet as of December 31, 2013 and 2012 as related party receivables and payables. The total net effect of the settlement of these intercompany transactions, exclusive of those historically settled in cash, is reflected in the combined statements of cash flows as a financing activity and in the combined balance sheets as parent company investment.
 
F-7

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
1. Summary of Business and Significant Accounting Policies  (continued)
 
International Paper’s debt and the related interest expense have not been allocated to the Company for any of the periods presented because the Company is not the legal obligor of the debt and International Paper’s borrowings were not directly attributable to the Company’s business.
International Paper maintains self-insurance programs at the corporate level. The Company was allocated a portion of the expenses associated with these programs as part of the general corporate overhead expense allocation. No self-insurance reserves have been allocated to the Company as the self-insurance reserves represent obligations of International Paper, which are not transferrable.
International Paper uses a centralized approach to cash management and financing its operations. Transactions between International Paper and the Company are accounted for through parent company investment. Accordingly, none of the cash, cash equivalents, debt or related interest expense at the Parent level has been assigned to the Company in the combined financial statements. Cash and cash equivalents in the combined balance sheets represents cash and cash equivalents held locally by certain of the Company’s entities.
The Company ceased certain of its operations, and where appropriate, these operations have been reflected as discontinued operations in the combined financial statements. See Note 4 for further discussion.
The Company operates on a calendar year-end.
Subsequent to the issuance of the Company’s consolidated financial statements as of and for the year ended December 31, 2012, the Company’s management identified the following errors:
Company management determined that a last in, first out (LIFO) reserve relating to a prior business combination of IP was incorrectly allocated to xpedx. As a result, the xpedx LIFO reserve is overstated by approximately $27.5 million in the previously issued financial statements. The prior period financial information has been revised to reflect this adjustment. As of December 31, 2012, this correction resulted in an increase in inventory of $27.5 million, an increase to current deferred tax assets of $10.8 million, and an increase to parent company investment of $38.3 million. The correction had no impact on previously reported amounts of net income.
Assets with a net book value of approximately $17.3 million should have been recognized in the Company’s historical combined financial statements. The prior period financial information has been revised to include these assets in the Company’s property balances. As of December 31, 2012, this correction resulted in an increase to property of $17.3 million, a decrease to long term deferred tax assets of $6.9 million, and an increase to parent company investment of $10.4 million. The impact of this correction on net income was immaterial.
The cumulative effect on these adjustments on Parent Company Investment on January 1, 2011 was an increase of $48.7 million.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Estimates are revised as additional information becomes available. Estimates and assumptions
 
F-8

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
1. Summary of Business and Significant Accounting Policies  (continued)
 
are used for, but not limited to income tax contingency accruals and valuation allowances, impairment of goodwill and other intangibles. Actual results could differ from these estimates.
Revenue Recognition
Revenue is recognized when persuasive evidence of an arrangement exists, the price is fixed or determinable, collectability is reasonably assured and delivery has occurred. Revenue is recognized when the customer takes title and assumes the risks and rewards of ownership. Revenue is recorded at the time of shipment for customer terms designated f.o.b. (free on board) shipping point. For sales transactions with customers designated f.o.b. destination, revenue is recorded when the product is delivered to the customer’s delivery site, when title and risk of loss are transferred. Shipping terms are determined on a customer by customer or order by order basis.
Certain revenues are derived from shipments arranged by xpedx made directly from a manufacturer to an xpedx customer. xpedx is considered to be a principal to these transactions because, among other factors, xpedx controls pricing to the customer and bears the credit risk of the customer defaulting on payment and is the primary obligor. Revenues from these sales are reported on a gross basis in the combined statements of operations and comprehensive income and amounted to $2.4 billion, $2.5 billion and $2.8 billion for the years ended December 31, 2013, 2012 and 2011, respectively.
Taxes collected from customers relating to product sales and remitted to governmental authorities are accounted for on a net basis. Accordingly, such taxes are excluded from both net sales and expenses.
Purchase Incentives and Customer Rebates
xpedx enters into agreements with suppliers that entitle xpedx to receive rebates, allowances and other discounts based on the attainment of specified purchasing levels or sales to certain customers. Other current assets in the combined balance sheets included $18.4 million and $22.3 million as of December 31, 2013 and 2012, respectively, of anticipated amounts not yet received. Purchase incentives are recorded as a reduction in inventory and recognized into cost of products sold as the product is sold.
xpedx enters into incentive agreements with its customers, which are generally based on sales to these customers. xpedx records its customers’ estimated attainment of discounts and rebates as a reduction of sales. Other accrued liabilities in the combined balance sheets included $12.8 million and $12.3 million as of December 31, 2013 and 2012, respectively, of anticipated amounts not yet paid.
Distribution Expense
Distribution expense consists of storage, handling and delivery costs including freight to our customers’ destination as shown in the combined statements of operations and comprehensive income. Handling and delivery costs in the combined statement of operations and comprehensive income amounted to $252.9 million, $259.7 million and $258.7 million for the years ended December 31, 2013, 2012 and 2011, respectively.
Advertising Costs
Advertising costs are expensed as incurred and primarily represent purchases of advertising space within newspapers, trade publications and websites. Such costs were approximately $0.7 million, $0.6 million and $0.9 million for the years ended December 31, 2013, 2012 and 2011, respectively, and are recorded in selling and administrative expenses.
 
F-9

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
1. Summary of Business and Significant Accounting Policies  (continued)
 
Annual Maintenance Costs
Costs for repair and maintenance activities are expensed in the month that the related activity is performed under the direct expense method of accounting.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits on-demand and other highly liquid investments with maturities of three months or less. Cash balances may exceed government insured limits in certain jurisdictions.
Outstanding checks of $33.2 million and $39.1 million as of December 31, 2013 and 2012, respectively, represent checks issued that have not been presented for payment to the banks and are classified in accounts payable in the combined balance sheets.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivables are recognized net of an allowance for doubtful accounts. The allowance for doubtful accounts reflects the best estimate of losses inherent in the Company’s accounts receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other available evidence. The allowance is inclusive of credit risks, returns, discounts and any other items affecting the realization of these assets. Accounts receivable are written off when management determines they are uncollectible.

 	  	2013	 	 	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
Beginning balance	  	$	25.3	  	 	$	26.2	  	 	$	29.1	  	
Adjustment to reserve	  	 	6.4	  	 	 	8.7	  	 	 	8.6	  	
Write-offs	  	 	(9.0	) 	 	 	(9.6	) 	 	 	(11.5	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Ending balance	  	$	22.7	  	 	$	25.3	  	 	$	26.2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Inventories, Net
Inventories are primarily valued at cost as determined by the LIFO method. Such valuations are not in excess of market. Elements of cost in inventories include the purchase price invoiced by a supplier, plus inbound freight and related costs and reduced by estimated volume-based discounts available from certain suppliers.
Property and Equipment, Net
Property and equipment are stated at cost, less accumulated depreciation and consist principally of land, buildings, leasehold improvements, machinery, equipment and internal-use software. Expenditures for betterments are capitalized, whereas normal repairs and maintenance are expensed as incurred. Depreciation for property and equipment, other than land and construction in progress, is based upon the following estimated useful lives, using the straight-line method:

Buildings	  	 	40 years	  	
Leasehold improvements	  	 	1 to 10 years	  	
Machinery and equipment	  	 	3 to 10 years	  	
Internal-use software	  	 	1 to 5 years	  	
 
F-10

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
1. Summary of Business and Significant Accounting Policies  (continued)
 
The Company capitalizes certain computer software and development costs incurred in connection with developing or obtaining software for internal use. Costs related to the development of internal-use software, other than those incurred during the application development stage, are expensed as incurred.
Upon retirement or other disposal of property and equipment, the cost and related amount of accumulated depreciation are eliminated from the asset and accumulated depreciation accounts, respectively. The difference, if any, between the net asset value and the proceeds is included in net income.
The Company assesses the recoverability of assets using undiscounted cash flows whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. If an asset is found to be impaired, the amount recognized for impairment is equal to the difference between the carrying value of the asset and the present value of future cash flows or other reasonable estimate of fair value.
Depreciation includes amortization of leasehold improvements. The amortization of leasehold improvements is recorded over the shorter of the remaining lease term or the economic lives of the leased assets.
Goodwill and Other Intangibles, Net
Goodwill relating to a single business reporting unit is included as an asset of the applicable segment. Goodwill arising from major acquisitions that involve multiple reportable segments is allocated to the reporting units that are expected to benefit from the synergies of the business combinations generating the underlying goodwill.
During the quarter ended December 31, 2013, the Company voluntarily changed the date of its annual goodwill and indefinite-lived intangible asset impairment test from the last day of the fourth quarter (December 31) to the first day of the fourth quarter (October 1). This change is preferable under the circumstances as it (i) results in better alignment with the Company’s annual strategic planning and forecasting process and (ii) provides the Company with additional time in a given fiscal reporting period to accurately assess the recoverability of goodwill and indefinite-lived intangible assets and to measure any indicated impairment. The Company believes that the change in accounting principle related to the annual testing date will not delay, accelerate, or avoid an impairment charge. In accordance with Accounting Standards Codification (ASC) 350, Intangibles – Goodwill and other , if indicators of impairment are deemed to be present and management believes that it is more likely than not events or circumstances have occurred that would result in the impairment of a reporting unit’s goodwill, the Company would perform an interim impairment test and any resulting impairment loss would be charged to expense in the period identified. This change is not applied retrospectively as it is impracticable to do so because retrospective application would require the application of significant estimates and assumptions with the use of hindsight. Accordingly, the change will be applied prospectively.
In performing this impairment testing, the Company estimates the fair value of its reporting units using the projected future cash flows to be generated by each unit over the estimated remaining useful operating lives of the unit’s assets, discounted using the estimated cost of capital for each reporting unit. These estimated fair values are then analyzed for reasonableness by comparing them to historic market transactions for businesses in the industry. For reporting units whose recorded value of net assets plus goodwill is in excess of their estimated fair values, the fair values of the individual assets and liabilities of the respective reporting units are then determined to calculate the amount of any goodwill impairment charge required. See Note 6 for further discussion.
 
F-11

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
1. Summary of Business and Significant Accounting Policies  (continued)
 
Intangible assets acquired in a business combination are recorded at fair value. Intangible assets with finite useful lives are subsequently amortized using the straight-line method over the following estimated useful lives of the assets:

Customer lists	  	 	13–24 years	  	
Trade names	  	 	15–17 years	  	
Non-compete covenants	  	 	5 years	  	
The Company assesses the remaining useful life and the recoverability of finite-lived intangible assets whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. The Company reviews indefinite intangible assets for impairment by comparing the fair value of the assets, estimated using an income approach, with their carrying value. If the carrying value exceeds the fair value of the intangible asset, the amount recognized for impairment is equal to the difference between the carrying value of the asset and the present value of future cash flows.
Impairment of Long-Lived Assets
Long-lived assets, including other intangible assets with finite lives, are reviewed for impairment upon the occurrence of events or changes in circumstances that indicate that the carrying value of the assets may not be recoverable, measured by comparing their net book value to the undiscounted projected future cash flows generated by their use. Impaired assets are recorded at their estimated fair value. See Note 6 for further discussion.
Employee Benefits
Certain of the Company’s employees participate in defined benefit pension and other post-employment benefit plans (the Plans) sponsored by International Paper and accounted for by International Paper in accordance with accounting guidance for defined benefit pension and other post-employment benefit plans.
For the employees who participate in the Plans not sponsored by International Paper, the Company recognizes a liability only for any required contributions to the Plans that are accrued and unpaid at the balance sheet date, in accordance with generally accepted accounting principles for multiemployer benefit plans. The Company does not record an asset or liability to recognize the funded status of the Plans. The Company also contributes to multiemployer pension plans for certain collective bargaining U.S. employees that are not sponsored by International Paper. All pension and other postretirement expenses related to xpedx employees are reported within both cost of products sold and selling and administrative expenses in the combined statements of operations and comprehensive income.
Stock-Based Compensation
Compensation costs resulting from all stock-based compensation transactions are measured and recorded in the combined financial statements based on the grant-date fair value of the equity instruments issued. Compensation cost is recognized over the period that an employee provides service in exchange for the award.
Income Taxes
Historically, the Company was included in the foreign and domestic tax filings with other International Paper entities. The income tax provisions in these financial statements have been prepared on a separate return basis as if the Company was a stand-alone entity. The results from being included in the combined tax returns are included in Parent company investment. International Paper’s global tax structure and model has been developed
 
F-12

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
1. Summary of Business and Significant Accounting Policies  (continued)
 
based on its entire portfolio of businesses. Accordingly, the Company’s tax results as presented may not be reflective of the results that the Company will generate in the future or would have generated on a stand-alone basis. Further, for jurisdictions where the Company filed returns as part of International Paper, the stand alone provision will present taxes payable as a component of equity since the Company will never actually be liable for the payable. The Company will record a payable balance, if necessary, for foreign jurisdictions where the Company has a legal obligation to file and pay income tax.
With the exception of certain non-U.S. entities, the Company does not maintain taxes payable to or from International Paper and the Company is deemed to settle the annual current tax balances immediately with the legal tax-paying entities in the respective jurisdictions. These settlements are reflected as changes in parent company investment.
xpedx uses the asset and liability method of accounting for income taxes whereby deferred income taxes are recorded for the future tax consequences attributable to differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are remeasured to reflect new tax rates in the periods rate changes are enacted.
xpedx records its tax provision based on the respective tax rules and regulations for the jurisdictions in which it operates. Where the Company believes that a tax position is supportable for income tax purposes, the item is included in its income tax returns. Where treatment of a position is uncertain, liabilities are recorded based upon the Company’s evaluation of the “more likely than not” outcome considering the technical merits of the position based on specific tax regulations and the facts of each matter. Changes to recorded liabilities are made only when new information becomes available that changes the likely outcome, such as settlement with the relevant tax authority, the expiration of statutes of limitation for the subject tax year, a change in tax laws, or a recent court case that addresses the matter.
Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of cash, trade accounts receivable, accounts payable and other components of other current assets and other current liabilities, in which the carrying amount approximates fair value due to the short maturity of these items.
Intangible assets acquired in a business combination are recorded at fair value and the Company reviews indefinite intangible assets for impairment by comparing the fair value of the assets, estimated using an income approach, with their carrying value. Additionally when performing annual goodwill impairment testing, the Company estimates the fair value of its reporting units using the projected future cash flows to be generated by each unit over the estimated remaining useful operating lives of the unit’s assets, discounted using the estimated cost of capital for each reporting unit.
The guidance for fair value measurements and disclosures sets out a fair value hierarchy that groups fair value measurement inputs into the following three classifications:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability reflecting the reporting entity’s own assumptions or external inputs from inactive markets.
 
F-13

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
1. Summary of Business and Significant Accounting Policies  (continued)
 
In valuing intangible assets acquired in a business combination as well as in performing annual and interim, if applicable, intangible asset impairment testing the Company utilizes a combination of Level 1, 2 and 3 inputs.
Translation of Financial Statements
Balance sheets of international operations are translated into U.S. dollars at year-end exchange rates, while statements of operations are translated at average rates. Adjustments resulting from financial statement translations are included as cumulative translation adjustments in accumulated other comprehensive income.
Parent Company Investment
Parent company investment in the combined balance sheets represents International Paper’s historical investment in the Company, the Company’s accumulated net earnings after income taxes and the net effect of transactions with and allocations from International Paper.
2. Recent Accounting Developments
Income Taxes
In July 2013, the FASB issued ASU 2013-11, Income Taxes , which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance should be applied to all unrealized tax benefits that exist as of the effective date which is fiscal years beginning after December 15, 2013 and interim periods within those years. The Company is currently evaluating the provisions of this guidance.
Multiemployer Pension Plans
In September 2011, the FASB issued ASU 2011-09, Compensation – Retirement Benefits – Multiemployer Plans , related to the disclosure requirements for an employer’s participation in a multiemployer pension plan, resulting in more detailed disclosure information. The updated guidance is effective for fiscal years ending on or after December 15, 2012; however, early adoption is permitted for both public and nonpublic entities. The application of the requirements of this guidance did not have a material effect on the combined financial statements. See Note 9 for further discussion of the Company’s participation in multiemployer plans.
3. Restructuring Charges
During 2010, the Company completed a strategic assessment of its operating model, resulting in the decision to begin on a multi-year restructuring plan. The restructuring plan involved the establishment of a lower cost operating model in connection with the repositioning of the Print segment in consideration of changing market considerations. The restructuring plan included initiatives to: (i) optimize the warehouse network, (ii) improve the efficiency of the sales team and (iii) reorganize the procurement function. Management launched the plan in 2011.
The restructuring plan identified locations to be affected and a range of time for specific undertakings. A severance liability was established when positions to be eliminated were identified. Generally severance arrangements were based on years of employee service.
 
F-14

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
3. Restructuring Charges  (continued)
 
2013
During 2013, six retail and warehouse locations were closed as part of the identified restructuring plan. The closures occurred throughout 2013 with a majority of the activity in the first and second quarters. The Company recorded total restructuring charges of $37.9 million before taxes ($ 23.0 million after taxes). These charges included:

 	  	Before-Tax
Charges	 	 	After-Tax
Charges	 	
 	  	(Dollars in millions)	 	
Facility costs	  	$	15.2	  	 	$	9.3	  	
Severance	  	 	16.9	  	 	 	10.3	  	
Personnel costs	  	 	10.9	  	 	 	6.6	  	
Accelerated amortization and depreciation	  	 	0.3	  	 	 	0.1	  	
Professional services	  	 	1.0	  	 	 	0.6	  	
Gain on sale of fixed assets	  	 	(6.4	) 	 	 	(3.9	) 	
	  	 	 	 	 	 	 	 	
Total	  	$	37.9	  	 	$	23.0	  	
	  	 	 	 	 	 	 	 	
2012
During 2012, 118 total retail and warehouse locations were closed as part of the identified restructuring plan. The closures occurred throughout 2012 with a majority of the activity in the first and second quarters. The Company recorded total restructuring charges of $35.1 million before taxes ($21.2 million after taxes). These charges included:

 	  	Before-Tax
Charges	 	 	After-Tax
Charges	 	
 	  	(Dollars in millions)	 	
Facility costs	  	$	13.0	  	 	$	7.9	  	
Severance	  	 	11.9	  	 	 	7.2	  	
Personnel costs	  	 	10.6	  	 	 	6.4	  	
Accelerated amortization and depreciation	  	 	1.2	  	 	 	0.7	  	
Professional services	  	 	1.1	  	 	 	0.6	  	
Gain on sale of fixed assets	  	 	(2.7	) 	 	 	(1.6	) 	
	  	 	 	 	 	 	 	 	
Total	  	$	35.1	  	 	$	21.2	  	

F-15

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
3. Restructuring Charges  (continued)
 
2011
During 2011, 61 total retail and warehouse locations were closed and an additional three warehouse locations were relocated to better serve the existing customer base. The closures and relocations occurred throughout 2011 with a majority of the activity in the third and fourth quarters. The Company recorded total restructuring charges of $43.6 million before taxes ($26.7 million after taxes) related to the overall restructuring plan. These charges included:

 	  	Before-Tax
Charges	 	  	After-Tax
Charges	 	
 	  	(Dollars in millions)	 	
Severance	  	$	12.2	  	  	$	7.6	  	
Professional services	  	 	9.9	  	  	 	6.0	  	
Facility costs	  	 	7.0	  	  	 	4.2	  	
Personnel costs	  	 	6.9	  	  	 	4.2	  	
Write-down of intangible asset	  	 	6.7	  	  	 	4.1	  	
Accelerated amortization and depreciation	  	 	0.5	  	  	 	0.3	  	
Loss on sale of fixed assets	  	 	0.4	  	  	 	0.3	  	
	  	 	 	 	  	 	 	 	
Total	  	$	43.6	  	  	$	26.7	  	
	  	 	 	 	  	 	 	 	
The corresponding liability and activity during the periods presented are detailed in the table below. The restructuring liability is included within other non-current liabilities ($1.9 million and $2.3 million at December 31, 2013 and 2012, respectively) and other accrued liabilities ($5.8 million and $1.5 million for 2013 and 2012, respectively) in the combined balance sheets.

 	  	Total	 	
 	  	(Dollars in
millions)	 	
Liability at December 31, 2011	  	 	4.7	  	
Additional provision	  	 	36.6	  	
Payments	  	 	(37.0	) 	
Adjustment of prior year’s estimate	  	 	(0.5	) 	
	  	 	 	 	
Liability at December 31, 2012	  	$	3.8	  	
Additional provision	  	 	44.0	  	
Payments	  	 	(39.7	) 	
Adjustment of prior year’s estimate	  	 	(0.4	) 	
	  	 	 	 	
Liability at December 31, 2013	  	$	7.7	  	
	  	 	 	 	
4. Discontinued Operations
During 2011, the Company ceased its Canadian operations which provided distribution of printing supplies to Canadian based customers. Additionally, the Company ceased its printing press distribution business which was located in the U.S. Historically, both of these businesses had been included in the Company’s Print segment. As the operations and cash flows of these components have been eliminated from the ongoing operations of the Company and the Company will not have any significant continuing involvement in the operations of the components, these components are included in discontinued operations for all periods presented.
 
F-16

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
4. Discontinued Operations  (continued)
 
Net sales, income (loss) from operations and loss on disposition for discontinued operations are as follows:

 	  	2013	 	 	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
Net sales	  	$	—  	  	 	$	—  	  	 	$	82.1	  	
Loss from operations	  	 	(0.5	) 	 	 	(0.4	) 	 	 	(6.4	) 	
Restructuring and disposal gains (costs)	  	 	0.7	  	 	 	(10.1	) 	 	 	(8.6	) 	
Income (loss) from discontinued operations, net of income tax benefit of $0.0, $0.5 and $1.4, respectively	  	 	0.2	  	 	 	(10.0	) 	 	 	(13.6	) 	
5. Supplementary Financial Statement Information
Inventories, Net
The Company’s inventories are comprised of finished goods. The LIFO inventory method is used to value the Company’s inventories. Approximately 97% of inventories were valued using this method. If the first-in, first-out method had been used, it would have increased total inventory balances by approximately $76.6 million and $73.2 million at December 31, 2013 and 2012, respectively. During 2013, the Company incurred a LIFO decrement of $13.9 million. During 2013, 2012 and 2011, liquidation of LIFO layers generated (expense) / income of $(3.4), $(1.0) and $0.8, respectively.
Other Current Assets
The components of other current assets were as follows at December 31, 2013 and 2012:

 	  	December 31,	 	
 	  	2013	 	  	2012	 	
 	  	(Dollars in millions)	 	
Rebates receivable	  	$	18.4	  	  	$	 22.3	  	
Prepaid expenses	  	 	5.6	  	  	 	6.8	  	
Other	  	 	2.3	  	  	 	0.4	  	
	  	 	 	 	  	 	 	 	
Other current assets	  	$	 26.3	  	  	$	29.5	  	
	  	 	 	 	  	 	 	 	
Property and Equipment, Net
The components of property and equipment, net were as follows at December 31, 2013 and 2012:

 	  	December 31,	 	
 	  	2013	 	  	2012	 	
 	  	(Dollars in millions)	 	
Land, buildings and improvements	  	$	143.8	  	  	$	171.3	  	
Machinery and equipment	  	 	72.5	  	  	 	73.1	  	
Internal-use software	  	 	84.5	  	  	 	84.5	  	
Construction in process	  	 	4.9	  	  	 	5.8	  	
	  	 	 	 	  	 	 	 	
Gross cost	  	 	305.7	  	  	 	334.7	  	
Less accumulated depreciation and amortization	  	 	198.6	  	  	 	202.7	  	
	  	 	 	 	  	 	 	 	
Property and equipment, net	  	$	107.1	  	  	$	132.0	  	

F-17

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
5. Supplementary Financial Statement Information  (continued)

 	  	2013	 	  	2012	 	  	2011	 	
 	  	(Dollars in millions)	 	
Depreciation and amortization expense, property and equipment	  	$	15.9	  	  	$	12.9	  	  	$	13.1	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Depreciation expense was $7.6 million, $9.9 million and $10.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. Amortization of internal-use software costs was $8.3 million, $3.0 million and $3.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. Unamortized internal-use software costs, including amounts recorded in construction in progress, were $17.1 million and $25.4 million at December 31, 2013 and 2012, respectively. During 2013, 2012, and 2011, $0.3 million, $1.2 million, and $0.5 million of depreciation is included in restructuring, respectively.
Assets Held for Sale
As part of the Company’s restructuring activities described in Note 3 certain land, buildings and improvements have been classified as held for sale within the combined balance sheet as of December 31, 2013 and 2012 as the Company has committed to a plan to sell the identified assets and the assets are available for immediate sale.
Accrued Payroll and Benefits
The components of accrued payroll and benefits were as follows at December 31, 2013 and 2012:

 	  	December 31,	 	
 	  	2013	 	  	2012	 	
 	  	(Dollars in millions)	 	
Employee payroll	  	$	43.8	  	  	$	31.2	  	
Employee bonuses	  	 	2.8	  	  	 	15.5	  	
Payroll tax	  	 	8.3	  	  	 	8.7	  	
	  	 	 	 	  	 	 	 	
Accrued payroll and benefits	  	$	54.9	  	  	$	55.4	  	
	  	 	 	 	  	 	 	 	
Other Accrued Liabilities
The components of other accrued liabilities were as follows at December 31, 2013 and 2012:

 	  	December 31,	 	
 	  	2013	 	  	2012	 	
 	  	(Dollars in millions)	 	
Customer incentive	  	$	12.8	  	  	$	12.3	  	
Other accrued expenses	  	 	11.5	  	  	 	7.7	  	
Sales tax	  	 	3.1	  	  	 	3.3	  	
Freight	  	 	2.4	  	  	 	2.8	  	
Deferred severance	  	 	3.4	  	  	 	2.3	  	
Real estate tax	  	 	2.0	  	  	 	2.0	  	
Accrued tax	  	 	1.3	  	  	 	1.8	  	
	  	 	 	 	  	 	 	 	
Other accrued liabilities	  	$	36.5	  	  	$	32.2	  	
	  	 	 	 	  	 	 	 	
6. Goodwill and Other Intangibles, Net
The net goodwill balance is specific to the Packaging reportable segment and approximated $26.4 million at December 31, 2013 and 2012. Since the adoption of ASC 350, Intangibles – Goodwill and Other , in 2002, the
 
F-18

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
6. Goodwill and Other Intangibles, Net  (continued)
 
Company has recognized impairment charges of $373.0 million; there were no impairment charges related to goodwill for the years ended December 31, 2011, 2012 or 2013. The Company made no acquisitions during 2011, 2012 and 2013.
Identifiable intangible assets were comprised of the following at December 31, 2013 and 2012:

 	  	December 31,	 	  	 	 	
 	  	2013	 	  	2012	 	  	 	 	
 	  	Gross
Carrying
Amount	 	  	Accumulated
Amortization	 	  	Gross
Carrying
Amount	 	  	Accumulated
Amortization	 	  	Remaining
Life	 	
 	  	(Dollars in millions)	 	  	 	 	
Customer lists	  	$	30.7	  	  	$	21.5	  	  	$	30.7	  	  	$	20.1	  	  	 	1–7 years	  	
Trade names	  	 	0.2	  	  	 	0.1	  	  	 	0.2	  	  	 	—  	  	  	 	11 years	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  				
Total	  	$	30.9	  	  	$	21.6	  	  	$	30.9	  	  	$	20.1	  	  				
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  				
The Company recognized the following amounts as amortization expense related to intangible assets for the years ended December 31, 2013, 2012 and 2011:

 	  	2013	 	  	2012	 	  	2011	 	
 	  	(Dollars in millions)	 	
Amortization expense related to intangible assets	  	$	1.5	  	  	$	2.3	  	  	$	9.7	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Included in the above amounts is an impairment charge of $6.7 million recorded in 2011 related to the Central Lewmar trade name, which is included within restructuring charges in the combined statements of operations and comprehensive income. The Central Lewmar trade name was deemed to have a fair value of $0 and is a classified as a Level 3 fair value measurement.
Based on current intangibles subject to amortization, estimated amortization expense for each of the succeeding years is as follows: 2014 – $1.4 million, 2015 – $1.4 million, 2016 – $1.4 million, 2017 – $1.4 million, 2018 – $1.4 million and cumulatively thereafter – $2.3 million.
7. Income Taxes
The components of the Company’s earnings from continuing operations before income taxes and equity earnings by taxing jurisdiction were as follows:

 	  	2013	 	 	2012	 	  	2011	 	
 	  	(Dollars in millions)	 	
(Loss) income:	  				 				  				
U.S.	  	$	(2.1	) 	 	$	15.8	  	  	$	45.0	  	
Non-U.S.	  	 	2.5	  	 	 	7.7	  	  	 	11.7	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Income from continuing operations before income taxes	  	$	0.4	  	 	$	23.5	  	  	$	56.7	  	

F-19

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
7. Income Taxes  (continued)
 
A summary of income tax (benefit) provision from continuing operations in the Combined Statement of Operations and comprehensive income is as follows:

 	  	2013	 	 	2012	 	  	2011	 	
 	  	(Dollars in millions)	 	
Current tax (benefit) provision:	  				 				  				
U.S. federal	  	$	(3.3	) 	 	$	4.6	  	  	$	7.2	  	
U.S. state and local	  	 	(0.1	) 	 	 	1.0	  	  	 	1.5	  	
Non-U.S.	  	 	0.5	  	 	 	2.1	  	  	 	3.0	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
	  	 	(2.9	) 	 	 	7.7	  	  	 	11.7	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Deferred tax provision:	  				 				  				
U.S. federal	  	 	3.0	  	 	 	1.0	  	  	 	8.1	  	
U.S. state and local	  	 	0.2	  	 	 	0.3	  	  	 	1.4	  	
Non-U.S.	  	 	0.1	  	 	 	0.1	  	  	 	—  	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
	  	 	3.3	  	 	 	1.4	  	  	 	9.5	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Income tax provision	  	$	0.4	  	 	$	9.1	  	  	$	21.2	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Income tax benefit separately allocated to discontinued operations was $0.0, $0.5 million and $1.4 million for the years ending December 31, 2013, 2012 and 2011, respectively.
A reconciliation of income tax expense from continuing operations using the statutory U.S. income tax rate compared with the actual income tax provision follows:

 	  	2013	 	 	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
Income from continuing operations before income taxes	  	 	0.4	  	 	 	23.5	  	 	 	56.7	  	
Statutory U.S. income tax rate	  	 	35.0	% 	 	 	35.0	% 	 	 	35.0	% 	
Tax expense using statutory U.S. income tax rate	  	 	0.1	  	 	 	8.2	  	 	 	19.9	  	
State and local income taxes	  	 	—  	  	 	 	0.7	  	 	 	2.1	  	
Foreign rate differential	  	 	(0.1	) 	 	 	(0.6	) 	 	 	(1.1	) 	
Meals and entertainment	  	 	0.4	  	 	 	0.6	  	 	 	0.6	  	
Other	  	 	—  	  	 	 	0.2	  	 	 	(0.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income tax provision	  	 	0.4	  	 	 	9.1	  	 	 	21.2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Effective income tax rate	  	 	100.0	% 	 	 	38.7	% 	 	 	37.4	% 	

F-20

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
7. Income Taxes  (continued)
 
The tax effects of significant temporary differences, representing deferred income tax assets and liabilities as of December 31, 2013 and 2012, were as follows:

 	  	December 31,	 	
 	  	2013	 	  	2012	 	
 	  	Domestic	 	 	Non-US	 	  	Domestic	 	 	Non-US	 	
 	  	(Dollars in millions)	 	
Deferred income tax assets:	  				 				  				 				
Bad debt reserves	  	$	8.6	  	 	$	—  	  	  	$	9.3	  	 	$	—  	  	
Accrued compensation	  	 	7.1	  	 	 	—  	  	  	 	10.8	  	 	 	—  	  	
Other current	  	 	2.3	  	 	 	0.4	  	  	 	—  	  	 	 	0.7	  	
Goodwill and intangibles	  	 	18.2	  	 	 	—  	  	  	 	21.8	  	 	 	—  	  	
Long-term compensation	  	 	8.3	  	 	 	—  	  	  	 	8.1	  	 	 	—  	  	
Other non-current	  	 	1.4	  	 	 	0.1	  	  	 	1.1	  	 	 	—  	  	
Net operating losses and credit Carryforwards	  	 	3.4	  	 	 	—  	  	  	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Gross deferred income tax assets	  	 	49.3	  	 	 	0.5	  	  	 	51.1	  	 	 	0.7	  	
Less valuation allowance	  	 	—  	  	 	 	—  	  	  	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Deferred income tax asset	  	 	49.3	  	 	 	0.5	  	  	 	51.1	  	 	 	0.7	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Deferred income tax liabilities:	  				 				  				 				
Inventory	  	 	(31.9	) 	 	 	—  	  	  	 	(31.6	) 	 	 	—  	  	
Fixed assets	  	 	(8.7	) 	 	 	—  	  	  	 	(7.1	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Gross deferred income tax liabilities	  	 	(40.6	) 	 	 	—  	  	  	 	(38.7	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Net deferred income tax asset	  	$	8.7	  	 	$	0.5	  	  	$	12.4	  	 	$	0.7	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
The Company’s deferred balances include $4.0 million in federal and state net operating loss carryforwards that were generated in 2013. The federal net operating loss carryforward will expire in 2033 and the state net operating loss carryforward will expire in different years depending on the jurisdiction. In addition to the net operating loss carryforward, the Company maintains an Alternative Minimum Tax credit carryforward of $0.4 million which has an indefinite life.
The deferred income tax balances included in the combined balance sheets as of December 31, 2013 and 2012 were as follows:

 	  	2013	 	 	2012	 	
 	  	(Dollars in millions)	 	
Deferred income tax liabilities (current)	  	$	(13.5	) 	 	$	(11.1	) 	
Deferred income tax assets (non-current)	  	 	22.7	  	 	 	24.2	  	
	  	 	 	 	 	 	 	 	
Net deferred income tax asset	  	$	9.2	  	 	$	13.1	  	

F-21

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
7. Income Taxes  (continued)
 
A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2013, 2012 and 2011 is as follows:

 	  	2013	 	 	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
Balance at January 1	  	$	(1.7	) 	 	$	(1.4	) 	 	$	(1.1	) 	
Additions based on tax positions related to current year	  	 	—  	  	 	 	(0.3	) 	 	 	(0.3	) 	
Expiration of statutes of limitation	  	 	1.1	  	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31	  	$	(0.6	) 	 	$	(1.7	) 	 	$	(1.4	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Included in the balance as of December 31, 2013, 2012 and 2011 are $0.6, $1.7 and $1.4, respectively, for tax positions for which the ultimate benefits are highly certain, but for which there is uncertainty about the timing of such benefits. However, except for the possible effect of any penalties, any disallowance that would change the timing of these benefits would not affect the annual effective tax rate, but would accelerate the payment of cash to the taxing authority to an earlier period.
The Company accrues interest on unrecognized tax benefits as a component of interest expense. Penalties, if incurred, are recognized as a component of income tax expense. The Company had less than $0.1 million in each year accrued for the payment of estimated interest associated with unrecognized tax benefits at December 31, 2013, 2012 and 2011, respectively.
In assessing the realizability of the deferred tax assets at December 31, 2013, 2012 and 2011, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the Company believes it is more likely than not that it will realize the benefits of these deductible differences.
The major jurisdictions where the Company files income tax returns, both separately and as a part of International Paper Company, are the United States, Canada, Mexico and the Netherlands. Generally, tax years 2002 through 2012 remain open and subject to examination by the relevant tax authorities. The Company is typically engaged in various tax examinations at any given time, both in the United States and overseas. In 2013, the Company concluded its examination with the U.S. Internal Revenue Service for the tax years 2006-2009. As a result of the completion of the examinations, the Company reduced its unrecognized tax benefits by approximately $1.1 million. Due to expiration of statutes of limitation, the Company currently estimates that the amount of unrecognized tax benefits could be reduced by up to $0.3 million during the next twelve months.
Deferred income taxes are not provided for temporary differences of approximately $37.7 million as of December 31, 2013, representing earnings non-U.S. subsidiaries intended to be permanently reinvested. Computation of the potential deferred tax liability associated with these undistributed earnings and other basis difference is not practicable.
 
F-22

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
 
8. Commitments and Contingent Liabilities
Certain property, machinery and equipment are leased under cancelable and noncancelable agreements.
At December 31, 2013, total future minimum commitments under existing noncancelable operating leases were as follows:

 	  	2014	 	  	2015	 	  	2016	 	  	2017	 	  	2018	 	  	Thereafter	 	
 	  	(Dollars in millions)	 	
Lease obligations	  	$	46.3	  	  	$	38.2	  	  	$	33.0	  	  	$	29.4	  	  	$	25.5	  	  	$	61.1	  	
Sublease income	  	 	0.9	  	  	 	0.8	  	  	 	0.8	  	  	 	0.5	  	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	45.4	  	  	$	37.4	  	  	$	32.2	  	  	$	28.9	  	  	$	25.5	  	  	$	61.1	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Rent expense was $65.0 million, $64.4 million and $71.6 million for the years ended December 31, 2013, 2012 and 2011, respectively.
Operating Leases
xpedx leases certain of its distribution facilities, operating equipment and office equipment under noncancelable operating leases with terms greater than one year. Operating lease terms, including renewal options likely to be exercised, range from 3 months to 22 years and commitments range from $0.1 million to $15.3 million based on the type of equipment or size of the facility. Many of the leases include escalating rents for which the Company calculates annual straight-line expense and compares this to the actual lease expense by year in accordance with ASC 840, Leases . The Company records lease expense using the straight-line method. The difference between straight-line and actual lease payments is recorded on the combined balance sheet as a current or noncurrent liability based on the remaining lease term. Many leases include renewal options at predetermined rates or rates tied to a published index. All leasehold improvements are depreciated at the lesser of the asset life or the lease term and reflected in depreciation and amortization in the combined statements of operations and comprehensive income.
Guarantees
In connection with sales of property, equipment and other assets, xpedx commonly makes representations and warranties relating to such assets and may agree to indemnify buyers with respect to tax and environmental liabilities, breaches of representations and warranties, and other matters. Where liabilities for such matters are determined to be probable and subject to reasonable estimation, accrued liabilities are recorded at the time of sale as a cost of the transaction. There were no such guarantees at December 31, 2013 and 2012.
Legal Proceedings
From time to time the Company is involved in legal proceedings that are incidental to the operation of our business. Some of these proceedings seek remedies relating to product liability, personal injury claims, employment and pension matters, and commercial or contractual disputes, sometimes related to acquisitions. We will continue to defend vigorously against all claims.
Although the ultimate outcome of any legal mater cannot be predicted with certainty, based on present information, including our assessment of the merits of the particular claim, we do not expect that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material adverse effect on our cash flow, results of operations or financial condition.
 
F-23

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
8. Commitments and Contingent Liabilities  (continued)
 
Other
Approximately 10.0% of xpedx’s work force is represented under 23 collective bargaining agreements as of December 31, 2013. Six of these agreements expire during 2014.
9. Retirement and Post Retirement Benefit Plans
Certain of the Company’s employees participate in defined benefit pension and other post-employment benefit plans (the Plans) sponsored by International Paper and accounted for by International Paper in accordance with accounting guidance for defined benefit pension and other post-employment benefit plans. The total cost of the Plans is determined by actuarial valuation and the Company receives an allocation of the service cost of the Plans based upon a percent of salaries. The amount of net pension and other post-employment benefit expense attributable to the Company related to these International Paper sponsored plans was $15.1 million, $12.7 million and $12.8 million for the years ended December 31, 2013, 2012 and 2011, respectively, and is reflected within both cost of products sold and selling and administrative expenses in the combined statements of operations and comprehensive income.
The Company also contributes to multiemployer pension plans for certain collective bargaining U.S. employees that are not sponsored by International Paper. The risks of participating in these multiemployer pension plans are different from a single employer plan in the following aspects:
 
 	•	 	Assets contributed to the multiemployer plans by one employer may be used to provide benefits to employees of other participating employers.	
 
 	•	 	If a participating employer ceases contributing to the plan, the unfunded obligations of the plan may be inherited by the remaining participating employers.	
 
 	•	 	If the Company stops participating in the multiemployer plan, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.	
 
F-24

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
9. Retirement and Post Retirement Benefit Plans  (continued)
 
The Company made contributions to the bargaining unit supported multiemployer pension plans of approximately $2.5 million, $2.6 million and $2.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. xpedx’s participation in these plans for the annual period ended December 31, 2013 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employee Identification Number and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2013 and 2012 is for the plan’s year-end at December 31, 2013 and December 31, 2012, respectively. The zone status is based on information that xpedx received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a Financial Improvement Plan or a Rehabilitation Plan is either pending or has been implemented. The last column lists the expiration date(s) of the collective bargaining agreement(s) to which the plans are subject.

 	 	EIN/Pension
Plan No.	 	Pension Protection
Act Zone Status	 	FIP/RP Status
Pending/
Implemented	 	xpedx
Contributions	 	Surcharge
Imposed	 	Expiration
Date of
Collective
Bargaining
Agreement	
Pension Fund	 		 	    2013    	 	    2012    	 		 	2013	 	2012	 	2011	 		 		
 	 	 	 	 	 	 	 	 	 	(Dollars in millions)	 	 	 	 	
Western Conference of Teamsters Pension Plan	 	916145047/001	 	Green	 	Green	 	No	 	$1.2	 	$1.3	 	$1.4	 	No	 	10/31/2015	
										
Central States Southeast Southwest Pension (IBT)	 	366044243/001	 	Red	 	Red	 	RP,
Implemented	 	0.2	 	0.2	 	0.2	 	Yes	 	2/28/2014	
										
Teamsters Pension Trust Fund of Philadelphia and Vicinity	 	231511735/001	 	Yellow	 	Yellow	 	FIP,
Implemented	 	0.3	 	0.3	 	0.3	 	No	 	7/31/2015	
										
Graphic Arts Industry Joint Pension Trust	 	521074215/001	 	Red	 	Red	 	RP,
Implemented	 	0.1	 	0.1	 	0.1	 	Yes	 	6/16/2016	
										
New England Teamsters & Trucking Industry Pension	 	046372430/001	 	Red	 	Red	 	RP,
Implemented	 	0.5	 	0.5	 	0.4	 	No	 	9/30/2017	
										
Western Pennsylvania Teamsters and Employers Pension Plan	 	256029946/001	 	Red	 	Red	 	RP,
Implemented	 	0.2	 	0.2	 	0.2	 	No	 	3/31/2017	
	 		 		 		 		 	 	 	 	 	 	 		 		
Total contributions	 		 		 		 		 	$2.5	 	$2.6	 	$2.6	 		 		
	 		 		 		 		 	 	 	 	 	 	 		 		
Certain employees also participate in defined contribution plans sponsored by International Paper including the International Paper Company Salaried Savings Plan, the International Paper Company Hourly Savings Plan and the Deferred Compensation Savings Plan. The defined contribution plans allow eligible employees to contribute a portion of their salary to the plans and International Paper makes matching contributions to participant accounts on a specified percentage of employee deferrals as determined by the provisions of each plan.
Both the International Paper Company Salaried Savings Plan and the International Paper Company Hourly Savings Plan are tax-qualified defined contribution 401(k) savings plans. The Deferred Compensation Savings Plan is an unfunded nonqualified defined contribution plan. This plan permits eligible employees to continue to make deferrals and receive company matching contributions when their contributions to the International Paper Salaried Savings Plan are stopped due to limitations under U.S. tax law. Participant deferrals and company matching contributions are not invested in a separate trust, but are paid directly from International Paper’s general assets at the time benefits become due and payable.
Company matching contributions to the plans totaled approximately $16.7 million, $17.3 million and $18.0 million for the years ended December 31, 2013, 2012 and 2011, respectively.
 
F-25

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
9. Retirement and Post Retirement Benefit Plans  (continued)
 
Company employees also participate in other post-retirement benefit plans such as health care and life insurance plans sponsored by International Paper. International Paper provides certain retiree health care and life insurance benefits covering certain U.S. salaried and hourly employees. International Paper does not fund these benefits prior to payment and has the right to modify or terminate certain of these plans in the future. The service cost related to xpedx employees covered by these plans totaled approximately $2.9 million , $3.0 million and $3.1 million for the years ended December 31, 2013, 2012 and 2011, respectively.
10. Incentive Plans
As of December 31, 2013, all equity awards held by employees of the Company were granted under International Paper’s 2009 Incentive Compensation Plan (ICP) or predecessor plans. The ICP authorizes grants of restricted stock, restricted or deferred stock units, performance awards payable in cash or stock upon the attainment of specified performance goals, dividend equivalents, stock options, stock appreciation rights, other stock-based awards and cash-based awards at the discretion of the Management Development and Compensation Committee of the Board of Directors (the Committee) that administers the ICP. Restricted stock units (RSU’s) were also awarded to certain non-U.S. employees. The following disclosures represent the Company’s portion of such plans.
Performance Share Plan
Under the Performance Share Plan (PSP), contingent awards of International Paper common stock are granted by the Committee. The PSP awards are earned over a three-year period. For the 2011 grant, one-fourth of the award is earned during each of the three twelve-month periods, with the final one-fourth portion earned over the full three-year period. The 2012 and 2013 grants are earned evenly over a thirty-six-month period. PSP awards are earned based on the achievement of defined performance rankings of return on investment (ROI) and total shareholder return (TSR) compared to ROI and TSR peer groups of companies. Awards are weighted 75% for ROI and 25% for TSR for all participants except for officers for whom the awards are weighted 50% for ROI and 50% for TSR. The ROI component of the PSP awards is valued at the closing stock price on the day prior to the grant date. As the ROI component contains a performance condition, compensation expense, net of estimated forfeitures, is recorded over the requisite service period based on the most probable number of awards expected to vest. The TSR component of the PSP awards is valued using a Monte Carlo simulation as the TSR component contains a market condition. The Monte Carlo simulation estimates the fair value of the TSR component based on the expected term of the award, a risk-free rate, expected dividends and the expected volatility for International Paper and its competitors. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period and the volatility is based on the Company’s historical volatility over the expected term.
Beginning with the 2011 PSP, grants are made in performance-based restricted stock units (PSU’s). The PSP will continue to be paid in unrestricted shares of International Paper stock.
The following table sets forth the assumptions used to determine compensation cost for the market condition component of the PSP plan:

 	  	Twelve Months
Ended
December 31,
2013	 	  	Twelve Months
Ended
December 31, 2012	 	
Expected volatility	  	 	36.02%	  	  	 	25.25% – 55.33%	  	
Risk-free interest rate	  	 	0.37%	  	  	 	0.12% – 0.42%	  	
 
F-26

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
10. Incentive Plans  (continued)
 
The following summarizes PSP activity for the three years ended December 31, 2013:

 	  	Shares/
Units	 	 	Weighted
Average
Grant Date
Fair Value	 	
 	  	 	 	 	(Actual Dollar)	 	
Outstanding at December 31, 2010	  	 	804,579	  	 	 	26.56	  	
Granted	  	 	471,214	  	 	 	28.08	  	
Shares issued	  	 	(168,409	) 	 	 	36.26	  	
Forfeited	  	 	(23,561	) 	 	 	28.08	  	
	  	 	 	 	 	 	 	 	
Outstanding at December 31, 2011	  	 	1,083,823	  	 	 	25.68	  	
Granted	  	 	336,334	  	 	 	31.33	  	
Shares issued	  	 	(309,368	) 	 	 	19.10	  	
Forfeited	  	 	(16,817	) 	 	 	31.33	  	
	  	 	 	 	 	 	 	 	
Outstanding at December 31, 2012	  	 	1,093,972	  	 	$	29.28	  	
Granted	  	 	296,888	  	 	 	39.55	  	
Shares issued	  	 	(334,228	) 	 	 	28.93	  	
Forfeited	  	 	(14,844	) 	 	 	39.55	  	
	  	 	 	 	 	 	 	 	
Outstanding at December 31, 2013	  	 	1,041,788	  	 	$	32.21	  	
	  	 	 	 	 	 	 	 	
Executive Continuity and Restricted Stock Award Programs
The Executive Continuity Award program provides for the granting of tandem awards of restricted stock and/or nonqualified stock options to key executives. Grants are restricted and awards conditioned on attainment of a specified age. The awarding of a tandem stock option results in the cancellation of the related restricted shares.
The service-based Restricted Stock Award program (RSA), designed for recruitment, retention and special recognition purposes, also provides for awards of restricted stock to key employees. Of the outstanding awards at December 31, 2013, 25,000 shares are expected to vest in 2014.
The following summarizes the activity of the Executive Continuity Award program and RSA program for the three years ended December 31, 2013:

 	  	Shares/
Units	 	 	Weighted
Average
Grant Date
Fair Value	 	
 	  	 	 	 	(Actual Dollar)	 	
Outstanding at December 31, 2010	  	 	—  	  	 	 	—  	  	
Granted	  	 	5,000	  	 	 	27.24	  	
	  	 	 	 	 	 	 	 	
Outstanding at December 31, 2011	  	 	5,000	  	 	 	27.24	  	
Granted	  	 	25,000	  	 	 	35.15	  	
Shares issued	  	 	(2,500	) 	 	 	27.24	  	
	  	 	 	 	 	 	 	 	
Outstanding at December 31, 2012	  	 	27,500	  	 	$	34.43	  	
Granted	  				 				
Shares issued	  	 	(2,500	) 	 	 	27.24	  	
	  	 	 	 	 	 	 	 	
Outstanding at December 31, 2013	  	 	25,000	  	 	$	35.15	  	

F-27

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
10. Incentive Plans  (continued)
 
Stock-based compensation expense and related income tax benefits were as follows:

 	 	2013	 	 	2012	 	 	2011	 	
 	 	(Dollars in millions)	 	
Total stock-based compensation expense (included in selling and administrative expense)	 	$	15.4	  	 	$	13.1	  	 	$	10.1	  	
Income tax benefits related to stock-based compensation	 	 	8.5	  	 	 	6.2	  	 	 	4.4	  	
At December 31, 2013, $10.2 million of compensation cost, net of estimated forfeitures, related to unvested restricted performance shares, executive continuity awards and restricted stock attributable to future performance had not yet been recognized. This amount will be recognized in expense over a weighted-average period of 1.65 years.
11. Financial Information by Reportable Segment and Geographic Area
xpedx’s reportable segments, Print, Packaging and Facility Solutions, are consistent with the internal structure used to manage these businesses and the Company’s major product lines.
For management purposes, xpedx reports the operating performance of each segment based on operating profit. Intersegment sales and transfers are recorded at current market prices.
Information by Reportable Segment
Net Sales
The following table presents net sales by reportable segment for the years ended December 31, 2013, 2012 and 2011:

 	  	2013	 	  	2012	 	  	2011	 	
 	  	(Dollars in millions)	 	
Print	  	$	3,219.4	  	  	$	3,486.2	  	  	$	3,911.9	  	
Packaging	  	 	1,587.2	  	  	 	1,582.1	  	  	 	1,617.0	  	
Facility Solutions	  	 	845.8	  	  	 	943.6	  	  	 	979.9	  	
Corporate and intersegment sales	  	 	—  	  	  	 	0.1	  	  	 	0.4	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net sales	  	$	5,652.4	  	  	$	6,012.0	  	  	$	6,509.2	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Operating Profit
The following table presents operating profit (loss) by reportable segment for the years ended December 31, 2013, 2012 and 2011:

 	  	2013	 	 	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
Print	  	$	27.4	  	 	$	32.3	  	 	$	54.5	  	
Packaging	  	 	43.1	  	 	 	51.0	  	 	 	61.5	  	
Facility Solutions	  	 	(24.1	) 	 	 	(35.5	) 	 	 	(18.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Operating profit	  	 	46.4	  	 	 	47.8	  	 	 	97.7	  	
Corporate items	  	 	(46.0	) 	 	 	(24.3	) 	 	 	(41.0	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Earnings from continuing operations before income taxe s	  	$	0.4	  	 	$	23.5	  	 	$	56.7	  	

F-28

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
11. Financial Information by Reportable Segment and Geographic Area  (continued)
 
Assets
The following table presents total assets by reportable segment as of December 31, 2013 and 2012:

 	  	2013	 	  	2012	 	
 	  	(Dollars in millions)	 	
Print	  	$	628.5	  	  	$	680.5	  	
Packaging	  	 	418.7	  	  	 	399.9	  	
Facility Solutions	  	 	209.1	  	  	 	224.7	  	
Corporate	  	 	0.6	  	  	 	2.8	  	
	  	 	 	 	  	 	 	 	
Total assets	  	$	1,256.9	  	  	$	1,307.9	  	
	  	 	 	 	  	 	 	 	
Restructuring Charges
The following table presents restructuring charges by reportable segment for the years ended December 31, 2013, 2012 and 2011:

 	  	2013	 	  	2012	 	  	2011	 	
 	  	(Dollars in millions)	 	
Print	  	$	13.0	  	  	$	20.5	  	  	$	25.2	  	
Packaging	  	 	8.9	  	  	 	5.7	  	  	 	9.0	  	
Facility Solutions	  	 	3.8	  	  	 	4.5	  	  	 	4.4	  	
Corporate	  	 	12.2	  	  	 	4.4	  	  	 	5.0	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Restructuring charges	  	$	37.9	  	  	$	35.1	  	  	$	43.6	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Capital Spending
The following table presents capital spending by reportable segment for the years ended December 31, 2013, 2012 and 2011:

 	  	2013	 	  	2012	 	  	2011	 	
 	  	(Dollars in millions)	 	
Print	  	$	3.5	  	  	$	7.9	  	  	$	9.5	  	
Packaging	  	 	4.2	  	  	 	4.6	  	  	 	5.7	  	
Facility Solutions	  	 	1.6	  	  	 	2.0	  	  	 	2.2	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total from continuing operations	  	$	9.3	  	  	$	14.5	  	  	$	17.4	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Depreciation and Amortization
The following table presents depreciation and amortization by reportable segment for the years ended December 31, 2013, 2012 and 2011:

 	  	2013	 	  	2012	 	  	2011	 	
 	  	(Dollars in millions)	 	
Print	  	$	10.5	  	  	$	7.6	  	  	$	9.7	  	
Packaging	  	 	3.7	  	  	 	3.6	  	  	 	3.4	  	
Facility Solutions	  	 	2.9	  	  	 	2.8	  	  	 	2.5	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Depreciation and amortization	  	$	17.1	  	  	$	14.0	  	  	$	15.6	  	

F-29

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
11. Financial Information by Reportable Segment and Geographic Area  (continued)
 
Information by Geographic Area
Substantially all of the Company’s operations and identifiable assets are located in the United States. The following tables present net sales and long-lived assets by geographic area.
Net Sales (a)
The following table presents net sales by geographic area for the years ended December 31, 2013, 2012 and 2011:

 	  	2013	 	  	2012	 	  	2011	 	
 	  	(Dollars in millions)	 	
United States	  	$	5,508.5	  	  	$	5,830.9	  	  	$	6,295.3	  	
Other countries	  	 	143.9	  	  	 	181.1	  	  	 	213.9	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net sales	  	$	5,652.4	  	  	$	6,012.0	  	  	$	6,509.2	  	

(a)  	Net sales are attributed to countries based on the location of the purchaser/destination.	
Long-Lived Assets
The following table presents long-lived assets by geographic area as of December 31, 2013 and 2012:

 	  	December 31,	 	
 	  	2013	 	  	2012	 	
 	  	(Dollars in millions)	 	
United States	  	$	106.1	  	  	$	130.9	  	
Other countries	  	 	1.0	  	  	 	1.1	  	
	  	 	 	 	  	 	 	 	
Long-lived assets	  	$	107.1	  	  	$	132.0	  	
	  	 	 	 	  	 	 	 	
12. Concentrations of Credit Risk
Concentration of credit risk relates to trade receivables which arise in the normal course of business. The Company performs regular credit evaluations of its customers. Collateral is not always required and the majority of trade receivables are unsecured.
No one customer accounted for more than 5% of net sales or accounts receivable as of or for the years ended December 31, 2013, 2012 and 2011. The Company does not believe that there is any concentration of sales or accounts receivable that present a significant risk.
13. Related-Party Transactions and Parent Company Equity
Related-Party Sales and Purchases
For the years ended December 31, 2013, 2012 and 2011, the Company sold products to other International Paper businesses in the amount of $53.0 million, $65.1 million and $60.0 million, respectively, which is included in net sales in the combined statements of operations and comprehensive income. The Company also purchases inventories from other International Paper businesses. The Company purchased and recognized in cost of
 
F-30

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
13. Related-Party Transactions and Parent Company Equity  (continued)
 
products sold inventory from International Paper of $604.4 million, $639.0 million and $651.6 million in the years ended December 31, 2013, 2012 and 2011, respectively. At December 31, 2013 and 2012, the aggregate amount of inventories purchased from other International Paper businesses that remained on the Company’s combined balance sheets was $48.5 million and $53.7 million, respectively.
Related-Party Receivables Securitization
International Paper’s contractually committed credit facilities include up to $1.0 billion of commercial paper-based financings based on eligible receivables balances ($958 million available as of December 31, 2013) under a receivables securitization program. The accounts receivable of xpedx are included in the eligible receivable balances under the securitization program. At December 31, 2013 and 2012 there were no borrowings under the receivables securitization program.
Parent Company Investment
Net transfers to parent are included within parent company equity on the combined statements of changes in parent company equity. All significant intercompany transactions between the Company and International Paper have been included in these combined financial statements and are considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the combined statements of cash flows as a financing activity and in the combined balance sheets as Parent company investment. The components of the net transfers to parent for the years ended December 31, 2013, 2012 and 2011 are as follows:

 	  	2013	 	 	2012	 	 	2011	 	
 	  	(Dollars in millions)	 	
Intercompany sales and purchases, net	  	$	556.6	  	 	$	575.2	  	 	$	590.3	  	
Cash pooling and general financing activities	  	 	(675.8	) 	 	 	(695.4	) 	 	 	(776.0	) 	
Corporate allocations including income taxes	  	 	84.1	  	 	 	84.8	  	 	 	100.8	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total net transfers to parent	  	$	(35.1	) 	 	$	(35.4	) 	 	$	(84.9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
On June 27, 2011 the Company borrowed $15.1 million from the Parent bearing interest at 1.86%. Additionally, on August 31, 2011, the Company separately borrowed $5.1 million from the Parent bearing interest of
3.05%. There are no covenants with these Promissory Notes and interest is due to the Parent at the maturity date. On December 31, 2013, the Company entered into a General Conveyance Agreement with its Parent whereby the debt was assumed by the Parent effective immediately.
14. Subsequent Events
These combined financial statements reflect management’s evaluation of subsequent events through April 4, 2014, the date the Company’s financial statements were originally available to be issued, and through June 4, 2014, the date the Company’s financial statements were available to be reissued.
On January 28, 2014, International Paper announced that the Company and Unisource Worldwide, Inc. (“Unisource”) will merge under the terms of a definitive agreement that will result in the creation of a new publicly traded company.
International Paper will indirectly contribute the assets of the Company to a newly formed wholly owned subsidiary, Veritiv Corporation, in exchange for the stock of the subsidiary, a cash payment of approximately
 
F-31

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
14. Subsequent Events  (continued)
 
$400 million expected to be financed with new debt in the new company’s capital structure, and the potential for an additional cash payment of up to $100 million pursuant to an “earn-out” provision. International Paper will distribute shares of the new company to International Paper shareholders on a pro rata basis in a manner intended to be tax-free to International Paper and its shareholders.
Following the spinoff of the new company to International Paper shareholders, Unisource will immediately merge with and into the new company. In connection with the merger, the shares of Unisource will be converted into a number of shares of the new company such that, following the merger, approximately 51% of the shares of the new public company will be owned by International Paper shareholders, with the remaining approximately 49% of shares held by UWW Holdings LLC, the holding company that owns Unisource.
To finance the cash payment to International Paper and refinance existing debt of Unisource, the new company has entered into a commitment with three banks for $1.4 billion of asset-backed financing.
15. Restatement of Previously Issued Financial Statements
Subsequent to the issuance of the 2013 combined financial statements, management discovered an error related to the deferred tax effect of the LIFO reserve. The Company incorrectly recognized a deferred tax asset instead of a deferred tax liability.
The following are previously reported and restated balances of affected line items in the Combined Balance Sheets as of December 31, 2013 and 2012 and the Combined Statements of Cash Flows and Combined Statements of Changes in Parent Company Equity for each of the three years ended December 31, 2013.
Combined Balance Sheets:

 	  	As of December 31, 2013	 	
 	  	As
Reported	 	  	Adjustments	 	 	As
Restated	 	
Deferred income tax assets	  	 	55.3	  	  	 	(55.3	) 	 	 	—  	  	
Total current assets	  	 	1,137.3	  	  	 	(55.3	) 	 	 	1,082.0	  	
Total assets	  	 	1,312.2	  	  	 	(55.3	) 	 	 	1,256.9	  	
Deferred income tax liabilities	  	 	—  	  	  	 	13.5	  	 	 	13.5	  	
Total current liabilities	  	 	451.3	  	  	 	13.5	  	 	 	464.8	  	
Total liabilities	  	 	463.8	  	  	 	13.5	  	 	 	477.3	  	
Parent company investment	  	 	853.1	  	  	 	(68.8	) 	 	 	784.3	  	
Total parent company equity	  	 	848.4	  	  	 	(68.8	) 	 	 	779.6	  	
Total liabilities and parent company equity	  	 	1,312.2	  	  	 	(55.3	) 	 	 	1,256.9	  	
 
F-32

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
15. Restatement of Previously Issued Financial Statements  (continued)

 	  	As of December 31, 2012	 	
 	  	As
Reported	 	  	Adjustments	 	 	As
Restated	 	
Deferred income tax assets	  	 	60.0	  	  	 	(60.0	) 	 	 	—  	  	
Total current assets	  	 	1,173.0	  	  	 	(60.0	) 	 	 	1,113.0	  	
Total assets	  	 	1,367.9	  	  	 	(60.0	) 	 	 	1,307.9	  	
Deferred income tax liabilities	  	 	—  	  	  	 	11.1	  	 	 	11.1	  	
Total current liabilities	  	 	466.8	  	  	 	11.1	  	 	 	477.9	  	
Total liabilities	  	 	483.7	  	  	 	11.1	  	 	 	494.8	  	
Parent company investment	  	 	890.3	  	  	 	(71.1	) 	 	 	819.2	  	
Total parent company equity	  	 	884.2	  	  	 	(71.1	) 	 	 	813.1	  	
Total liabilities and parent company equity	  	 	1,367.9	  	  	 	(60.0	) 	 	 	1,307.9	  	
Combined Statements of Cash Flows:

 	  	Year Ended December 31, 2013	 	
 	  	As
reported	 	 	Adjustment	 	 	As
restated	 	
Deferred income tax provision	  	 	5.2	  	 	 	(1.9	) 	 	 	3.3	  	
Cash provided by operating activities - continuing operations	  	 	54.9	  	 	 	(1.9	) 	 	 	53.0	  	
Cash provided by operating activities	  	 	54.1	  	 	 	(1.9	) 	 	 	52.2	  	
				
Net transfers to parent	  	 	(72.7	) 	 	 	1.9	  	 	 	(70.8	) 	
Cash used for financing activities - continuing operations	  	 	(78.5	) 	 	 	1.9	  	 	 	(76.6	) 	
Cash used for financing activities	  	 	(78.5	) 	 	 	1.9	  	 	 	(76.6	) 	
		
 	  	Year Ended December 31, 2012	 	
 	  	As
reported	 	 	Adjustment	 	 	As
restated	 	
Deferred income tax provision	  	 	4.5	  	 	 	(3.1	) 	 	 	1.4	  	
Cash provided by operating activities - continuing operations	  	 	61.7	  	 	 	(3.1	) 	 	 	58.6	  	
Cash provided by operating activities	  	 	59.1	  	 	 	(3.1	) 	 	 	56.0	  	
				
Net transfers to parent	  	 	(52.0	) 	 	 	3.1	  	 	 	(48.9	) 	
Cash used for financing activities - continuing operations	  	 	(50.3	) 	 	 	3.1	  	 	 	(47.2	) 	
Cash used for financing activities	  	 	(49.4	) 	 	 	3.1	  	 	 	(46.3	) 	
		
 	  	Year Ended December 31, 2011	 	
 	  	As
reported	 	 	Adjustment	 	 	As
restated	 	
Deferred income tax provision	  	 	4.5	  	 	 	5.0	  	 	 	9.5	  	
Cash provided by operating activities - continuing operations	  	 	96.5	  	 	 	5.0	  	 	 	101.5	  	
Cash provided by operating activities	  	 	102.7	  	 	 	5.0	  	 	 	107.7	  	
				
Net transfers to parent	  	 	(87.5	) 	 	 	(5.0	) 	 	 	(92.5	) 	
Cash used for financing activities - continuing operations	  	 	(86.2	) 	 	 	(5.0	) 	 	 	(91.2	) 	
Cash used for financing activities	  	 	(86.5	) 	 	 	(5.0	) 	 	 	(91.5	) 	
 
F-33

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Combined Financial Statements  (continued)
15. Restatement of Previously Issued Financial Statements  (continued)
 
Combined Statements of Changes in Parent Company Equity

 	  	Parent Company Investment	 	
 	  	As
Reported	 	 	Adjustments	 	 	As
Restated	 	
Balance, January 1, 2011	  	 	981.9	  	 	 	(68.7	) 	 	 	913.2	  	
Net transfers to parent	  	 	(79.8	) 	 	 	(5.1	) 	 	 	(84.9	) 	
Balance, December 31, 2011	  	 	924.0	  	 	 	(73.8	) 	 	 	850.2	  	
Net transfers to parent	  	 	(38.1	) 	 	 	2.7	  	 	 	(35.4	) 	
Balance, December 31, 2012	  	 	890.3	  	 	 	(71.1	) 	 	 	819.2	  	
Net transfers to parent	  	 	(37.4	) 	 	 	2.3	  	 	 	(35.1	) 	
Balance, December 31, 2013	  	 	853.1	  	 	 	(68.8	) 	 	 	784.3	  	
The Company’s Combined Balance Sheets; Combined Statements of Cash Flows; Combined Statements of Changes in Parent Company Equity; Note 7. Income Taxes; Note 11. Financial Information by Reportable Segment and Geographic Area; and Note 13. Related-Party Transactions and Parent Company Equity, have been restated to correct for this error. This error did not have an impact on the Combined Statements of Operations and Comprehensive Income.

F-34

Table of Contents
 xpedx
(A Business of International Paper Company)
Condensed Combined Statements of Operations and Comprehensive Income

 	  	For the Three Months
Ended March 31	 	
 	  	2014	 	 	2013	 	
 	  	(Unaudited, in Millions)	 	
Net sales (including sales to a related-party of $12.0 and $14.0, for the three months ended March 31, 2014 and 2013, respectively)	  	$	1,307.4	  	 	$	1,388.4	  	
Cost of products sold (including purchases from a related-party of $141.6 and $159.6 for the three months ended March 31, 2014 and 2013, respectively) (exclusive of depreciation and amortization shown separately below)	  	 	1,088.5	  	 	 	1,159.3	  	
Distribution expenses	  	 	77.1	  	 	 	81.5	  	
Selling and administrative expenses	  	 	128.6	  	 	 	139.1	  	
Depreciation and amortization	  	 	4.6	  	 	 	4.3	  	
Restructuring charges	  	 	(0.2	) 	 	 	7.1	  	
	  	 	 	 	 	 	 	 	
Operating income (loss)	  	 	8.8	  	 	 	(2.9	) 	
Other (income) expense, net	  	 	(0.5	) 	 	 	(1.5	) 	
	  	 	 	 	 	 	 	 	
Income (loss) from continuing operations before income taxes	  	 	9.3	  	 	 	(1.4	) 	
Income tax provision (benefit)	  	 	3.7	  	 	 	(0.5	) 	
	  	 	 	 	 	 	 	 	
Income (loss) from continuing operations	  	 	5.6	  	 	 	(0.9	) 	
(Loss) income from discontinued operations, net of income taxes	  	 	(0.1	) 	 	 	0.2	  	
	  	 	 	 	 	 	 	 	
Net income (loss)	  	 	5.5	  	 	 	(0.7	) 	
Other comprehensive income, net of tax:	  				 				
Change in cumulative foreign currency translation adjustment	  	 	0.6	  	 	 	1.0	  	
	  	 	 	 	 	 	 	 	
Total comprehensive income, net of tax	  	$	6.1	  	 	$	0.3	  	

The accompanying notes are an integral part of these condensed combined financial statements.
 
F-35

Table of Contents
 xpedx
(A Business of International Paper Company)
Condensed Combined Balance Sheets

 	  	March 31,
2014	 	 	December 31,
2013	 	
 	  	 	 	 	(as restated,
see Note 14)	 	
 	  	(Unaudited, in Millions)	 	
Assets	  				 				
Current assets:	  				 				
Cash and cash equivalents	  	$	7.3	  	 	$	5.7	  	
Accounts receivable, less allowances of $22.4 and $22.7 in 2014 and 2013, respectively	  	 	651.3	  	 	 	669.7	  	
Related-party receivable	  	 	12.8	  	 	 	10.1	  	
Inventories, net	  	 	356.3	  	 	 	360.9	  	
Other current assets	  	 	25.8	  	 	 	26.3	  	
Assets held for sale	  	 	8.7	  	 	 	9.3	  	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	1,062.2	  	 	 	1,082.0	  	
Property and equipment, net	  	 	103.7	  	 	 	107.1	  	
Other non-current assets	  	 	8.7	  	 	 	9.4	  	
Goodwill	  	 	26.4	  	 	 	26.4	  	
Other intangibles, net	  	 	9.0	  	 	 	9.3	  	
Deferred income tax assets	  	 	21.9	  	 	 	22.7	  	
	  	 	 	 	 	 	 	 	
Total assets	  	$	1,231.9	  	 	$	1,256.9	  	
	  	 	 	 	 	 	 	 	
Liabilities and parent company equity	  				 				
Current liabilities:	  				 				
Accounts payable	  	$	364.0	  	 	$	357.3	  	
Related-party payable	  	 	2.3	  	 	 	2.6	  	
Accrued payroll and benefits	  	 	52.4	  	 	 	54.9	  	
Deferred income tax liabilities	  	 	13.7	  	 	 	13.5	  	
Other accrued liabilities	  	 	31.0	  	 	 	36.5	  	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	463.4	  	 	 	464.8	  	
Non-current liabilities	  	 	11.5	  	 	 	12.5	  	
	  	 	 	 	 	 	 	 	
Total liabilities	  	 	474.9	  	 	 	477.3	  	
Commitments and contingent liabilities (Note 7)	  				 				
Parent company equity:	  				 				
Parent company investment	  	 	761.1	  	 	 	784.3	  	
Accumulated other comprehensive loss	  	 	(4.1	) 	 	 	(4.7	) 	
	  	 	 	 	 	 	 	 	
Total parent company equity	  	 	757.0	  	 	 	779.6	  	
	  	 	 	 	 	 	 	 	
Total liabilities and parent company equity	  	$	1,231.9	  	 	$	1,256.9	  	
	  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these condensed combined financial statements.
 
F-36

Table of Contents
 xpedx
(A Business of International Paper Company)
Condensed Combined Statements of Cash Flows

 	  	For the Three Months
Ended March 31	 	
 	  	2014	 	 	2013	 	
 	  	(Unaudited, in Millions)	 	
Operating activities	  				 				
Net income (loss)	  	$	5.5	  	 	 	(0.7	) 	
(Loss) income from discontinued operations, net of income taxes	  	 	(0.1	) 	 	 	0.2	  	
Income (loss) from continuing operations	  	 	5.6	  	 	 	(0.9	) 	
Depreciation and amortization	  	 	4.6	  	 	 	4.3	  	
Net gains on sales of fixed assets	  	 	(0.7	) 	 	 	(5.2	) 	
Provision for allowance for doubtful accounts	  	 	1.7	  	 	 	1.4	  	
Deferred income tax provision	  	 	1.1	  	 	 	0.9	  	
Stock-based compensation	  	 	1.1	  	 	 	4.3	  	
Changes in assets and liabilities:	  				 				
Accounts receivable	  	 	13.9	  	 	 	19.2	  	
Inventories, net	  	 	4.6	  	 	 	(6.0	) 	
Accounts payable and accrued liabilities	  	 	3.4	  	 	 	40.1	  	
Other	  	 	1.0	  	 	 	(11.4	) 	
	  	 	 	 	 	 	 	 	
Cash provided by operating activities – continuing operations	  	 	36.3	  	 	 	46.7	  	
Cash used for operating activities – discontinued operations	  	 	(1.1	) 	 	 	(0.1	) 	
	  	 	 	 	 	 	 	 	
Cash provided by operating activities	  	 	35.2	  	 	 	46.6	  	
Investing activities	  				 				
Invested in capital projects	  	 	(1.0	) 	 	 	(3.9	) 	
Proceeds from asset sales	  	 	1.0	  	 	 	12.5	  	
Other	  	 	0.5	  	 	 	(0.2	) 	
	  	 	 	 	 	 	 	 	
Cash provided by investing activities – continuing operations	  	 	0.5	  	 	 	8.4	  	
Cash provided by investing activities – discontinued operations	  	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	
Cash provided by investing activities	  	 	0.5	  	 	 	8.4	  	
Financing activities	  				 				
Net transfers to Parent	  	 	(31.1	) 	 	 	(45.1	) 	
Change in book overdrafts	  	 	(4.7	) 	 	 	(11.7	) 	
Other	  	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	
Cash used for financing activities – continuing operations	  	 	(35.8	) 	 	 	(56.8	) 	
Cash provided by (used for) financing activities – discontinued operations	  	 	1.1	  	 	 	(1.0	) 	
	  	 	 	 	 	 	 	 	
Cash used for financing activities	  	 	(34.7	) 	 	 	(57.8	) 	
	  	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash	  	 	0.6	  	 	 	(0.3	) 	
Change in cash and cash equivalents	  	 	1.6	  	 	 	(3.1	) 	
Cash and cash equivalents at beginning of period	  	 	5.7	  	 	 	15.4	  	
	  	 	 	 	 	 	 	 	
Cash and cash equivalents at end of period	  	$	7.3	  	 	$	12.3	  	
	  	 	 	 	 	 	 	 	
Supplementary cash flow information	  				 				
Income taxes paid, net of refunds	  	$	0.2	  	 	$	0.2	  	
	  	 	 	 	 	 	 	 	
Non-cash transactions	  				 				
Property additions included in accounts payable	  	$	—  	  	 	$	0.2	  	
	  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these condensed combined financial statements.
 
F-37

Table of Contents
 xpedx
(A Business of International Paper Company)
Condensed Combined Statements of Changes in Parent Company Equity

 	  	Parent
Company
Investment	 	 	Accumulated
Other
Comprehensive
Income (Loss)	 	 	Total Parent
Company
Equity	 	
 	  	(Unaudited, in Millions)
(as restated, see Note 14)	 	
Balance, December 31, 2012	  	$	819.2	  	 	$	(6.1	) 	 	$	813.1	  	
Net income	  	 	0.2	  	 	 	—  	  	 	 	0.2	  	
Other comprehensive income, net of tax	  	 	—  	  	 	 	1.4	  	 	 	1.4	  	
Net transfers to parent	  	 	(35.1	) 	 	 	—  	  	 	 	(35.1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance, December 31, 2013	  	 	784.3	  	 	 	(4.7	) 	 	 	779.6	  	
Net income	  	 	5.5	  	 	 	—  	  	 	 	5.5	  	
Other comprehensive income, net of tax	  	 	—  	  	 	 	0.6	  	 	 	0.6	  	
Net transfers to parent	  	 	(28.7	) 	 	 	—  	  	 	 	(28.7	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance, March 31, 2014	  	$	761.1	  	 	$	(4.1	) 	 	$	757.0	  	

 
The accompanying notes are an integral part of these condensed combined financial statements.
 
F-38

Table of Contents
 xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements
(unaudited)
Three Months Ended March 31, 2014
1. Basis of Combination
The unaudited interim condensed combined financial statements for the three months ended March 31, 2014 and 2013, and balance sheet as of March 31, 2014, included herein have not been audited by an independent registered public accounting firm, but in our opinion, all adjustments (which include normal recurring adjustments) necessary to make a fair statement of the financial position at March 31, 2014, and the results of operations and the statements of cash flows for the periods presented herein have been made. The results of operations for the three months ended March 31, 2014 and 2013 are not necessarily indicative of the operating results expected for the full fiscal year.
The unaudited interim condensed combined financial statements included herein have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. Although we believe the disclosures made are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules or regulations. These interim condensed combined financial statements should be read in conjunction with the audited combined financial statements and notes thereto.
The preparation of the unaudited interim condensed combined financial statements requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities, revenue and expenses, and certain financial statement disclosures. Significant estimates in these unaudited interim condensed combined financial statements include revenue recognition, postretirement benefits, income tax, and goodwill and other intangible asset impairment. Estimates are revised as additional information becomes available.
These condensed combined financial statements of xpedx (the Company) reflect the historical financial position, results of operations, changes in parent company equity and cash flows of the Company for the periods presented as the Company was historically managed within International Paper Company (International Paper or Parent). The condensed combined financial statements have been prepared on a “carve-out” basis and are derived from the consolidated financial statements and accounting records of International Paper. The condensed combined financial statements have been prepared in United States (U.S.) dollars and in accordance with generally accepted accounting principles in the U.S. (GAAP). The Company’s condensed combined financial statements may not be indicative of the Company’s future performance and do not necessarily reflect what the results of operations, financial position and cash flows would have been had it operated as an independent company during the periods presented.
The condensed combined financial statements include expense allocations for certain functions provided by International Paper, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, insurance and stock-based compensation. These expenses have been allocated to the Company on the basis of direct usage when identifiable, with the remainder principally allocated on the basis of percent of capital employed, headcount or other measures. During the three months ended March 31, 2014 and 2013, the Company was allocated $13.0 million and $23.0 million, respectively, of general corporate expenses incurred by International Paper which are included within selling and administrative expenses in the condensed combined statements of operations and comprehensive income. Management considers the basis on which the expenses have been allocated to reasonably reflect the utilization
 
F-39

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
1. Basis of Combination (continued)
 
of services provided to or the benefit received by the Company during the periods presented. The allocations may not, however, reflect the expenses the Company would have incurred as an independent company for the periods presented. Actual costs that may have been incurred if the Company had been a stand-alone company would depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and infrastructure. The Company is unable to determine what such costs would have been had the Company been independent. Following the separation, the Company will perform these functions using its own resources or purchased services. For an interim period, however, some of these functions will continue to be provided by International Paper under transition services agreements. In addition to the transition services agreements, we will enter into a number of commercial agreements with International Paper in connection with the separation.
Intercompany transactions between the Company and International Paper have been included in these condensed combined financial statements and are primarily considered to be effectively settled for cash in the condensed combined financial statements at the time the transaction is recorded. For those intercompany transactions historically settled in cash between the Company and International Paper, the Company has separately disclosed those balances in the balance sheet as of March 31, 2014 and December 31, 2013, as related-party receivables and payables. The total net effect of the settlement of these intercompany transactions, exclusive of those historically settled in cash, is reflected in the condensed combined statements of cash flows as a financing activity and in the condensed combined balance sheets as parent company investment.
International Paper’s debt and the related interest expense have not been allocated to the Company for any of the periods presented because the Company is not the legal obligor of the debt and International Paper’s borrowings were not directly attributable to the Company’s business.
International Paper maintains self-insurance programs at the corporate level. The Company was allocated a portion of the expenses associated with these programs as part of the general corporate overhead expense allocation. No self-insurance reserves have been allocated to the Company as the self-insurance reserves represent obligations of International Paper, which are not transferrable.
International Paper uses a centralized approach to cash management and financing its operations. Transactions between International Paper and the Company are accounted for through parent company investment. Accordingly, none of the cash, cash equivalents, debt or related interest expense at the Parent level has been assigned to the Company in the condensed combined financial statements. Cash and cash equivalents in the condensed combined balance sheets represents cash and cash equivalents held locally by certain of the Company’s entities.
The Company ceased certain of its operations, and where appropriate, these operations have been reflected as discontinued operations in the condensed combined financial statements. See Note 4 for further discussion.
The Company operates on a calendar year-end.
Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of cash, trade accounts receivable, accounts payable, and other components of other current assets and other current liabilities, in which the carrying amount approximates fair value due to the short maturity of these items.
 
F-40

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
1. Basis of Combination (continued)
 
Intangible assets acquired in a business combination are recorded at fair value and the Company reviews indefinite lived intangible assets for impairment by comparing the fair value of the assets, estimated using an income approach, with their carrying value. Additionally when performing annual goodwill impairment testing, the Company estimates the fair value of its reporting units using the projected future cash flows to be generated by each unit over the estimated remaining useful operating lives of the unit’s assets, discounted using the estimated cost of capital for each reporting unit.
The guidance for fair value measurements and disclosures sets out a fair value hierarchy that groups fair value measurement inputs into the following three classifications:
Level 1 – Quoted market prices in active markets for identical assets or liabilities.
Level 2 – Observable market-based inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 – Unobservable inputs for the asset or liability reflecting the reporting entity’s own assumptions or external inputs from inactive markets.
In valuing intangible assets acquired in a business combination as well as in performing annual and interim, if applicable, intangible asset impairment testing the Company utilizes a combination of Level 1, 2, and 3 inputs.
2. Recent Accounting Developments
Income Taxes
In July 2013, the FASB issued ASU 2013-11, Income Taxes , which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This guidance should be applied to all unrealized tax benefits that exist as of the effective date which is fiscal years beginning after December 15, 2013, and interim periods within those years. The application of the requirements of this guidance did not have a material effect on the condensed combined financial statements.
Foreign Currency Matters
In March 2013, the FASB issued ASU 2013-05, Foreign Currency Matters , which provides the standards for parent’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. ASU 2013-05 is effective for reporting periods beginning after December 15, 2013. The application of the requirements of this guidance did not have a material effect on the condensed combined financial statements.
3. Restructuring Charges
During 2010, the Company completed a strategic assessment of its operating model, resulting in the decision to begin on a multi-year restructuring plan. The restructuring plan involved the establishment of a lower cost operating model in connection with the repositioning of the Print segment in consideration of changing market considerations. The restructuring plan included initiatives to: (i) optimize the warehouse network, (ii) improve the efficiency of the sales team and, (iii) reorganize the procurement function. Management launched the plan in 2011.
 
F-41

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
3. Restructuring Charges (continued)
 
The restructuring plan identified locations to be affected and a range of time for specific undertakings. A severance liability was established when positions to be eliminated were identified. Generally severance arrangements were based on years of employee service.
2014
During the three months ended March 31, 2014, the Company did not close any retail or warehouse locations as part of the identified restructuring plan. The Company recorded total restructuring charges of $(0.2) million before taxes and $(0.1) million after taxes. This amount included:

 	  	Before-Tax
Charges	 	 	After-Tax
Charges	 	
 	  	(In Millions)	 	
Facility costs	  	$	0.2	  	 	$	0.1	  	
Severance	  	 	—  	  	 	 	—  	  	
Personnel costs	  	 	0.1	  	 	 	0.1	  	
Accelerated amortization and depreciation	  	 	—  	  	 	 	—  	  	
Professional services	  	 	—  	  	 	 	—  	  	
Gain on sale of fixed assets	  	 	(0.5	) 	 	 	(0.3	) 	
	  	 	 	 	 	 	 	 	
Total	  	$	(0.2	) 	 	$	(0.1	) 	
	  	 	 	 	 	 	 	 	
2013
During the three months ended March 31, 2013, one warehouse was closed as part of the identified restructuring plan. The Company recorded total restructuring charges of $7.1 million before taxes and $4.3 million after taxes. These charges included:

 	  	Before-Tax
Charges	 	 	After-Tax
Charges	 	
 	  	(In Millions)	 	
Facility costs	  	$	2.7	  	 	$	1.6	  	
Severance	  	 	5.7	  	 	 	3.5	  	
Personnel costs	  	 	3.2	  	 	 	2.0	  	
Accelerated amortization and depreciation	  	 	—  	  	 	 	—  	  	
Professional services	  	 	0.7	  	 	 	0.4	  	
Gain on sale of fixed assets	  	 	(5.2	) 	 	 	(3.2	) 	
	  	 	 	 	 	 	 	 	
Total	  	$	7.1	  	 	$	4.3	  	

F-42

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
3. Restructuring Charges (continued)
 
The corresponding liability and activity during the periods presented are detailed in the table below. The restructuring liability is included within non-current liabilities ($1.0 million and $1.9 million at March 31, 2014 and December 31, 2013, respectively) and other accrued liabilities ($3.4 million and $5.8 million at March 31, 2014 and December 31, 2013, respectively) in the condensed combined balance sheets.

 	  	Total	 	
 	  	(In Millions)	 	
Liability at December 31, 2012	  	$	3.8	  	
Additional provision	  	 	44.0	  	
Payments	  	 	(39.7	) 	
Adjustment of prior year’s estimate	  	 	(0.4	) 	
	  	 	 	 	
Liability at December 31, 2013	  	 	7.7	  	
Additional provision	  	 	—  	  	
Payments	  	 	(3.0	) 	
Adjustment of prior year’s estimate	  	 	(0.3	) 	
	  	 	 	 	
Liability at March 31, 2014	  	$	4.4	  	
	  	 	 	 	
4. Discontinued Operations
During 2011, the Company ceased its Canadian operations which provided distribution of printing supplies to Canadian based customers. Additionally, the Company ceased its printing press distribution business which was located in the U.S. Historically, both of these businesses had been included in the Company’s Print segment. As the operations and cash flows of these components have been eliminated from the ongoing operations of the Company and the Company will not have any significant continuing involvement in the operations of the components, these components are included in discontinued operations for all periods presented.
Net sales, income from operations and loss on disposition for discontinued operations are as follows:

 	  	For the Three Months
Ended March 31	 	
 	  	2014	 	 	2013	 	
 	  	(In Millions)	 	
Net sales	  	$	—  	  	 	$	—  	  	
(Loss) income from operations	  	 	(0.1	) 	 	 	0.1	  	
Restructuring and disposal expense (income)	  	 	—  	  	 	 	(0.3	) 	
(Loss) income from discontinued operations, net of income tax benefit of $0 and $0 respectively	  	 	(0.1	) 	 	 	0.2	  	
5. Supplementary Financial Statement Information
Inventories, Net
Inventories are primarily valued at cost as determined by the last-in, first-out method (LIFO). Such valuations are not in excess of market. Elements of cost in inventories include the purchase price invoiced by a supplier, plus inbound freight and related costs, and reduced by estimated volume-based discounts available from certain suppliers.
 
F-43

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
5. Supplementary Financial Statement Information (continued)
 
The Company’s inventories are comprised of finished goods. The last-in, first-out inventory method is used to value the Company’s inventories. Approximately 97% of inventories were valued using this method as of March 31, 2014 and December 31, 2013. If the first-in, first-out method had been used, it would have increased total inventory balances by approximately $72.8 million and $76.6 million at March 31, 2014 and December 31, 2013, respectively. During 2014, the Company incurred a LIFO decrement of $6.0 million.
Other Current Assets
The components of other current assets were as follows at March 31, 2014 and December 31, 2013:

 	  	March 31,
2014	 	  	December 31,
2013	 	
 	  	(In Millions)	 	
Rebates receivable	  	$	16.6	  	  	$	18.4	  	
Prepaid expenses	  	 	6.9	  	  	 	5.6	  	
Other	  	 	2.3	  	  	 	2.3	  	
	  	 	 	 	  	 	 	 	
Other current assets	  	$	25.8	  	  	$	26.3	  	
	  	 	 	 	  	 	 	 	
Assets Held for Sale
As part of the Company’s restructuring activities described in Note 3 certain land, buildings, and improvements have been classified as held for sale within the condensed combined balance sheets as of March 31, 2014 and December 31, 2013, as the Company has committed to a plan to sell the identified assets and the assets are available for immediate sale.
6. Income Taxes
The difference between the Company’s effective tax rate for the first three months ended 2014 and 2013 and the U.S. statutory tax rate of 35% principally related to certain deductions permanently disallowed for tax, the effect of foreign tax rates lower than the U.S. statutory tax rate and the state tax provision.
The Company’s reserve for unrecognized tax benefits approximated $0.6 million (excluding related interest) at both March 31, 2014 and December 31, 2013. Generally, tax years 2002 through 2012 remain open and subject to examination by the relevant tax authorities. In 2013, the Company concluded its federal income tax return examination for the tax years 2006–2009.
As a result of the review, other pending tax audit settlements, and the expiration of statutes of limitation, the Company currently estimates that the amount of unrecognized tax benefits could be reduced by up to $0.3 million during the next twelve months with none of the reduction impacting the Company’s effective tax rate.
7. Commitments and Contingent Liabilities
Guarantees
In connection with sales of property, equipment, and other assets, xpedx commonly makes representations and warranties relating to such assets, and may agree to indemnify buyers with respect to tax and environmental
 
F-44

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
7. Commitments and Contingent Liabilities (continued)
 
liabilities, breaches of representations and warranties, and other matters. Where liabilities for such matters are determined to be probable and subject to reasonable estimation, accrued liabilities are recorded at the time of sale as a cost of the transaction. There were no such guarantees at March 31, 2014 and December 31, 2013.
Legal Proceedings
From time to time the Company is involved in legal proceedings that are incidental to the operation of our business. Some of these proceedings seek remedies relating to product liability, personal injury claims, employment and pension matters, and commercial or contractual disputes, sometimes related to acquisitions. We will continue to defend vigorously against all claims.
Although the ultimate outcome of any legal mater cannot be predicted with certainty, based on present information, including our assessment of the merits of the particular claim, we do not expect that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material adverse effect on our cash flow, results of operations or financial condition.
8. Retirement and Post Retirement Benefit Plans
Certain of the Company’s employees participate in defined benefit pension and other post-employment benefit plans (the Plans) sponsored by International Paper and accounted for by International Paper in accordance with accounting guidance for defined benefit pension and other post-employment benefit plans. The total cost of the Plans is determined by actuarial valuation and the Company receives an allocation of the service cost of the Plans based upon a percent of salaries. The amount of net pension and other post-employment benefit expense attributable to the Company related to these International Paper sponsored plans was $3.9 million and $3.8 million, for the three months ended March 31, 2014 and 2013, respectively, and is reflected within both cost of products sold and selling and administrative expenses in the condensed combined statements of operations and comprehensive income.
The Company also contributes to multiemployer pension plans for certain collective bargaining U.S. employees that are not sponsored by International Paper. The risks of participating in these multiemployer pension plans are different from a single employer plan in the following aspects:
 
 	•	 	Assets contributed to the multiemployer plans by one employer may be used to provide benefits to employees of other participating employers.	
 
 	•	 	If a participating employer ceases contributing to the plan, the unfunded obligations of the plan may be inherited by the remaining participating employers.	
 
 	•	 	If the Company stops participating in the multiemployer plan, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.	
The Company made contributions to the bargaining unit supported multiemployer pension plans of approximately $0.6 million and $0.5 million, for the three months ended March 31, 2014 and 2013, respectively.
9. Incentive Plans
As of March 31, 2014, all equity awards held by employees of the Company were granted under International Paper’s 2009 Incentive Compensation Plan (ICP) or predecessor plans. The ICP authorizes grants of restricted stock, restricted or deferred stock units, performance awards payable in cash or stock upon the attainment of
 
F-45

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
9. Incentive Plans (continued)
 
specified performance goals, dividend equivalents, stock options, stock appreciation rights, other stock-based awards, and cash-based awards at the discretion of the Management Development and Compensation Committee of the Board of Directors (the Committee) that administers the ICP. Restricted stock units were also awarded to certain non-U.S. employees. The following disclosures represent the Company’s portion of such plans.
Performance Share Plan
Under the Performance Share Plan (PSP), contingent awards of International Paper common stock are granted by the Committee. The PSP awards are earned over a three-year period. For the 2010 and 2011 grants, one-fourth of the award is earned during each of the three twelve-month periods, with the final one-fourth portion earned over the full three-year period. Beginning with the 2012 grant, the award is earned evenly over a thirty-six-month period. PSP awards are earned based on the achievement of defined performance rankings of return on investment (ROI) and total shareholder return (TSR) compared to ROI and TSR peer groups of companies. Awards are weighted 75% for ROI and 25% for TSR for all participants except for officers for whom the awards are weighted 50% for ROI and 50% for TSR. The ROI component of the PSP awards is valued at the closing stock price on the day prior to the grant date. As the ROI component contains a performance condition, compensation expense, net of estimated forfeitures, is recorded over the requisite service period based on the most probable number of awards expected to vest. The TSR component of the PSP awards is valued using a Monte Carlo simulation as the TSR component contains a market condition. The Monte Carlo simulation estimates the fair value of the TSR component based on the expected term of the award, a risk-free rate, expected dividends, and the expected volatility for the International Paper and its competitors. The expected term is estimated based on the vesting period of the awards, the risk-free rate is based on the yield on U.S. Treasury securities matching the vesting period, and the volatility is based on the Company’s historical volatility over the expected term.
Beginning with the 2011 PSP, grants are made in performance-based restricted stock units (PSU’s). The PSP will continue to be paid in unrestricted shares of International Paper stock.
The following table sets forth the assumptions used to determine compensation cost for the market condition component of the PSP plan:

 	  	Three Months
Ended
March 31,
2014	 	
Expected volatility	  	 	30.84	% 	
Risk-free interest rate	  	 	0.78	% 	
 
F-46

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
9. Incentive Plans (continued)
 
The following summarizes PSP activity for the three months ended March 31, 2014:

 	  	Shares/
Units	 	 	Weighted-
Average
Grant Date
Fair Value	 	
	  				 	 	(Actual Dollar	)  	
Outstanding at December 31, 2012	  	 	1,093,972	  	 	$	29.28	  	
Granted	  	 	296,888	  	 	 	39.55	  	
Shares issued	  	 	(334,228	) 	 	 	28.93	  	
Forfeited	  	 	(14,844	) 	 	 	39.55	  	
	  	 	 	 	 	 	 	 	
Outstanding at December 31, 2013	  	 	1,041,788	  	 	 	32.21	  	
Granted	  	 	173,776	  	 	 	47.66	  	
Shares issued	  	 	(451,431	) 	 	 	28.04	  	
Forfeited	  	 	(8,689	) 	 	 	47.66	  	
	  	 	 	 	 	 	 	 	
Outstanding at March 31, 2014	  	 	755,444	  	 	$	37.89	  	
	  	 	 	 	 	 	 	 	
Executive Continuity and Restricted Stock Award Programs
The Executive Continuity Award program provides for the granting of tandem awards of restricted stock and/or nonqualified stock options to key executives. Grants are restricted and awards conditioned on attainment of a specified age. The awarding of a tandem stock option results in the cancellation of the related restricted shares.
The service-based Restricted Stock Award program (RSA), designed for recruitment, retention and special recognition purposes, also provides for awards of restricted stock to key employees. Of the outstanding awards at March 31, 2014, 25,000 shares are expected to vest in 2014.
The following summarizes the activity of the Executive Continuity Award program and RSA program for the period ending March 31, 2014:

 	  	Shares/
Units	 	 	Weighted-
Average
Grant Date
Fair Value	 	
 	  	 	 	 	(Actual Dollar)	 	
Outstanding at December 31, 2012	  	 	27,500	  	 	$	34.43	  	
Granted	  				 				
Shares issued	  	 	(2,500	) 	 	 	27.24	  	
	  	 	 	 	 	 	 	 	
Outstanding at December 31, 2013	  	 	25,000	  	 	 	35.15	  	
Granted	  	 	—  	  	 	 	—  	  	
Shares issued	  	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	
Outstanding at March 31, 2014	  	 	25,000	  	 	$	35.15	  	

F-47

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
9. Incentive Plans (continued)
 
Stock-based compensation expense and related income tax benefits were as follows:

 	  	For the Three Months
Ended March 31	 	
 	  	2014	 	  	2013	 	
	  	 	(In Millions)	  	
Total stock-based compensation expense (included in selling and administrative expense)	  	$	1.1	  	  	$	4.3	  	
Income tax benefits related to stock-based compensation	  	$	1.0	  	  	 	—  	  	
At March 31, 2014, $15.5 million of compensation cost, net of estimated forfeitures, related to unvested restricted performance shares, executive continuity awards and restricted stock attributable to future performance had not yet been recognized. This amount will be recognized in expense over a weighted-average period of 2 years.
 
10.	Financial Information by Reportable Segment	
xpedx’s reportable segments, Print, Packaging and Facility Solutions, are consistent with the internal structure used to manage these businesses and the Company’s major product lines.
For management purposes, xpedx reports the operating performance of each segment based on operating profit. Intersegment sales and transfers are recorded at current market prices.
Information by Reportable Segment
Net Sales
The following table presents net sales by reportable segment for the three months ended March 31:

 	  	2014	 	  	2013	 	
 	  	(In Millions)	 	
Print	  	$	736.3	  	  	$	796.3	  	
Packaging	  	 	390.0	  	  	 	384.0	  	
Facility Solutions	  	 	181.1	  	  	 	208.1	  	
Corporate and intersegment sales	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	
Net sales	  	$	1,307.4	  	  	$	1,388.4	  	

F-48

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
10.	Financial Information by Reportable Segment (continued)	
 
Operating Profit
The following table presents operating profit by reportable segment for the three months ended March 31:

 	  	2014	 	 	2013	 	
 	  	(In Millions)	 	
Print	  	$	6.9	  	 	$	8.4	  	
Packaging	  	 	14.1	  	 	 	10.7	  	
Facility Solutions	  	 	(10.2	) 	 	 	(8.1	) 	
	  	 	 	 	 	 	 	 	
Operating profit	  	 	10.8	  	 	 	11.0	  	
Corporate items	  	 	(1.5	) 	 	 	(12.4	) 	
	  	 	 	 	 	 	 	 	
Income (loss) from continuing operations before income taxes	  	$	9.3	  	 	$	(1.4	) 	
	  	 	 	 	 	 	 	 	
Restructuring Charges
The following table presents restructuring charges by reportable segment for the three months ended March 31:

 	  	2014	 	 	2013	 	
 	  	(In Millions)	 	
Print	  	$	(0.1	) 	 	$	1.4	  	
Packaging	  	 	—  	  	 	 	0.4	  	
Facility Solutions	  	 	(0.1	) 	 	 	0.5	  	
Corporate	  	 	—  	  	 	 	4.8	  	
	  	 	 	 	 	 	 	 	
Restructuring charges	  	$	(0.2	) 	 	$	7.1	  	
	  	 	 	 	 	 	 	 	
Assets
The following table presents total assets by reportable segment as of March 31, 2014 and December 31, 2013:

 	  	2014	 	  	2013	 	
 	  	(In Millions)	 	
Print	  	$	588.7	  	  	$	628.5	  	
Packaging	  	 	455.5	  	  	 	418.7	  	
Facility Solutions	  	 	184.6	  	  	 	209.1	  	
Corporate	  	 	3.1	  	  	 	0.6	  	
	  	 	 	 	  	 	 	 	
Assets	  	$	1,231.9	  	  	$	1,256.9	  	

11.	Related-Party Transactions and Parent Company Equity	
Related-Party Sales and Purchases
For the three months ended March 31, 2014 and 2013, the Company sold products to other International Paper businesses in the amount of $12.0 million and $14.0 million, respectively, which is included in net sales in the condensed combined statements of operations and comprehensive income. The Company also purchases
 
F-49

Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
11.	Related-Party Transactions and Parent Company Equity (continued)	
 
inventories from other International Paper businesses. The Company purchased and recognized in cost of products sold inventory from International Paper of $141.6 million $159.6 million for the three months ended March 31, 2014 and 2013, respectively. At March 31, 2014 and December 31, 2013, the aggregate amount of inventories purchased from other International Paper businesses that remained on the Company’s condensed combined balance sheets was $49.3 million and $48.5 million, respectively.
Parent Company Investment
Net transfers (to) from parent are included within parent company equity on the condensed combined balance sheets. All significant intercompany transactions between the Company and International Paper have been included in these condensed combined financial statements and are considered to be effectively settled for cash in the condensed combined financial statements at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the condensed combined statements of cash flows as a financing activity and in the condensed combined balance sheets as Parent company investment. The components of the net transfers to parent for the three months ended March 31, 2014 and March 31, 2013, are as follows:

 	  	2014	 	 	2013	 	
 	  	(In Millions)	 	
Intercompany sales and purchases, net	  	$	128.8	  	 	$	149.4	  	
Cash pooling and general financing activities	  	 	(170.7	) 	 	 	(214.2	) 	
Corporate allocations including income taxes	  	 	13.2	  	 	 	23.5	  	
	  	 	 	 	 	 	 	 	
Total net transfers to parent	  	$	(28.7	) 	 	$	(41.3	) 	
	  	 	 	 	 	 	 	 	
On June 27, 2011, the Company borrowed $15.1 million from the Parent bearing interest at 1.86%. Additionally, on August 31, 2011, the Company separately borrowed $5.1 million from the Parent bearing interest of 3.05 %. There are no covenants with these Promissory Notes and interest is due to the Parent at the maturity date. On December 31, 2013, the Company entered into a General Conveyance Agreement with its Parent whereby the debt was assumed by the Parent effective immediately.
12. The Transactions
On January 28, 2014, International Paper announced that the Company and Unisource Worldwide, Inc. will merge under the terms of a definitive agreement that will result in the creation of a new publicly traded company.
International Paper will indirectly contribute the assets of the Company to a newly formed wholly owned subsidiary, Veritiv Corporation, in exchange for the stock of the subsidiary, a cash payment of approximately $400 million expected to be financed with new debt in the new company’s capital structure, and the potential for an additional cash payment of up to $100 million pursuant to an “earn-out” provision. International Paper will distribute shares of the new company to International Paper shareholders on a pro rata basis in a manner intended to be tax-free to International Paper and its shareholders.
Following the spinoff of the new company to International Paper shareholders, Unisource will immediately merge with and into the new company. In connection with the merger, the shares of Unisource will be converted into a number of shares of the new company such that, following the merger, approximately 51% of the shares of the new public company will be owned by International Paper shareholders, with the remaining approximately 49% of shares held by UWW Holdings, LLC, the holding company that owns Unisource.
 
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Table of Contents
xpedx
(A Business of International Paper Company)
Notes to Condensed Combined Financial Statements (continued)
 
12. The Transactions (continued)
 
To finance the cash payment to International Paper and refinance existing debt of Unisource, the new company has entered into a commitment with three banks for $1.4 billion of asset-backed financing.
 
13.	Subsequent Events	
These combined financial statements reflect management’s evaluation of subsequent events through June 4, 2014, the date the Company’s financial statements were available to be issued.
14. Restatement of Previously Issued Financial Statements
Subsequent to the issuance of the 2013 combined financial statements, management discovered an error related to the deferred tax effect of the LIFO reserve. The Company incorrectly recognized a deferred tax asset instead of a deferred tax liability.
The following are previously reported and restated balances of affected line items in the Combined Balance Sheets as of December 31, 2013 and the Combined Statements of Changes in Parent Company Equity for the year ended December 31, 2013.
Combined Balance Sheets

 	  	As of December 31, 2013	 	
 	  	As
Reported	 	  	Adjustments	 	 	As
Restated	 	
Deferred income tax assets	  	 	55.3	  	  	 	(55.3	) 	 	 	—  	  	
Total current assets	  	 	1,137.3	  	  	 	(55.3	) 	 	 	1,082.0	  	
Total assets	  	 	1,312.2	  	  	 	(55.3	) 	 	 	1,256.9	  	
Deferred income tax liabilities	  	 	—  	  	  	 	13.5	  	 	 	13.5	  	
Total current liabilities	  	 	451.3	  	  	 	13.5	  	 	 	464.8	  	
Total liabilities	  	 	463.8	  	  	 	13.5	  	 	 	477.3	  	
Parent company investment	  	 	853.1	  	  	 	(68.8	) 	 	 	784.3	  	
Total parent company equity	  	 	848.4	  	  	 	(68.8	) 	 	 	779.6	  	
Total liabilities and parent company equity	  	 	1,312.2	  	  	 	(55.3	) 	 	 	1,256.9	  	
Combined Statements of Changes in Parent Company Equity

 	  	Parent Company Investment	 	
 	  	As
Reported	 	 	Adjustments	 	 	As
Restated	 	
Balance, December 31, 2012	  	 	890.3	  	 	 	(71.1	) 	 	 	819.2	  	
Net transfers to parent	  	 	(37.4	) 	 	 	2.3	  	 	 	(35.1	) 	
Balance, December 31, 2013	  	 	853.1	  	 	 	(68.8	) 	 	 	784.3	  	
The Company’s Combined Balance Sheets; Combined Statements of Changes in Parent Company Equity; and Note 10. Financial Information by Reportable Segment, have been restated to correct for this error. This error did not have an impact on the Combined Statements of Operations and Comprehensive Income.
 
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Table of Contents
 Independent Auditor’s Report
To the Board of Directors
UWW Holdings, Inc. and Subsidiaries:
We have audited the accompanying consolidated financial statements of UWW Holdings, Inc. and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2013 and December 29, 2012, and the related consolidated statements of operations, comprehensive income/(loss), changes in redeemable preferred stock and stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2013.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of UWW Holdings, Inc. and its subsidiaries at December 31, 2013 and December 29, 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013 in accordance with accounting principles generally accepted in the United States of America.
/s/ PricewaterhouseCoopers LLP
Atlanta, Georgia
March 28, 2014
 
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Table of Contents
 UWW HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in millions)

 	  	Fiscal years ended	 	
 	  	December 31,
2013	 	 	December 29,
2012	 	 	December 31,
2011	 	
Net sales (including sales to a related party of $31.0, $22.7, $17.0 for fiscal years 2013, 2012 and 2011, respectively)	  	$	4,089.1	  	 	$	4,123.3	  	 	$	4,327.8	  	
Cost of products sold (including purchases from a related party of $205.5, $208.9 and $209.9 for fiscal years 2013, 2012 and 2011, respectively) excluding depreciation and amortization	  	 	3,370.4	  	 	 	3,405.6	  	 	 	3,591.9	  	
Distribution expenses	  	 	250.3	  	 	 	240.0	  	 	 	252.4	  	
Selling and administrative expenses	  	 	391.3	  	 	 	392.9	  	 	 	409.0	  	
Depreciation and amortization	  	 	25.1	  	 	 	25.4	  	 	 	24.5	  	
Restructuring (gains) expenses	  	 	(3.4	) 	 	 	6.6	  	 	 	14.6	  	
Merger expenses	  	 	14.3	  	 	 	—  	  	 	 	—  	  	
Asset impairments	  	 	0.4	  	 	 	4.9	  	 	 	1.0	  	
Other expense, net	  	 	0.5	  	 	 	0.4	  	 	 	1.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	40.2	  	 	 	47.5	  	 	 	32.9	  	
Interest expense, net	  	 	27.4	  	 	 	28.3	  	 	 	66.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income taxes	  	 	12.8	  	 	 	19.2	  	 	 	(33.8	) 	
Income tax expense (benefit)	  	 	(228.5	) 	 	 	15.2	  	 	 	(5.5	) 	
Equity earnings of affiliates, net of taxes	  	 	(1.1	) 	 	 	(1.1	) 	 	 	(1.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	  	 	242.4	  	 	 	5.1	  	 	 	(27.1	) 	
Redeemable preferred stock dividends	  	 	(19.4	) 	 	 	(17.2	) 	 	 	(1.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to common shareholders	  	$	223.0	  	 	$	(12.1	) 	 	$	(28.4	) 	

 
The accompanying notes are an integral part of these consolidated financial statements.
 
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Table of Contents
 UWW HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income/(Loss)
(Dollars in millions)

 	  	Fiscal years ended	 	
 	  	December 31,
2013	 	 	December 29,
2012	 	 	December 31,
2011	 	
Net income (loss)	  	$	242.4	  	 	$	5.1	  	 	$	(27.1	) 	
Other comprehensive income (loss), net of tax:	  				 				 				
Foreign currency translation adjustment	  	 	(5.4	) 	 	 	2.4	  	 	 	(2.2	) 	
Defined benefit pension plans, net of taxes:	  				 				 				
Net pension gain (loss)	  	 	17.3	  	 	 	(3.7	) 	 	 	(18.7	) 	
Prior service credit	  	 	—  	  	 	 	—  	  	 	 	3.1	  	
Amortization of prior service credit	  	 	(0.3	) 	 	 	(0.2	) 	 	 	—  	  	
Amortization of net loss	  	 	3.4	  	 	 	4.1	  	 	 	0.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Defined benefit pension plans	  	 	20.4	  	 	 	0.2	  	 	 	(14.9	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss)	  	 	15.0	  	 	 	2.6	  	 	 	(17.1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income (loss)	  	$	257.4	  	 	$	7.7	  	 	$	(44.2	) 	

 
The accompanying notes are an integral part of these consolidated financial statements.
 
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Table of Contents
 UWW HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in millions, except share amounts)

 	  	December 31,
2013	 	 	December 29,
2012	 	
Assets	  				 				
Current assets:	  				 				
Cash	  	$	22.2	  	 	$	30.6	  	
Accounts receivable, less allowance of $14.6 and $19.6 at 2013 and 2012, respectively	  	 	467.8	  	 	 	471.9	  	
Related-party accounts receivable	  	 	2.8	  	 	 	2.8	  	
Inventories	  	 	314.7	  	 	 	315.2	  	
Deferred income tax assets	  	 	10.2	  	 	 	—  	  	
Other current assets	  	 	52.9	  	 	 	61.7	  	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	870.6	  	 	 	882.2	  	
Property and equipment, net	  	 	76.3	  	 	 	80.2	  	
Goodwill	  	 	23.4	  	 	 	23.4	  	
Other intangibles, net	  	 	20.9	  	 	 	24.3	  	
Deferred income tax assets	  	 	210.0	  	 	 	8.8	  	
Other noncurrent assets	  	 	14.0	  	 	 	20.3	  	
	  	 	 	 	 	 	 	 	
Total assets	  	$	1,215.2	  	 	$	1,039.2	  	
	  	 	 	 	 	 	 	 	
Liabilities, Redeemable preferred stock and Stockholders’ equity	  				 				
Current liabilities:	  				 				
Accounts payable	  	$	227.1	  	 	$	275.0	  	
Related-party accounts payable	  	 	6.7	  	 	 	4.5	  	
Accrued payroll and benefits	  	 	33.0	  	 	 	25.5	  	
Other accrued liabilities	  	 	65.5	  	 	 	68.3	  	
Deferred income tax liabilities	  	 	—  	  	 	 	12.1	  	
Current maturities of long-term debt	  	 	2.7	  	 	 	3.0	  	
Capital lease obligations to related party, current portion	  	 	9.4	  	 	 	8.2	  	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	344.4	  	 	 	396.6	  	
Long-term debt, net of current maturities	  	 	325.4	  	 	 	315.9	  	
Capital lease obligations to related party, less current portion	  	 	45.9	  	 	 	55.7	  	
Defined benefit pension obligations, net	  	 	26.6	  	 	 	57.0	  	
Other noncurrent liabilities	  	 	73.4	  	 	 	53.2	  	
	  	 	 	 	 	 	 	 	
Total liabilities	  	$	815.7	  	 	$	878.4	  	
	  	 	 	 	 	 	 	 	
Commitments and contingencies (Note 9)	  				 				
			
Redeemable preferred stock, $.01 par value per share; 228,465 shares authorized; 228,463 issued and outstanding	  	 	147.7	  	 	 	147.4	  	
			
Stockholders’ equity:	  				 				
Common stock, $.01 par value per share; 33.2 million shares authorized: and 25.8 million shares issued and outstanding	  	 	0.3	  	 	 	0.3	  	
Additional paid-in capital	  	 	311.2	  	 	 	330.2	  	
Accumulated deficit	  	 	(63.4	) 	 	 	(305.8	) 	
Accumulated other comprehensive loss	  	 	4.7	  	 	 	(10.3	) 	
Treasury stock at cost, 90,000 shares of Class B and 10,000 shares of Class M	  	 	(1.0	) 	 	 	(1.0	) 	
	  	 	 	 	 	 	 	 	
Total stockholders’ equity	  	 	251.8	  	 	 	13.4	  	
	  	 	 	 	 	 	 	 	
Total liabilities, redeemable preferred stock and stockholders’ equity	  	$	1,215.2	  	 	$	1,039.2	  	
	  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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Table of Contents
 UWW HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ Equity
(Dollars in millions)

 	 	Redeemable
preferred
stock	 	 	Common stock	 	 	Additional
paid-in capital	 	 	Accumulated
deficit	 	 	Accumulated
other
comprehensive
income (loss)	 	 	Treasury
stock	 	 	Total
Stockholders’
equity	 	
Balance at January 1, 2011	 	$	—  	  	 	$	0.3	  	 	$	275.1	  	 	$	(283.8	) 	 	$	4.2	  	 	$	(1.0	) 	 	$	(5.2	) 	
Compensation from stock awards	 	 	—  	  	 	 	—  	  	 	 	1.3	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	1.3	  	
Noncash capital contributions	 	 	—  	  	 	 	—  	  	 	 	71.6	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	71.6	  	
Redeemable preferred stock issuance	 	 	146.1	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Redeemable preferred stock dividends accretion	 	 	1.3	  	 	 	—  	  	 	 	(1.3	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(1.3	) 	
Net loss	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(27.1	) 	 	 	—  	  	 	 	—  	  	 	 	(27.1	) 	
Other comprehensive loss, net of tax	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(17.1	) 	 	 	—  	  	 	 	(17.1	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2011	 	$	147.4	  	 	$	0.3	  	 	$	346.7	  	 	$	(310.9	) 	 	$	(12.9	) 	 	$	(1.0	) 	 	$	22.2	  	
Compensation from stock awards	 	 	—  	  	 	 	—  	  	 	 	0.7	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.7	  	
Redeemable preferred stock dividends accretion	 	 	17.2	  	 	 	—  	  	 	 	(17.2	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(17.2	) 	
Redeemable preferred stock dividends declared	 	 	(17.2	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Net income	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	5.1	  	 	 	—  	  	 	 	—  	  	 	 	5.1	  	
Other comprehensive income, net of tax	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	2.6	  	 	 	—  	  	 	 	2.6	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 29, 2012	 	$	147.4	  	 	$	0.3	  	 	$	330.2	  	 	$	(305.8	) 	 	$	(10.3	) 	 	$	(1.0	) 	 	$	13.4	  	
Compensation from stock awards	 	 	—  	  	 	 	—  	  	 	 	0.4	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.4	  	
Redeemable preferred stock dividends accretion	 	 	19.4	  	 	 	—  	  	 	 	(19.4	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(19.4	) 	
Redeemable preferred stock dividends declared	 	 	(19.1	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Net income	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	242.4	  	 	 	—  	  	 	 	—  	  	 	 	242.4	  	
Other comprehensive income, net of tax	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	15.0	  	 	 	—  	  	 	 	15.0	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2013	 	$	147.7	  	 	$	0.3	  	 	$	311.2	  	 	$	(63.4	) 	 	$	4.7	  	 	$	(1.0	) 	 	$	251.8	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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Table of Contents
 UWW HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in millions)

 	  	Fiscal years ended	 	
 	  	December 31,
2013	 	 	December 29,
2012	 	 	December 31,
2011	 	
Cash flows from operating activities:	  				 				 				
Net income (loss)	  	$	242.4	  	 	$	5.1	  	 	$	(27.1	) 	
Adjustments to reconcile net income/(loss) to cash provided by operating activities:	  				 				 				
Depreciation and amortization	  	 	25.1	  	 	 	25.4	  	 	 	24.5	  	
Amortization of deferred financing costs	  	 	5.6	  	 	 	5.2	  	 	 	6.9	  	
Interest on PIK notes and Graphic Seller notes	  	 	—  	  	 	 	—  	  	 	 	37.3	  	
Bad debt expense	  	 	3.6	  	 	 	(2.6	) 	 	 	7.7	  	
Deferred income taxes	  	 	(230.3	) 	 	 	16.7	  	 	 	(1.3	) 	
LIFO provision (benefit)	  	 	3.3	  	 	 	(0.4	) 	 	 	1.9	  	
(Gain) Loss on retirement of assets	  	 	(7.2	) 	 	 	(0.2	) 	 	 	—  	  	
Long-lived asset impairment charges	  	 	0.4	  	 	 	4.1	  	 	 	1.0	  	
Goodwill impairment charges	  	 	—  	  	 	 	0.8	  	 	 	—  	  	
Stock option compensation expense	  	 	0.4	  	 	 	0.7	  	 	 	1.3	  	
Undistributed earnings from affiliates	  	 	0.1	  	 	 	(0.1	) 	 	 	(0.3	) 	
Other noncash items, net	  	 	(0.6	) 	 	 	0.7	  	 	 	1.8	  	
Changes in assets and liabilities:	  				 				 				
Accounts receivable	  	 	(5.9	) 	 	 	(2.1	) 	 	 	(15.4	) 	
Related party accounts receivable	  	 	—  	  	 	 	(1.5	) 	 	 	2.9	  	
Inventories	  	 	(8.6	) 	 	 	4.5	  	 	 	8.0	  	
Other current assets	  	 	6.7	  	 	 	1.4	  	 	 	(9.4	) 	
Accounts payable	  	 	(58.4	) 	 	 	(21.6	) 	 	 	7.9	  	
Related party accounts payable	  	 	2.2	  	 	 	(3.9	) 	 	 	1.4	  	
Accrued payroll and benefits	  	 	7.7	  	 	 	(3.3	) 	 	 	(2.0	) 	
Other accrued liabilities	  	 	11.4	  	 	 	(4.9	) 	 	 	(2.0	) 	
Other	  	 	0.6	  	 	 	(5.9	) 	 	 	(4.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash (used in) provided by operating activities	  	 	(1.5	) 	 	 	18.1	  	 	 	40.9	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	  				 				 				
Property and equipment additions	  	 	(15.1	) 	 	 	(24.1	) 	 	 	(15.7	) 	
Leasehold improvement additions	  	 	(2.9	) 	 	 	(2.1	) 	 	 	(6.6	) 	
Proceeds from sales of assets	  	 	7.7	  	 	 	0.3	  	 	 	—  	  	
Business acquisitions, net of cash acquired	  	 	—  	  	 	 	(1.0	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash used in investing activities	  	 	(10.3	) 	 	 	(26.9	) 	 	 	(22.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	  				 				 				
Borrowings under Senior Credit Facility	  	 	3,751.5	  	 	 	3,767.1	  	 	 	4,013.0	  	
Payments under Senior Credit Facility	  	 	(3,752.9	) 	 	 	(3,738.5	) 	 	 	(3,903.8	) 	
Payments under Equipment Capital Lease obligations	  	 	(3.1	) 	 	 	(3.1	) 	 	 	(2.8	) 	
Payments under Real Estate Capital Lease obligations to related party	  	 	(8.6	) 	 	 	(7.0	) 	 	 	(6.0	) 	
Changes in bank overdrafts	  	 	16.7	  	 	 	(23.2	) 	 	 	3.5	  	
Borrowings under other borrowing agreements	  	 	—  	  	 	 	—  	  	 	 	0.5	  	
Payments under other borrowing agreements with a related party	  	 	—  	  	 	 	—  	  	 	 	(110.9	) 	
Deferred financing fees	  	 	—  	  	 	 	—  	  	 	 	(6.8	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash (used in) provided by financing activities	  	 	3.6	  	 	 	(4.7	) 	 	 	(13.3	) 	
Effect of exchange rate changes on cash	  	 	(0.2	) 	 	 	0.2	  	 	 	(0.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net change in cash	  	 	(8.4	) 	 	 	(13.3	) 	 	 	5.0	  	
Cash at beginning of year	  	 	30.6	  	 	 	43.9	  	 	 	38.9	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Cash at end of the year	  	$	22.2	  	 	$	30.6	  	 	$	43.9	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Supplemental cash flow disclosures:	  				 				 				
Cash paid for interest	  	$	20.1	  	 	$	21.3	  	 	$	20.1	  	
Cash (paid) received for income taxes net of refunds received	  	 	(1.7	) 	 	 	(5.1	) 	 	 	(2.3	) 	
Supplemental schedule of noncash investing and financing activities:	  				 				 				
Redeemable preferred stock dividends declared but not paid	  	 	19.1	  	 	 	17.2	  	 	 	—  	  	
Capital lease obligations	  	 	—  	  	 	 	0.9	  	 	 	13.1	  	
Senior Credit Facility transaction fee waiver by a related party	  	 	—  	  	 	 	—  	  	 	 	6.3	  	
Issuance of Redeemable preferred stock to related party	  	 	—  	  	 	 	—  	  	 	 	146.1	  	
Contribution of capital upon Redeemable preferred stock issuance with related party	  	 	—  	  	 	 	—  	  	 	 	65.3	  	
The accompanying notes are an integral part of these consolidated financial statements.
 
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Table of Contents
 UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
(1)	Summary of Significant Accounting Policies	
 
 	(a)	Organization and Basis of Presentation	
UWW Holdings, Inc. (UWWH), a Delaware corporation, is owned approximately 60% by Bain Capital Fund VII, L.P. (Bain) and approximately 40% owned by Georgia-Pacific LLC (GP). Bain acquired (the Acquisition) its interest from GP on November 27, 2002 (the Acquisition Date), which effected a change in the control of UWWH. UWWH and its wholly owned subsidiaries are collectively referred to as “Unisource”.
The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and include the accounts of UWWH and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated from these Consolidated Financial Statements. Investments in entities in which Unisource can exercise significant influence, but does not own a majority equity interest or otherwise control, are accounted for using the equity method and are included in Other noncurrent assets in the Consolidated Balance Sheets.
Prior to fiscal 2013, Unisource’s fiscal year-end was based on the Saturday closest to December 31. On September 25, 2013, Unisource’s Board of Directors approved a change in Unisource’s fiscal year-end to a calendar year-end on a prospective basis beginning in 2013. Consequently, Unisource’s 2013 year-end was changed to December 31, 2013 versus January 4, 2014 under the previous policy. Also, beginning on January 1, 2014, future quarterly reporting periods will be based on calendar months. Throughout these Consolidated Financial Statements and footnotes, references to “fiscal 2013” relate to the 52 weeks ended December 31, 2013, references to “fiscal 2012” relate to the 52 weeks ended December 29, 2012 and references to “fiscal 2011” relate to the 52 weeks ended December 31, 2011.
During 2012, Unisource recorded adjustments to correct errors related to previous reporting periods. The adjustments related to refunds from insurance providers and workers’ compensation reserves. Unisource has recorded the cumulative effect of the adjustments within the Selling and administrative expenses in the December 29, 2012 Consolidated Statement of Operations which resulted in increases of $1.0 million in Pre-tax income and $1.0 million in Net income (loss). Unisource concluded that the impact of the corrections is not material to the Consolidated Financial Statements for the year ended December 29, 2012 nor are the errors material, individually, or in the aggregate, to previous reporting periods. Additionally, Unisource has revised the Statement of Comprehensive Income/(Loss) for all years presented for a classification error amongst line items related to pension. We have evaluated and concluded the revisions to be immaterial for all periods.
 
 	(b)	Nature of Operations	
Unisource is a leading distributor of printing and business paper, packaging supplies and equipment, and facility supplies and equipment primarily in the United States and Canada. Additionally, Unisource has international operations in Europe, Asia and Latin America. These product categories, as a percentage of consolidated Net sales, were as follows:

 	  	2013	 	 	2012	 	 	2011	 	
 	  	(% of net sales)	 	
Print	  	 	54	% 	 	 	57	% 	 	 	58	% 	
Packaging	  	 	28	% 	 	 	26	% 	 	 	24	% 	
Facility supplies	  	 	16	% 	 	 	16	% 	 	 	18	% 	
Other	  	 	2	% 	 	 	1	% 	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	 	100	% 	 	 	100	% 	 	 	100	% 	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Sales in the United States, Canada and other international operations, as a percentage of consolidated Net sales, were as follows:

 	  	2013	 	 	2012	 	 	2011	 	
 	  	(% of net sales)	 	
United States	  	 	78	% 	 	 	77	% 	 	 	73	% 	
Canada	  	 	21	% 	 	 	21	% 	 	 	23	% 	
Other international	  	 	1	% 	 	 	2	% 	 	 	4	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	 	100	% 	 	 	100	% 	 	 	100	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Net assets in the United States, Canada and other international countries were as follows:

 	  	2013	 	  	2012	 	
United States	  	$	304.7	  	  	$	65.5	  	
Canada	  	 	90.5	  	  	 	84.9	  	
Other international	  	 	4.3	  	  	 	10.4	  	
	  	 	 	 	  	 	 	 	
Total	  	$	399.5	  	  	$	160.8	  	
	  	 	 	 	  	 	 	 	
Unisource sells its products to a diverse customer base that includes commercial printing, retail, hospitality, healthcare, governmental, distribution and manufacturing sectors. Credit is generally extended without requiring collateral based on an evaluation of the customer’s credit risks.
Unisource’s suppliers are widely dispersed throughout North America, Asia and Europe.
 
 	(c)	Use of Estimates	
Management makes estimates and assumptions when preparing Consolidated Financial Statements under GAAP that affect Unisource’s reported amounts of assets and liabilities at the dates of the Consolidated Financial Statements, the disclosure of contingent assets and liabilities at the dates of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include revenue recognition, income taxes, allowance for doubtful accounts, inventory reserves, impairment of long-lived assets, impairment of goodwill, contingencies, asset retirement obligations, stock-based compensation, employee benefit plans, self-insurance reserves and the determination of the fair value of Redeemable preferred stock share issuances. These estimates involve judgments with respect to, among other things, future economic factors that are difficult to predict and are beyond management’s control. As a result, actual amounts could differ from these estimates.
 
 	(d)	Revenue Recognition	
Unisource recognizes revenue when persuasive evidence of an agreement exists, delivery has occurred, the price to the buyer is fixed or determinable and collectability is reasonably assured. Delivery is not considered to have occurred until the customer takes title and assumes the risks and rewards of ownership.
Certain revenues are derived from shipments arranged by Unisource made directly from a manufacturer to the customer. Unisource is considered to be a principal to these transactions since it, among other factors, controls pricing and terms with respect to the customer, bears the credit risk of the customer defaulting on payment and is the primary obligor to the manufacturer. Revenues from these sales are
 
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Table of Contents
UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
reported on a gross basis in the Consolidated Statements of Operations and amounted to $1,471.8 million, $1,521.6 million and $1,618.7 million in fiscal 2013, 2012 and 2011, respectively.
Taxes collected from customers which are remitted to governmental authorities are accounted for on a net basis. Accordingly, such taxes are excluded from both net sales and expenses.
Unisource estimates anticipated sales returns by customers in the period in which the sale occurs. The estimated returns are recorded as a reduction of sales and cost of products sold based on historical return rates. The return rates are periodically analyzed and updated to reflect current trends. Any returned product is valued at the lower of cost or net realizable value.
Additionally, Unisource estimates anticipated cash discounts to be taken by customers in the period in which the sale occurs. The estimated discounts are reflected as a reduction of Net sales in the Consolidated Statements of Operations.
 
 	(e)	Purchase Incentives and Customer Rebates	
Unisource enters into agreements with suppliers that allow it to receive rebates, allowances and other discounts based on the attainment of specified purchasing levels or sales to certain customers. Other current assets in the Consolidated Balance Sheets included $35.9 million and $33.7 million at the end of fiscal 2013 and 2012, respectively, of anticipated incentive and rebate amounts not yet received. Purchase incentives are recorded as a reduction in inventory and recognized into cost of products sold as the product is sold.
Unisource enters into similar incentive agreements with its customers, which are generally based on sales to these customers. Unisource records its customers’ estimated attainment of discounts as a reduction of Net sales. Other accrued liabilities in the Consolidated Balance Sheets included $12.0 million and $12.4 million at the end of fiscal 2013 and 2012, respectively, of anticipated incentive and rebate amounts not yet paid. For some incentive agreements, Unisource prepays amounts before the customers earn the incentive. These prepaid incentives amounted to $0.2 million and zero at the end of fiscal 2013 and 2012, respectively, and are recorded in Other current assets in the Consolidated Balance Sheets.
 
 	(f)	Distribution Expense	
Distribution expense consists primarily of storage and related facility costs (excluding depreciation charges), shipping and handling, freight and supply chain management costs. Total shipping and handling expenses were $168.7 million, $160.5 million and $174.4 million in fiscal 2013, 2012 and 2011, respectively, and are included in Distribution expenses in the Consolidated Statements of Operations.
 
 	(g)	Merger Expenses	
Merger expenses consist primarily of third party professional service fees related to the proposed merger (the Merger) with xpedx, the business-to-business distribution business of International Paper.
 
 	(h)	Advertising	
Advertising costs are charged to expense as incurred and consist primarily of purchases of advertising, trade publications, sales collateral and website promotions. Such costs were approximately $2.1 million, $3.3 million and $1.4 million in fiscal 2013, 2012 and 2011, respectively, and are recorded in Selling and administrative expenses in the Consolidated Statements of Operations.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	(i)	Stock-Based Compensation	
Unisource records compensation expense related to stock options issued to employees. These options are measured and recorded in the Consolidated Financial Statements based on the grant date fair value of the instrument, which is determined using the Black-Scholes option-pricing model. Compensation expense is recognized over the period in which the employee provides service, which is typically the vesting period.
 
 	(j)	Income Taxes	
Unisource recognizes deferred income taxes based on the expected future tax consequences of differences in financial reporting and income tax reporting for operating results, assets and liabilities. Deferred income taxes are determined using enacted tax rates for the applicable future period.
Unisource regularly reviews its deferred tax assets for recoverability and establishes a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. Projected future taxable income is based on Unisource’s expected results and assumptions as to the jurisdiction in which the income will be earned. The expected timing of the reversals of existing temporary differences is based on current tax law and Unisource’s tax methods of accounting.
Unisource recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Consolidated Financial Statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized as part of the provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law until such time that the related tax benefits are recognized.
 
 	(k)	Cash	
Unisource maintains cash accounts at several banks. Accounts at each institution are insured according to Federal Deposit Insurance Corporation (FDIC) regulations; however, most of the cash balances were in excess of FDIC insured limits as of December 31, 2013 and December 29, 2012, respectively.
Book overdrafts of $34.6 million and $94.1 million as of December 31, 2013 and December 29, 2012, respectively, represent checks issued that have not been presented for payment to the banks and are classified as Accounts payable in the Consolidated Balance Sheets. Unisource funds daily outstanding checks, which are presented to its banks, through transfers made under its Senior Credit Facility. The funding of these overdrafts is at the direction of Unisource. Bank overdrafts in Canada represent legal draws on the Canadian portion of the Senior Credit Facility (Refer to Note 7, Long-term Debt), and are therefore considered borrowings under the Senior Credit Facility, and are classified as financing activities in the Consolidated Statements of Cash Flows.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	(l)	Accounts Receivable	
Accounts receivable are recognized as revenues are earned, recorded at the invoiced amount net of estimated discounts, and do not bear interest. Amounts due from customers are regularly reviewed, and an allowance for doubtful accounts is established for Unisource’s estimate of probable losses from existing customer balances. These estimates require consideration of historical loss experience, adjusted for current conditions, trends in customer payment frequency, third party and internal customer risk ratings and management judgments about the financial health of specific customers.
The allowance is inclusive of credit risks, returns, cash discounts and any other items affecting the realization of these assets. The allowance for doubtful accounts was $14.6 million and $19.6 million at the end of fiscal 2013 and 2012, respectively. Receivables are written off and deducted from the allowance account when the receivables are deemed uncollectible.
 
 	(m)	Inventories	
Inventory cost components include the purchase price invoiced by a supplier, plus inbound freight and related costs, and are reduced by estimated volume-based discounts available from certain suppliers. Inventories consist principally of goods purchased for resale (finished goods) and are valued at the lower of cost or market. Cost is determined using the last-in, first-out (LIFO) method for U.S. inventories, which represented 71% of total reported inventories at the end of fiscal 2013 and 69% at the end of fiscal 2012. Cost is determined using the weighted average method for non-U.S. inventories. If the average cost method (at lower of cost or market) had been used to value U.S. inventories, cost would have been $36.5 million and $33.2 million higher than the LIFO cost at the end of fiscal 2013 and 2012, respectively. Unisource’s base LIFO layer is from 2002.
 
 	(n)	Property and Equipment	
Property and equipment costs consist principally of land, buildings, leasehold improvements, machinery, equipment and internal-use software. Property and equipment includes certain assets accounted for as capital leases.
Additions to property and equipment are recorded at cost. When assets are disposed or retired, the remaining book value, minus any proceeds, is recognized as a gain or loss and included in Other expense, net in the Consolidated Statements of Operations, and the associated asset cost and accumulated depreciation are removed from the Consolidated Balance Sheets. Replacements of minor items along with maintenance and repair costs that do not extend the useful life of the asset are expensed as incurred and included in either Distribution expenses or Selling and administrative expenses, as applicable, in the Consolidated Statements of Operations.
Depreciation of property and equipment is provided using the straight-line method over the estimated useful lives of the related assets. Useful lives are typically up to 10 years for buildings and improvements and up to 15 years for machinery and equipment. Depreciation includes depreciation of capital-leased assets and amortization of leasehold improvements which is recorded over the shorter of the remaining lease term or the economic lives of the leased assets, using the straight-line method. Depreciation of capital-leased assets is reflected in Depreciation and amortization in the Consolidated Statements of Operations.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	(o)	Capitalized Interest	
Interest cost incurred during the period of time required to bring an asset to the condition and location necessary for its intended use is considered part of the historical cost of acquiring the asset. Accordingly, capitalized interest is treated as an addition to property and equipment and is depreciated over the life of the related asset.
 
 	(p)	Internal-Use Software	
Internal-use software costs incurred during the application development stage are capitalized as incurred. The application development stage does not begin until technological feasibility is established and all research and development activities for the other components of the product or process are completed. Costs related to the development of internal-use software, other than those incurred during the application development stage, are expensed as incurred. Capitalized internal-use software costs are amortized over 3 to 5 years using the straight-line method. Amortization of internal-use software is reflected in Depreciation and amortization in the Consolidated Statements of Operations.
 
 	(q)	Impairment of Long Lived Assets	
For purposes of testing impairment of long-lived assets such as property and equipment and customer lists, Unisource evaluates whether events or changes in circumstances indicate that the carrying amount may not be recoverable. Triggering events include a significant change in the extent or manner in which long-lived assets are being used or in their physical condition, legal factors, management decisions regarding the use of the asset, or changes in the business climate that could affect the value of the long-lived assets.
Upon the occurrence of a triggering event, the carrying amount of a long-lived asset is reviewed to assess whether the recoverable amount has declined below its carrying amount. The recoverable amount is based on the estimated net undiscounted future cash flows that Unisource expects to recover from the asset. In situations where the recoverable amount of the long-lived asset is less than the carrying value, an impairment loss is recognized to write down the asset to its fair value which is based on discounted estimated cash flows from the future use of the asset.
 
 	(r)	Goodwill and Indefinite-Lived Intangibles	
Unisource tests goodwill and indefinite-lived intangibles for impairment annually on the first business day of the fourth quarter.
For purposes of testing the impairment of indefinite-lived tradenames, Unisource calculates the fair value based on management assumptions, including an estimate of future cash flows (income approach) which are discounted based on the estimated market participant weighted average cost of capital. This approach was determined to be the most representative measure because Unisource does not have an active market for its equity or debt. An impairment loss is recognized to the extent the carrying amounts of indefinite-lived trade names exceed their fair values.
Unisource tests goodwill for impairment at the reporting unit level annually, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value. When testing goodwill for impairment, Unisource may first assess qualitative factors. The qualitative impairment test includes considering various factors
 
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Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
including macroeconomic conditions, industry and market conditions, cost factors and any reporting unit specific events. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, an additional two-step quantitative testing is performed. Unisource may also elect to proceed directly to the two-step impairment test without considering such qualitative factors. If the quantitative testing indicates that goodwill is impaired, the carrying value of goodwill is written down to fair value. Unisource primarily utilizes a discounted cash flow methodology to calculate the fair value of its reporting units based on forecasts of future operating results and cash flows. An impairment loss is recognized to the extent the carrying amount of a reporting unit’s goodwill exceeds its implied fair value.
 
 	(s)	Deferred Compensation	
Unisource maintains deferred compensation obligations for certain employees from its past acquisitions. Unisource has agreed to pay these employees deferred compensation in return for services rendered prior to their retirement. In general, the payout terms vary for each employee agreement and are paid in monthly or annual installments ranging from 5 years to 15 years from the date of eligibility. For one of the plans, Unisource is indemnified by GP for certain deferred compensation payments. Unisource estimated the present value of the deferred compensation payment obligations at the Acquisition Date by using market-based discount rates.
The deferred compensation liabilities at December 31, 2013 and December 29, 2012 were $20.5 million and $22.2 million, respectively. The current liability portion of the deferred compensation obligations was $2.6 million and $3.1 million at December 31, 2013 and December 29, 2012, respectively. The remaining portion of the obligations is recorded in Other noncurrent liabilities in the Consolidated Balance Sheets.
 
 	(t)	Self-Insurance	
Unisource is self-insured up to certain limits for workers’ compensation costs, automobile and general liability claims and employee medical benefits. Unisource has purchased stop-loss coverage to limit its exposure to significant individual workers’ compensation, automobile, general liability and employee medical claims. Self-insured losses are accrued for known and incurred but not reported claims based upon certain actuarial assumptions and historical claim payment patterns. The aggregate liabilities at December 31, 2013 and December 29, 2012 for self-insurance obligations were $7.6 million and $8.6 million, respectively, on an undiscounted basis. Of this amount, $2.3 million and $2.5 million were recorded in Other noncurrent liabilities, with the remainder recorded in Other accrued liabilities in the Consolidated Balance Sheets.
 
 	(u)	Foreign Currency	
Amounts for foreign subsidiaries and branches whose functional currency is other than the U.S. dollar are translated into U.S. dollars using exchange rates for balance sheet amounts as of the applicable balance sheet date and using average exchange rates during the applicable period for the results of operations. Foreign currency gains and losses from the conversion of intercompany balances that are not considered to be permanent in nature are recorded in the Consolidated Statements of Operations. Other gains and losses arising from the translation of the Consolidated Financial Statements of foreign operations are deferred and recognized as a separate component of Stockholders’ equity. Deferred
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
income taxes are not provided in currency translation adjustments as foreign earnings are considered to be permanently reinvested. Unisource did not repatriate any earnings related to the American Jobs Creation Act of 2004. Transactional currency gains or losses are recorded in the Consolidated Statements of Operations as gain or loss in foreign currency transactions within Cost of products sold or Other expense, net. Unisource recorded net foreign currency transactional (gains)/losses for fiscal 2013, 2012 and 2011 as shown below:

 	  	2013	 	  	2012	 	 	2011	 	
Cost of products sold	  	$	1.2	  	  	$	(0.7	) 	 	$	(0.5	) 	
Other expense, net	  	 	0.5	  	  	 	0.4	  	 	 	1.5	  	
	  	 	 	 	  	 	 	 	 	 	 	 	
Transactional (gain) loss	  	$	1.7	  	  	$	(0.3	) 	 	$	1.0	  	

 	(v)	Fair Value of Financial Instruments	
Unisource’s financial instruments consist primarily of cash, accounts receivable, accounts payable, borrowings under the Senior Credit Facility, capital lease obligations and other components of other current assets and other current liabilities, in which the carrying amount approximates its fair value due to the short maturity of these items.
 
 	(w)	Fair Value Measurements	
The various inputs used to measure assets and liabilities at fair value establish a hierarchy that distinguishes between assumptions based on market data (observable inputs) and Unisource’s assumptions (unobservable inputs). The hierarchy consists of three broad levels as follows:
Level 1 – Quoted market prices in active markets for identical assets or liabilities.
Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs developed using Unisource’s estimates and assumptions, which reflect those that market participants would use.
Unisource’s assets and liabilities measured at fair value are classified in the fair value hierarchy, as described above, based on the inputs used for valuation.
Pension plan assets are primarily comprised of mutual funds and pooled funds. The underlying investments of these funds are valued using either quoted prices in active markets or valued as of the most recent trade date and are classified as Level 2. The carrying value of borrowings under the Senior Credit Facility approximates fair value since the underlying borrowings bear floating market interest rates and have original terms of no more than three months. The fair value of borrowings under the Senior Credit Facility is estimated using quoted market prices for similar instruments in active markets, or on the current rates offered for debt of similar maturities, and are therefore classified as Level 2 of the hierarchy.
As described in Note 10, Redeemable Preferred Stock, Unisource issued long-term debt obligations (PIK notes) at the Acquisition Date to GP which were extinguished during fiscal year 2011 by a cash payment and the issuance of Redeemable preferred stock, which was recorded at fair value, Level 3, using a discounted cash flow approach.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	(x)	New Accounting Pronouncements and Recently Adopted Accounting Standards	
In July 2012, the FASB issued ASU 2012-02, “ Testing Indefinite-Lived Intangible Assets for Impairment , ” which amends ASC 350, “ Intangibles—Goodwill and Other ” . This ASU gives an entity the option to first assess qualitative factors if it is more likely than not that the fair value of indefinite-lived intangible assets are less than their carrying amount. If that assessment indicates no impairment, the quantitative impairment test is not required. This amendment was effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The application of the requirements of this guidance was adopted by Unisource as of December 29, 2012 and the adoption did not have an impact on the Consolidated Financial Statements.
In February 2013, the FASB issued ASU 2013-02, “ Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, ” which adds new disclosure requirements for items reclassified out of Accumulated other comprehensive income (loss). This guidance was effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. Unisource adopted ASU 2013-2 prospectively as of December 30, 2012 and the adoption did not have an impact on the Consolidated Financial Statements.
In July 2013, the FASB also issued ASU 2013-11, “Income Taxes,” which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carry forward, a similar tax loss or a tax credit carry forward exists. This guidance is applied to all unrealized tax benefits that exist as of the effective date which is fiscal years beginning after December 15, 2013, and interim periods within those years. Unisource plans to adopt ASU 2013-11 prospectively as of January 1, 2014, and is currently evaluating the impact, if any, that this ASU will have on its Consolidated Financial Statements.
 
 	(y)	Accounting Standards Issued But Not Effective	
Other accounting pronouncements issued, but not effective until after December 31, 2013, are not expected to have a significant impact on Unisource’s Consolidated Financial Statements.
 
(2)	Restructuring (Gains) Expenses	
During fiscal 2013, 2012 and 2011, Unisource developed and implemented a series of restructuring programs which were established primarily to lower the cost of its operating model and to reposition Unisource’s sales model to respond to the continued secular decline in the paper market. These restructuring initiatives have primarily included: (i) reorganization and restructuring of the sales teams, sales management and sales support functions, (ii) restructuring of unprofitable service offerings and locations, (iii) centralization of back-office functions, and (iv) closures and consolidations of certain facilities.
The following table presents the components of Restructuring (gains) expenses in the Consolidated Statements of Operations:

 	  	2013	 	 	2012	 	  	2011	 	
Severance and personnel costs	  	$	1.9	  	 	$	5.7	  	  	$	13.4	  	
Professional fees and other costs	  	 	1.2	  	 	 	0.8	  	  	 	1.2	  	
Facility closure and consolidation costs	  	 	1.1	  	 	 	0.1	  	  	 	—  	  	
Gains on facility sales/lease termination	  	 	(7.6	) 	 	 	—  	  	  	 	—  	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Total Restructuring (gains) expenses	  	$	(3.4	) 	 	$	6.6	  	  	$	14.6	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	(a)	North American Shared Service Model	
Over the past several years, Unisource has been working to implement a North American shared service model with the goal of improving profitability and streamlining processes. This initiative involves the consolidation and centralization of sales management, sales operations, supply chain operations, customer service and corporate support functions. Efforts to implement this initiative include restructuring of the workforce, information technology infrastructure and business processes and is currently ongoing.
The Restructuring (gains) expenses of $3.2 million, $6.6 million and $12.0 million in fiscal 2013, 2012 and 2011, respectively, include severance and other personnel costs of $1.6 million, $5.7 million and $11.5 million in fiscal 2013, 2012 and 2011, respectively. Positions totaling 60, 99 and 197 were eliminated in fiscal 2013, 2012 and 2011, respectively.
Additionally, Unisource recognized a $7.6 million gain related to the closure of 4 facilities in connection with the North American shared service model plan. During the first quarter of 2013, Unisource recognized a $0.2 million gain upon the execution of an early surrender agreement to terminate the lease for its Mobile, Alabama warehouse. During the fourth quarter of 2013, Unisource recognized a $6.5 million gain on the sale of its Richmond Hill, Ontario, Canada facility to consolidate its warehouses in the greater Toronto area. Also during the fourth quarter of 2013, Unisource completed the sale of its warehouse in Bangor, Maine and cottage in Montebello, Quebec, Canada and recorded gains of $0.6 million and $0.3 million, respectively.
The following table presents the restructuring accrual activity related to the North American shared service model:

 	  	Severance and
Personnel Costs	 	 	Professional
Fees and
Other Costs	 	 	Facility
Closure and
Consolidation
Costs	 	 	Total	 	
Balance as of January 1, 2011	  	$	2.7	  	 	$	—  	  	 	$	—  	  	 	$	2.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charges	  	 	11.5	  	 	 	0.5	  	 	 	—  	  	 	 	12.0	  	
Cash payments	  	 	(6.9	) 	 	 	(0.5	) 	 	 	—  	  	 	 	(7.4	) 	
Foreign currency translation	  	 	(0.1	) 	 	 	—  	  	 	 	—  	  	 	 	(0.1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2011	  	 	7.2	  	 	 	—  	  	 	 	—  	  	 	 	7.2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charges	  	 	5.7	  	 	 	0.8	  	 	 	0.1	  	 	 	6.6	  	
Cash payments	  	 	(8.4	) 	 	 	(0.7	) 	 	 	(0.1	) 	 	 	(9.2	) 	
Non cash reductions	  	 	(1.2	) 	 	 	—  	  	 	 	—  	  	 	 	(1.2	) 	
Foreign currency translation	  	 	0.1	  	 	 	—  	  	 	 	—  	  	 	 	0.1	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 29, 2012	  	 	3.4	  	 	 	0.1	  	 	 	—  	  	 	 	3.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charges	  	 	1.6	  	 	 	1.2	  	 	 	0.4	  	 	 	3.2	  	
Cash payments	  	 	(4.0	) 	 	 	(1.3	) 	 	 	(0.4	) 	 	 	(5.7	) 	
Non cash (reductions)/additions	  	 	(0.4	) 	 	 	—  	  	 	 	—  	  	 	 	(0.4	) 	
Foreign currency translation	  	 	(0.1	) 	 	 	—  	  	 	 	—  	  	 	 	(0.1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2013	  	$	0.5	  	 	$	—  	  	 	$	—  	  	 	$	0.5	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	(b)	Sweden Operations Closure	
During 2013, Unisource closed its Sweden operations which had been planned for future packaging manufacturing and research and development. This initiative was substantially completed in the third quarter of 2013. The restructuring charge of $1.0 million in fiscal 2013 includes personnel costs of $0.3 million and the elimination of 8 positions.
The following table presents the restructuring accrual activity related to the Sweden operations restructuring:

 	  	Personnel Costs	 	 	Facility
Closure and
Consolidation
Costs	 	 	Total	 	
Balance at December 29, 2012	  	$	—  	  	 	$	—  	  	 	$	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Restructuring Charges	  	 	0.3	  	 	 	0.7	  	 	 	1.0	  	
Cash Payments	  	 	(0.3	) 	 	 	(0.8	) 	 	 	(1.1	) 	
Non-cash adjustments	  	 	—  	  	 	 	0.1	  	 	 	0.1	  	
Foreign currency translation	  	 	—  	  	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2013	  	$	—  	  	 	$	—  	  	 	$	—  	  	

 	(c)	U.S. Sales Reorganization	
Starting in the first quarter of 2010, Unisource initiated a restructuring and reorganizing of the U.S. sales organization in order to improve profitability. The initiative included reorganization of the sales teams, sales management and sales support functions. This program was finalized in the third quarter of 2011.
The restructuring charge of $0.9 million in 2011 was primarily severance and other personnel costs and included the elimination of 43 positions in 2011.
The following table presents the restructuring accrual activity related to the U.S. sales reorganization initiative:

 	  	Severance and
Personnel Costs	 	
Balance as of January 1, 2011	  	$	0.6	  	
	  	 	 	 	
Restructuring charges	  	 	0.9	  	
Cash payments	  	 	(1.4	) 	
Non cash reductions	  	 	—  	  	
Foreign currency translation	  	 	—  	  	
	  	 	 	 	
Balance as of December 31, 2011	  	 	0.1	  	
	  	 	 	 	
Restructuring charges	  	 	—  	  	
Cash payments	  	 	(0.1	) 	
Non cash reductions	  	 	—  	  	
Foreign currency translation	  	 	—  	  	
	  	 	 	 	
Balance as of December 29, 2012	  	$	—  	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	(d)	Canada Sales Reorganization	
In May 2010, Unisource announced its plan to consolidate its Canadian selling and operating territories from four regions into three regions. The initiative included reorganization of the regional support functions and sales organization. This program was substantially completed in the fourth quarter of 2010.
The following table presents the restructuring accrual activity related to the Canada sales reorganization initiative:

 	  	Severance and
Personnel Costs	 	
Balance as of January 1, 2011	  	$	0.8	  	
	  	 	 	 	
Restructuring charges	  	 	0.1	  	
Cash payments	  	 	(0.7	) 	
Non cash reductions	  	 	—  	  	
Foreign currency translation	  	 	—  	  	
	  	 	 	 	
Balance as of December 31, 2011	  	 	0.2	  	
	  	 	 	 	
Restructuring charges	  	 	—  	  	
Cash payments	  	 	(0.2	) 	
Non cash reductions	  	 	—  	  	
Foreign currency translation	  	 	—  	  	
	  	 	 	 	
Balance as of December 29, 2012	  	$	—  	  	

 	(e)	Cold Chain Storage	
In the second quarter of 2011, Unisource decided to exit its Canadian cold chain service offering. This initiative included the reorganization of certain support functions and the elimination of cold chain delivery and handling equipment. This initiative was completed in the fourth quarter of 2011.
The restructuring charge of $1.6 million in 2011 includes severance and other personnel costs of $0.9 million related to the elimination of 124 positions.
The following table presents the restructuring accrual activity related to the cold chain initiative:

 	  	Severance and
Personnel Costs	 	 	Contract
Termination and
Other Costs	 	 	Total	 	
Balance as of January 1, 2011	  	$	—  	  	 	$	—  	  	 	$	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charges	  	 	0.9	  	 	 	0.7	  	 	 	1.6	  	
Cash payments	  	 	(0.9	) 	 	 	(0.4	) 	 	 	(1.3	) 	
Non cash reductions	  	 	—  	  	 	 	(0.3	) 	 	 	(0.3	) 	
Foreign currency translation	  	 	—  	  	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2011	  	$	—  	  	 	$	—  	  	 	$	—  	  	

 	(f)	Restructuring Obligation Summary	
The remaining restructuring obligations aggregate to $0.5 million at December 31, 2013, the majority of which is expected to be spent in cash within one year.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

(3)	Property and Equipment	
Property and equipment at the end of fiscal 2013 and 2012 were as follows:

 	  	Range of life	  	2013	 	 	2012	 	
Machinery and equipment	  	4-15 Years	  	$	80.4	  	 	$	76.5	  	
Internal-use software	  	3-5 Years	  	 	49.5	  	 	 	44.3	  	
Land, buildings and improvements	  	8-10 Years	  	 	34.2	  	 	 	31.9	  	
Construction in progress	  	N/A	  	 	13.2	  	 	 	10.8	  	
	  		  	 	 	 	 	 	 	 	
	  		  	 	177.3	  	 	 	163.5	  	
				
Accumulated depreciation	  		  	 	(101.0	) 	 	 	(83.3	) 	
	  		  	 	 	 	 	 	 	 	
Property and equipment, net	  		  	$	76.3	  	 	$	80.2	  	
	  		  	 	 	 	 	 	 	 	
Depreciation expense for Property and equipment was $21.9 million, $22.2 million and $21.3 million for fiscal 2013, 2012 and 2011, respectively.
During the fourth quarter of fiscal 2013, Unisource sold its Richmond Hill, Ontario, Canada distribution facility, which at the time of the sale had a net carrying value of $0.1 million, and received net proceeds of $6.6 million. In connection with the real estate sale, Unisource recorded a gain on the sale of real estate of $6.5 million which was recorded in Restructuring (gains) expenses in the fiscal 2013 Consolidated Statements of Operations.
Additionally during the fourth quarter of 2013, Unisource completed the sale of its warehouse in Bangor, Maine and cottage in Montebello, Quebec, Canada. Net proceeds were $0.6 million and $0.3 million for the Bangor and Montebello properties, respectively. Unisource recorded gains on the sale of the Bangor and Montebello properties of $0.6 million and $0.3 million, respectively, in Restructuring (gains) expenses in the Consolidated Statements of Operations.
 
 	(a)	Internal-Use Software	
Amortization of internal-use software costs of $8.1 million, $10.4 million and $11.4 million for fiscal 2013, 2012 and 2011, respectively, has been included in Depreciation and amortization in the Consolidated Statements of Operations.
Unamortized internal-use software costs, including amounts recorded in construction in progress, were $16.1 million and $17.2 million and are included in Property and equipment, net in the Consolidated Balance Sheets as of December 31, 2013 and December 29, 2012, respectively.
 
 	(b)	Capital Leases	
Capital leases at the end of fiscal 2013 and 2012 were as follows:

 	  	2013	 	 	2012	 	
Gross amounts of assets recorded under capital leases	  	$	18.4	  	 	$	19.9	  	
Accumulated depreciation on capital lease assets	  	 	(8.9	) 	 	 	(7.7	) 	
	  	 	 	 	 	 	 	 	
Net book value of capital lease assets	  	$	9.5	  	 	$	12.2	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Depreciation of capital-leased assets of $3.1 million, $3.7 million and $3.4 million for fiscal 2013, 2012 and 2011, respectively, is included in Depreciation and amortization in the Consolidated Statements of Operations.
 
 	(c)	Impairment	
During fiscal 2013, Unisource recognized a $0.3 million impairment primarily related to the write-off of leasehold improvements upon the early termination of a lease and the discontinued use of capitalized software and equipment.
In 2012, Unisource impaired long-lived assets with net book value of $3.1 million for cold storage assets located at three of its Canadian facilities. The net book value of cold storage assets was written down to zero based on management’s decision not to pursue this line of business and the conclusion that such assets did not have an alternative use. The resulting impairment was included in Asset impairments in the Consolidated Statements of Operations.
Also in 2012, Unisource impaired $1.0 million of packaging manufacturing and related equipment, and this write down was included in Asset impairments in the Consolidated Statements of Operations.
There was no impairment of Property and equipment during fiscal 2011.
 
(4)	Intangible Assets	
 
 	(a)	Goodwill	
Goodwill reflects the excess of consideration paid over the estimated fair value of net identifiable assets acquired in a business combination.
During fiscal 2013, the result of the first step of the goodwill impairment analysis indicated that the fair value of the Graphic Communications (Graphic) reporting unit exceeded the carrying value and therefore, no impairment was necessary.
During fiscal 2012, Unisource performed the step-one analysis for the Unisource Canada goodwill and concluded that the reporting unit’s carrying value exceeded its fair value. Accordingly, Unisource performed the second step of the impairment test to determine the implied fair value of goodwill for the Unisource Canada reporting unit, which required an allocation of the fair value of the reporting unit determined in step-one to all of the assets and liabilities, including any unrecognized intangible assets. Step two of the goodwill impairment test utilized significant unobservable inputs that caused the determination of the implied fair value of goodwill to fall within level three of the GAAP fair value hierarchy. Due to deterioration in anticipated future cash flows for Unisource Canada, Unisource determined that the implied fair value of goodwill in this reporting unit was zero. As a result, in 2012 Unisource impaired all of the goodwill in the Unisource Canada reporting unit and recorded a $0.8 million impairment loss which is included in Asset impairments in the Consolidated Statements of Operations.
There were no goodwill impairment losses recorded for fiscal year 2011.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Goodwill at the end of fiscal 2013 and 2012 was as follows:

 	  	2013	 	
 	  	Gross
Carrying
Amount	 	  	Loss on
Impairments	 	 	Currency
Translation
Adjustment	 	  	Net	 	
Graphic	  	$	23.4	  	  	$	—  	  	 	$	—  	  	  	$	23.4	  	

 	  	2012	 	
 	  	Gross
Carrying
Amount	 	  	Loss on
Impairments	 	 	Currency
Translation
Adjustment	 	  	Net	 	
Graphic	  	$	23.4	  	  	$	—  	  	 	$	—  	  	  	$	23.4	  	
Unisource Canada	  	 	0.8	  	  	 	(0.8	) 	 	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	$	24.2	  	  	$	(0.8	) 	 	$	—  	  	  	$	23.4	  	

 	(b)	Customer Relationships and Trade Names	
Customer relationships (finite lived intangible) and trade names (indefinite lived intangibles) for Graphic arose during fiscal 2004 when adjustments were made to allocate to the Graphic customer relationships and trade names from the amount previously reported as goodwill at January 3, 2004. Customer relationships and trade names for Unisource Canada arose in 2009 when Unisource Canada purchased certain assets and liabilities of Mondrian Hall.
Customer relationships are amortized over a weighted average period of 14 years. Amortization of Graphic customer relationships will be approximately $3.2 million per year for fiscal years 2014 through 2018. In 2011, a loss on impairment of $0.4 million and $0.6 million related to customer relationships and trade names, respectively, was recorded when Unisource announced a plan to discontinue the Mondrian Hall trade name which triggered an impairment of the Mondrian Hall trade name and customer relationships. Those charges were included in Asset impairments in the Consolidated Statements of Operations for 2011 and resulted in these asset balances being written down to zero as of December 31, 2011.
Other intangible assets at the end of fiscal 2013 and 2012 were as follows:

 	  	2013	 	
 	  	Gross
carrying
amount	 	  	Accumulated
amortization	 	 	Cumulative
loss on
Impairments	 	 	Currency
translation
adjustment	 	 	Net	 	
Customer relationships	  	$	45.2	  	  	$	(31.9	) 	 	$	(0.4	) 	 	$	(0.2	) 	 	$	12.7	  	
Trade names	  	 	8.8	  	  	 	—  	  	 	 	(0.6	) 	 	 	—  	  	 	 	8.2	  	
Licensing agreement	  	 	0.2	  	  	 	(0.1	) 	 	 	(0.1	) 	 	 	—  	  	 	 	—  	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	  	$	54.2	  	  	$	(32.0	) 	 	$	(1.1	) 	 	$	(0.2	) 	 	$	20.9	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

																					
 	  	2012	 	
 	  	Gross
carrying
amount	 	  	Accumulated
amortization	 	 	Cumulative
loss on
Impairments	 	 	Currency
translation
adjustment	 	 	Net	 	
Customer relationships	  	$	45.2	  	  	$	(28.8	) 	 	$	(0.4	) 	 	$	(0.1	) 	 	$	15.9	  	
Trade names	  	 	8.8	  	  	 	—  	  	 	 	(0.6	) 	 	 	—  	  	 	 	8.2	  	
Licensing agreement	  	 	0.2	  	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.2	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	  	$	54.2	  	  	$	(28.8	) 	 	$	(1.0	) 	 	$	(0.1	) 	 	$	24.3	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
During fiscal 2013, an Asset impairment charge of $0.1 million was recorded relating to the write-off of an exclusive marketing arrangement.
Amortization expense for fiscal 2013, 2012 and 2011 was $3.2 million, $3.2 million and $3.2 million, respectively.
 
(5)	Investments in Real Estate Joint Ventures	
Unisource Realty, Inc. and Alco Realty, Inc., wholly owned subsidiaries of Unisource, are partners in one and three real estate joint ventures (partnerships), respectively. In each of the joint ventures, Unisource serves as the limited partner, and each partner has a 50% ownership interest. The general partners of the joint ventures are all real estate investment firms. Unisource has determined that while these investments are Variable Interest Entities (VIE), Unisource is not the primary beneficiary since it has little to no power to direct the most significant operating activities of each of the VIE’s. Accordingly, the Consolidated Financial Statements of the real estate partnerships are accounted for using the equity method and are therefore not consolidated within the financial statements of Unisource.
Investments in these joint ventures at the end of fiscal 2013 and 2012 were as follows:

 	 	2013	 	 	2012	 	
 	 	Investment
carrying
amount	 	 	Proportionate
share of
equity in
net assets	 	 	Dividends
received	 	 	Investment
carrying
amount	 	 	Proportionate
share of
equity in net
assets	 	 	Dividends
received	 	
HP/ALCO, L.P.	 	$	0.3	  	 	 	0.7	  	 	 	(0.4	) 	 	$	0.4	  	 	$	0.9	  	 	$	(0.3	) 	
Valley Park Development I, L.P.	 	 	0.7	  	 	 	0.9	  	 	 	—  	  	 	 	0.6	  	 	 	0.8	  	 	 	—  	  	
Uniwest Atlanta I, L.P.	 	 	0.5	  	 	 	0.7	  	 	 	(0.6	) 	 	 	0.4	  	 	 	0.8	  	 	 	(0.5	) 	
Alco West Las Vegas I, L.P.	 	 	0.1	  	 	 	0.3	  	 	 	(0.2	) 	 	 	0.1	  	 	 	0.4	  	 	 	(0.2	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	$	1.6	  	 	$	2.6	  	 	$	(1.2	) 	 	$	1.5	  	 	$	2.9	  	 	$	(1.0	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Differences between the carrying value of the investments and the underlying equity in net assets are the result of the carrying value of Noncurrent assets being written down to zero at the Acquisition Date.
Investment carrying values are included in Other noncurrent assets in the Consolidated Balance Sheets. Equity earnings in real estate joint ventures were $1.1 million, $1.1 million and $1.2 million in fiscal 2013, 2012 and 2011, respectively, and are included in Equity earnings of affiliates, net of taxes in the Consolidated Statements of Operations.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

(6)	Income Taxes	
Unisource is subject to United States and Canadian federal, state and local income taxes as well as other foreign income taxes. The domestic (United States) and foreign components of Unisource’s Income (loss) before income taxes are as follows:

 	  	2013	 	 	2012	 	 	2011	 	
Domestic (United States)	  	$	15.0	  	 	$	35.3	  	 	$	(18.9	) 	
Foreign	  	 	(1.1	) 	 	 	(15.0	) 	 	 	(13.7	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income taxes including equity earnings of affiliates	  	$	13.9	  	 	$	20.3	  	 	$	(32.6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Income tax expense (benefit) in the Consolidated Statements of Operations consisted of the following:

 	  	2013	 	 	2012	 	 	2011	 	
Current provision:	  				 				 				
U.S.	  	$	—  	  	 	$	—  	  	 	$	—  	  	
State	  	 	1.0	  	 	 	1.0	  	 	 	0.4	  	
Foreign	  	 	0.8	  	 	 	(2.5	) 	 	 	(4.6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total current income tax expense (benefit)	  	$	1.8	  	 	$	(1.5	) 	 	$	(4.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Deferred, net:	  				 				 				
U.S.	  	$	(222.1	) 	 	$	—  	  	 	$	—  	  	
State	  	 	(8.2	) 	 	 	—  	  	 	 	0.2	  	
Foreign	  	 	—  	  	 	 	16.7	  	 	 	(1.5	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Total deferred, net	  	 	(230.3	) 	 	 	16.7	  	 	 	(1.3	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Provision for income tax expense (benefit)	  	$	(228.5	) 	 	$	15.2	  	 	$	(5.5	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	
Reconciliation between the federal statutory rate and the effective tax rate is as follows:

 	  	2013	 	 	2012	 	 	2011	 	
Statutory U.S. income tax rate	  	 	35.0	% 	 	 	35.0	% 	 	 	35.0	% 	
State tax (net of federal benefit)	  	 	2.4	  	 	 	11.8	  	 	 	(1.5	) 	
Foreign tax (net of federal benefit)	  	 	9.2	  	 	 	11.4	  	 	 	2.8	  	
Effect of tax reserve adjustments	  	 	—  	  	 	 	—  	  	 	 	(1.5	) 	
State net operating loss	  	 	—  	  	 	 	(6.5	) 	 	 	(14.5	) 	
Nondeductible items	  	 	26.5	  	 	 	10.5	  	 	 	(2.9	) 	
Valuation allowance	  	 	(1,716.1	) 	 	 	11.8	  	 	 	(18.7	) 	
Deferred tax – PIK notes	  	 	—  	  	 	 	—  	  	 	 	17.5	  	
Other	  	 	(0.9	) 	 	 	0.9	  	 	 	0.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Effective income tax rate	  	 	(1,643.9	)% 	 	 	74.9	% 	 	 	16.9	% 	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Deferred income tax assets and liabilities at the end of fiscal 2013 and 2012 were as follows:

 	  	2013	 	 	2012	 	
 	  	Domestic	 	 	Non-US	 	 	Domestic	 	 	Non-US	 	
Deferred income tax assets:	  				 				 				 				
Property and equipment, net	  	$	5.3	  	 	 	1.7	  	 	$	3.8	  	 	$	2.9	  	
Capital lease obligations to related party	  	 	21.7	  	 	 	—  	  	 	 	24.3	  	 	 	—  	  	
Other intangibles, net	  	 	—  	  	 	 	4.1	  	 	 	—  	  	 	 	4.7	  	
Deferred compensation, defined benefit plans and bonus	  	 	16.0	  	 	 	5.6	  	 	 	21.8	  	 	 	8.5	  	
Net operating loss carryforward	  	 	206.6	  	 	 	1.4	  	 	 	214.9	  	 	 	—  	  	
Allowance for doubtful accounts	  	 	4.3	  	 	 	—  	  	 	 	6.4	  	 	 	—  	  	
Other	  	 	10.2	  	 	 	0.9	  	 	 	11.2	  	 	 	1.2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross deferred income tax assets	  	 	264.1	  	 	 	13.7	  	 	 	282.4	  	 	 	17.3	  	
Less valuation allowance	  	 	(11.0	) 	 	 	(13.4	) 	 	 	(251.4	) 	 	 	(17.1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total deferred tax asset	  	$	253.1	  	 	$	0.3	  	 	$	31.0	  	 	$	0.2	  	
Deferred income tax liabilities:	  				 				 				 				
Inventory reserve	  	 	(12.6	) 	 	 	—  	  	 	 	(12.4	) 	 	 	—  	  	
Prepaid assets	  	 	(3.1	) 	 	 	—  	  	 	 	(3.5	) 	 	 	—  	  	
Defined benefit plans	  	 	(7.7	) 	 	 	—  	  	 	 	(7.2	) 	 	 	—  	  	
Other intangibles, net	  	 	(9.5	) 	 	 	—  	  	 	 	(11.2	) 	 	 	—  	  	
Other	  	 	—  	  	 	 	(0.3	) 	 	 	—  	  	 	 	(0.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total deferred tax liability	  	$	(32.9	) 	 	$	(0.3	) 	 	$	(34.3	) 	 	$	(0.2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net deferred income tax asset (liability)	  	$	220.2	  	 	$	—  	  	 	$	(3.3	) 	 	$	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unisource has historically recorded a valuation allowance related to certain U.S. deferred tax assets due to the uncertainty of the ultimate realization of future benefits from these assets. Unisource records a valuation allowance when it is “more likely than not” that some portion or all of the deferred income tax assets will not be realized. In reaching this determination, Unisource considers both positive and negative evidence, including historical losses, the future reversal of temporary differences, future taxable income, exclusive of taxable temporary differences and carryforwards, taxable income in carryback years and tax planning strategies.
During 2013, Unisource concluded that it was more likely than not that the majority of the valuation allowance against its U.S. federal and a substantial portion of its state net deferred tax assets would be realized. This conclusion was based on a detailed evaluation of all relevant evidence in the third quarter, both positive and negative, including such factors as cumulative income for the last twelve quarters, Unisource’s recent ability to sustain a level of profitability and the expectation of continued earnings. Unisource has weighed these positive factors against negative factors, including a prior history of losses and significant net operating loss carryforward, and determined that the positive evidence outweighs the negative evidence. Accordingly, Unisource reversed $238.7 million of its valuation allowance against its U.S. federal and a substantial portion of its state net deferred tax assets. A valuation allowance remains for some of Unisource’s state net operating loss carryforwards that it believes are not more likely than not to be utilized due to the short carryforward periods that exist in certain states. In future periods, the remaining valuation allowance could be reduced if sufficient positive evidence is present indicating that it is more likely than not that a portion or all of Unisource’s remaining deferred tax assets will be realized.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
In connection with the detailed analysis of deferred tax balances in 2013, Unisource identified certain amounts that required adjustments to the 2012 financial statement disclosure of income taxes to properly reflect the deferred tax assets and liabilities as of December 29, 2012. Accordingly, certain net deferred tax assets and liabilities in the 2012 column of the above table have been revised. The revisions increased total deferred tax assets by approximately $0.9 million and increased the corresponding valuation allowance by approximately $1.5 million and decreased total deferred tax liabilities by approximately $0.6 million. The revisions had no impact on the previously reported net deferred tax liabilities, income tax expense or Stockholders’ equity.
During 2012, Unisource concluded that it was more likely than not that the majority of its Canada net deferred tax assets would not be realized. This conclusion was based on a detailed evaluation of all relevant evidence, both positive and negative, including such factors as cumulative loss for the last twelve quarters and the expectation of continued losses in Canada. Therefore, Unisource established a full valuation allowance against its net deferred tax assets in Canada of $16.7 million. As of December 31, 2013, Canada has not shown sufficient positive evidence to justify releasing any of its related valuation allowance.
Unisource has a valuation allowance of $11.0 million against its U.S. state net deferred tax assets and $13.4 million against its Canadian net deferred tax assets as of December 31, 2013.
Deferred tax liabilities have not been recognized for federal tax purposes for the $30.9 million of undistributed earnings of Unisource Canada and Unisource’s other foreign subsidiaries as they are considered to be reinvested for an indefinite period of time. Based on negative cumulative earnings from foreign operations, no incremental tax costs would be expected to be incurred in the hypothetical instance of repatriation and thus no deferred asset or liability would be recorded in the Consolidated Financial Statements.
At December 31, 2013, Unisource had approximately $499.8 million of net operating loss carryforward available for U.S. federal income tax purposes that will expire between 2023 and 2031. Unisource has a state net operating loss benefit of approximately $673.7 million available for state income tax purposes that will expire between 2014 and 2031. As a result, the effective tax rate was different from the statutory tax rate.
Unisource applies a “more likely than not” threshold to the recognition and de-recognition of uncertain tax positions. A change in judgment related to prior years’ uncertain tax positions is recognized in the period of such change.
The following table presents the rollforward of activity for fiscal 2013, 2012 and 2011 for uncertain tax positions:

 	  	2013	 	  	2012	 	  	2011	 	
Beginning of the fiscal year	  	$	1.9	  	  	$	1.9	  	  	$	2.1	  	
Additions based on tax positions taken during the current period	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Reductions based on tax positions taken during a prior period	  	 	—  	  	  	 	—  	  	  	 	—  	  	
Lapses of statutes of limitations	  	 	—  	  	  	 	—  	  	  	 	(0.2	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total gross unrecognized tax benefit	  	$	1.9	  	  	$	1.9	  	  	$	1.9	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Unisource recognizes accrued interest and penalties related to uncertain tax positions as a component of Income tax expense (benefit). Unisource’s Consolidated Statements of Operations include $0.4 million, $0.3 million and $0.2 million in fiscal 2013, 2012 and 2011, respectively, in interest and penalties related to the
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
liability for uncertain tax positions. Unisource recorded a liability for the fiscal years ended December 31, 2013 and December 29, 2012 of $2.5 million and $2.1 million, respectively, in interest and penalties related to the liability. Of the total amount of gross unrecognized tax benefits as of December 31, 2013, an amount up to $1.9 million would affect Unisource’s effective tax rate if realized.
During 2014, Unisource expects to resolve certain tax matters related to U.S. and foreign jurisdictions. As of December 31, 2013, Unisource estimates that it is reasonably possible that unrecognized tax benefits may decrease by $0.3 million in the next twelve months due to the resolution of these issues or due to a lapse in the statute of limitations. With the exception of these tax matters, Unisource does not expect any significant changes in unrecognized tax benefits in 2014.
In the U.S., Unisource remains subject to examination by the Internal Revenue Service (IRS) and certain states for fiscal years 2009 and later. There are certain states where Unisource remains subject to examination for fiscal years 2008 and later. Unisource Canada remains subject to examination by the Canadian Revenue Agency (CRA) and certain provinces for fiscal years 2009 and later.
 
(7)	Long-term Debt	
Long-term debt obligations at the end of fiscal 2013 and 2012 were as follows:

 	  	2013	 	 	2012	 	
Senior Credit Facility	  	$	 317.3	  	 	$	 305.0	  	
			
Real Estate Capital Lease obligations, with related party	  	 	55.3	  	 	 	63.9	  	
Equipment Capital Lease obligations	  	 	10.8	  	 	 	13.9	  	
	  	 	 	 	 	 	 	 	
	  	 	383.4	  	 	 	382.8	  	
Less: Current maturities	  	 	(12.1	) 	 	 	(11.2	) 	
	  	 	 	 	 	 	 	 	
Long term debt, net of current maturities	  	$	371.3	  	 	$	371.6	  	
	  	 	 	 	 	 	 	 	
Future payments related to Long-term debt obligations as of December 31, 2013, were as follows:

 	  	Senior Credit
Facility	 	  	Real Estate
Capital
Leases	 	 	Equipment
Capital
Leases	 	 	Total	 	
2014	  	$	—  	  	  	$	15.9	  	 	$	3.6	  	 	$	19.5	  	
2015	  	 	—  	  	  	 	16.0	  	 	 	3.2	  	 	 	19.2	  	
2016	  	 	317.3	  	  	 	16.2	  	 	 	2.9	  	 	 	336.4	  	
2017	  	 	—  	  	  	 	16.3	  	 	 	2.6	  	 	 	18.9	  	
2018	  	 	—  	  	  	 	8.3	  	 	 	0.5	  	 	 	8.8	  	
Thereafter	  	 	—  	  	  	 	—  	  	 	 	0.3	  	 	 	0.3	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
	  	 	317.3	  	  	 	72.7	  	 	 	13.1	  	 	 	403.1	  	
Less: amounts representing interest	  	 	—  	  	  	 	(17.4	) 	 	 	(2.3	) 	 	 	(19.7	) 	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
	  	$	317.3	  	  	$	55.3	  	 	$	10.8	  	 	$	383.4	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Senior Credit Facilities
On March 15, 2011, Unisource entered into an asset-based senior credit facility agreement (the Senior Credit Facility) which matures on March 15, 2016. The Senior Credit Facility provides for borrowings of up to $613.5 million and $640.0 million as of December 31, 2013 and December 29, 2012, respectively, as follows:
 
 	•	 	Tranche A provided up to $450 million and $150 million of borrowings as of December 31, 2013 and December 29, 2012 based upon eligible receivables and inventory in the U.S. and Canada, respectively. Unisource has the right to increase the Tranche A borrowings up to $150 million (which may be allocated among the U.S. and Canadian sub-facilities as Unisource elects) so long as certain conditions are satisfied.	
 
 	•	 	Tranche A-1 provides additional borrowings in the U.S. and Canada subject to eligibility requirements in the Senior Credit Facility. Effective October 1, 2013, Unisource elected to reduce the Tranche A-1 commitment to $10.0 million and $3.5 million for the U.S. and Canadian sub-facilities, respectively, to lower the fees charged on the unused commitment. Prior to this reduction, Tranche A-1 provided for additional borrowings of up to $30.0 million in the U.S. and $10.0 million in Canada. Advance rates on eligible collateral under Tranche A-1 were initially set to be amortized on a straight-line basis to zero over the first 3 years of the Senior Credit Facility. In connection with the pay down and conversion of the PIK notes, the Tranche A-1 layer was reset to $40 million on December 5, 2011 and the amortization resumed September 2012 on a straight-line basis over 18 months.	
Unisource has letter of credit availability of $100 million and $25 million in the United States and Canada, respectively.
Availability under the Senior Credit Facility is determined based upon a monthly borrowing base calculation which includes eligible customer receivables and inventory, less outstanding borrowing, letters of credit and certain designated reserves. At December 31, 2013 and December 29, 2012, Unisource had $7.8 million and $9.0 million, respectively, of letters of credit outstanding under the Senior Credit Facility. Unisource had $206.2 million and $225.7 million of unused available borrowing capacity at December 31, 2013 and December 29, 2012, respectively.
Individual borrowings under the Senior Credit Facility generally have terms of three months or less. Such arrangements do not preclude classification as a noncurrent liability. All borrowings under the Senior Credit Facility have been classified as Long-term debt based upon Unisource’s intent and ability to refinance these borrowings as they mature on a long-term basis. The Senior Credit Facility includes $28.1 million and $12.8 million of Canadian bank overdrafts at the end of fiscal 2013 and 2012, respectively.
At the election of Unisource, the Senior Credit Facility bears interest at the Bankers Acceptance (BA) Equivalent or LIBOR, plus an applicable margin, as defined in the Senior Credit Facility. The Senior Credit Facility also allows for borrowings referenced to the U.S. base rate or Canadian prime rate. At December 31, 2013 and December 29, 2012, the weighted average interest rate for these borrowings was 2.9% and 3.2%, respectively. In addition, the Senior Credit Facility has an unused line fee which ranges between 37.5 and 62.5 basis points based upon the usage of the line.
The Senior Credit Facility restricts the incurrence of additional indebtedness with respect to secured assets and includes other customary restrictions and provisions contained in an asset-based credit facility. Unisource was in compliance with all covenants and restrictions under the Senior Credit Facility as of December 31, 2013.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Deferred Financing Fees
In connection with Unisource’s Senior Credit Facility which was entered into in March of 2011, Unisource incurred $13.1 million in deferred financing costs of which $6.3 million was due to Bain Capital Partners, LLC (Bain Capital Partners) for services received. The $6.3 million of fees were waived by Bain Capital Partners in 2011 and recorded as a reduction of Other accrued liabilities and an increase to Additional paid-in capital in the Consolidated Balance Sheets. Unamortized deferred financing costs included in Other non-current assets were $10.7 million and $16.5 million, as of December 31, 2013 and December 29, 2012, respectively.
Deferred financing costs are amortized on a straight-line basis over the remaining term of the Senior Credit Facility through 2016 and are reflected as Interest expense in the Consolidated Statements of Operations. Amortization expense was $5.6 million, $5.2 million and $6.9 million for fiscal 2013, 2012 and 2011, respectively. Future amortization of deferred financing costs totals approximately $4.9 million per year for fiscal years 2014 through 2015 and $0.9 million for fiscal 2016.
In connection with the reduction of the Tranche A-1 commitment on October 1, 2013 of $20.0 million and $6.5 million in the U.S. and Canada, respectively, Unisource recorded a charge of $0.5 million in Interest expense in the Consolidated Statements of Operations to write-off the deferred financing costs associated with the reduction in the commitment amount.
Prior to the March 2011 refinancing, the asset-based senior credit facility (the Old Agreement) provided for total borrowings of up to $600 million of which up to $500 million could have been denominated in U.S. dollars and up to the equivalent of US$100 million could have been denominated in Canadian dollars. Borrowings bore interest at the BA Equivalent or LIBOR, plus an applicable margin, as defined in the Old Agreement. The Old Agreement also allowed for borrowings referenced to the U.S. base rate or Canadian prime rate. At January 1, 2011, the weighted average interest rate for these borrowings was 6.3%.
PIK notes
Unisource issued long-term debt obligations (PIK notes) payable to GP in connection with the Acquisition. The PIK notes consisted of two tranches as follows:
 
 	•	 	Tranche A had a face amount of $70 million with an original interest rate of 7%. The Tranche A agreement included a Leverage Ratio requirement such that if Unisource’s Leverage Ratio decreased below a defined threshold at the end of a calendar year, the interest rate in effect increased by 100 basis points. Unisource’s Leverage Ratio was below the threshold at January 1, 2011; therefore, the interest rate in effect for Tranche A increased to 8% retroactive to January 1, 2010.	
 
 	•	 	Tranche B had a face amount of $100 million and an interest rate of 8%. The Tranche B agreement contained no Leverage Ratio provisions or interest rate adjustments.	
Interest under the PIK notes compounded annually at each anniversary date (November 27), and Unisource had the option to pay the interest in cash or issue additional PIK notes equal to the amount of any unpaid interest. Unisource issued additional PIK notes for the settlement of interest amounts due at each payment date.
As described in Note 10, Redeemable Preferred Stock, Unisource completed a recapitalization with Bain and GP on December 5, 2011 to settle the PIK notes through a $100 million cash payment and conversion of the remaining balance into redeemable preferred stock.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Graphic Seller notes
In connection with the 2003 acquisition of Graphic, Unisource issued Graphic Seller notes to certain sellers who were also employees. These notes were non-interest bearing, had a face amount of $10.0 million, matured in September of 2011 and were paid-off at that time. The carrying amount of the Graphic Seller notes at maturity was discounted using a comparable industry borrowing rate of 15.5%.
Real Estate Capital Leases
In connection with the Acquisition, Unisource transferred 42 of its U.S. warehouse and distribution facilities (the Properties) to GP and GP sold 38 of such Properties to an unrelated third party (the Purchaser/Landlord). Contemporaneously with the above, GP entered into lease agreements (the Real Estate Capital Leases) with respect to the individual 38 Properties with the Purchaser/Landlord and Unisource entered into sublease agreements with respect to such Properties with GP. The initial term of the lease and sublease agreements was fifteen years and six months, and such lease and sublease agreements expire in June 2018. The lease and sublease agreements also provide for five consecutive options to renew any lease or sublease for a term of five years each. The lease and sublease agreements also include rent schedules and escalation clauses throughout the lease and sublease terms, including the option periods. Subject to certain conditions, Unisource has the right to sublease any of the Properties. Under the terms of the lease and sublease agreements, GP and Unisource are responsible for all costs and expenses associated with the Properties, including the operation, maintenance and repair, taxes and insurances. Of the four remaining Properties that are directly owned by GP, Unisource has retained lease agreements on two of those Properties which are part of the Real Estate Capital Lease amounts aforementioned.
Equipment Capital Leases
Capital lease obligations also consist of delivery equipment, material handling equipment, computer hardware and office equipment which are leased through third parties under non-cancelable leases with terms ranging from three to eight years. Many of the delivery equipment leases include annual rate increases based on the Consumer Price Index which are included in the calculation of the initial lease obligation. The carrying value of the related equipment associated with these capital leases is included within Property and equipment, net in the Consolidated Balance Sheets.
 
(8)	Employee Benefit Plans	
 
 	(a)	Defined Contribution Plans	
Unisource sponsors defined contribution retirement plans in the United States and Canada in which most of its employees are eligible to participate. In the U.S., Unisource maintains a defined contribution plan for full-time, non-union employees. Unisource’s contributions to these plans are generally a function of the employees’ contributions. Effective January 1, 2010, Unisource matches up to 3.0% of employee contributions.
Unisource also sponsors a defined contribution plan for its full-time, non-union employees in Canada. Unisource contributes 1% of eligible salaries for its full-time, non-union employees. In addition, there is a voluntary employee contribution rate between 0% – 7% (subject to legislative thresholds) and Unisource matches these employee contributions at the rate of 50%. The potential maximum employer contribution for the Canadian defined contribution plan is 4.5%. Furthermore, in Canada there is a
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
mandatory defined contribution plan for union employees. Employees who participate in this plan contribute 2.0%, with a Unisource match of 2.0%. Unisource’s total contributions to its defined contribution retirement plans were $6.9 million, $6.9 million and $8.5 million for fiscal 2013, 2012 and 2011, respectively.
 
 	(b)	U.S. Defined Benefit Plans	
In the U.S., the defined benefit pension plans consist of a non-union and union pension plan. The non-union pension plan was established in November 2002 and is sponsored by Unisource. When the plan was established, certain participants were previously enrolled in a similar plan sponsored by GP. The accumulated obligations of Unisource employees in the GP plan were retained by the GP plan. Effective February 15, 2008, Unisource elected to freeze its U.S. defined benefit pension plan for non-union employees. Under the terms of the freeze, participant benefits ceased accruing future pay credits effective February 15, 2008, however, participants continue to receive interest credits on account balances prior to the freeze date, and no employees became active participants after January 1, 2008.
The U.S. union defined benefit plan is also sponsored by Unisource. In general, employees of Unisource classified as hourly paid and covered by a collective bargaining agreement who are employed at designated locations are eligible to participate in the plan. Each location participating in the plan has certain benefits and other provisions specific to that location. Effective January 1, 2011, the salaried pension plan and the hourly pension plan were merged into one plan; however, the benefits, rights and features applicable to the individual plans remained the same.
Unisource also sponsored a non qualified Supplemental Executive Retirement Plan (SERP) for certain highly compensated employees in the U.S that provided benefits in excess of the qualified plans’ compensation limits. As of January 1, 2008, the plan was amended so that no future eligible employees could become a participant in the plan. Effective February 15, 2008, Unisource amended the plan so that no further pay credits will be made, however, the interest credits will continue after the amendment.
During the period from April 1, 2009 through September 28, 2013, the U.S. defined benefit plan was prevented from making lump sum distributions to its non-union participants, based on restrictions imposed by Internal Revenue Code Section 436, relating to the funding status of the plan. On September 29, 2013, the U.S. defined benefit plan received actuarial certification that the restrictions were lifted and eligible U.S. participants are now permitted to receive lump sum payments for their full cash balance accounts. Expected benefit payments in the U.S. plan for 2014 assume that 75% of vested terminated participants will take lump sum payments; however, the timing of when the actual account balances will be paid is dependent on when participants elect to receive payment of their accounts.
 
 	(c)	Canada Defined Benefit Plans	
In Canada, Unisource sponsors one non-union and two union defined benefit plans also known as Registered Pension Plans (RPP).
Effective December 31, 2009, the non-union defined benefit plan was frozen for service credit. However, the participants are still eligible for early retirement benefits, and final average earnings continue to be used for calculating the retirement benefits.
Effective 2010, the union defined benefit plan was frozen for new participants under the two Collective Bargaining Agreements (CBA). All employees hired after the ratification date of the Collective
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Bargaining Agreements, which cover 2010 – 2015, are eligible to participate in the defined contribution plan described above which requires the employee to make mandatory contributions of 2.0%, with a Unisource match of 2.0%. All employees hired before the ratification date continue to accrue benefits.
Unisource also maintains a nonregistered SERP for certain highly compensated employees in Canada that provides pension benefits in excess of the registered plan compensation limits. Unisource elected to freeze accruing participant benefits and new participation effective December 31, 2009. However, Unisource continues to pay the accumulated benefits earned through December 31, 2009.
In 2011, Unisource implemented significant staff reductions. Some of the affected members received lump sum value settlements for their accrued benefits in 2011, and a significant number of the remaining affected members settled their benefits in 2012. GAAP requires settlement accounting to be adopted when the lump sum payments in the year exceed the sum of service cost and interest cost (the mandatory threshold) for the year. Since the lump sum payments in 2012 were higher than the mandatory threshold, Unisource was required to adopt settlement accounting for 2012. The effect of the settlement on net periodic cost in fiscal 2012 was determined based on an estimated re-measurement gain or loss for those members receiving lump sum payments in the year, plus a charge for a portion of the unrecognized net gains and losses based on estimated percentages of the projected benefit obligation (PBO) settled in the year which amounted to 7.8% for RPP and 11.8% for SERP.
In fiscal 2013, the lump sum payments were also higher than the mandatory threshold. The effect of the settlement on net periodic cost in fiscal 2013 was determined based on an estimated re-measurement gain or loss for those members receiving lump sum payments in the year, plus a charge for a portion of the unrecognized net gains and losses based on estimated percentages of the PBO settled in the year which amounted to 4.4% for RPP and 28.8% for SERP.
Settlement charges related to Canadian defined benefit and SERP plans was $1.2 million and $2.1 million, respectively, for fiscal 2013 and 2012. These settlement charges are reflected in the Consolidated Statements of Operations as follows:

 	  	2013	 	  	2012	 	
Distribution expenses	  	$	0.1	  	  	$	0.2	  	
Selling and administrative expenses	  	 	0.7	  	  	 	0.7	  	
Restructuring (gains) expenses	  	 	0.4	  	  	 	1.2	  	
	  	 	 	 	  	 	 	 	
	  	$	1.2	  	  	$	2.1	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
The following table provides information about the U.S. and Canadian defined benefit pension plans:

 	  	2013	 	 	2012	 	
 	  	U.S.	 	 	Canada	 	 	U.S.	 	 	Canada	 	
Accumulated benefit obligation, end of the year	  	$	84.9	  	 	$	75.7	  	 	$	90.5	  	 	$	84.3	  	
					
Change in projected benefit obligation:	  				 				 				 				
Benefit obligation at the beginning of the year	  	$	90.5	  	 	$	99.3	  	 	$	84.2	  	 	$	99.0	  	
Service cost	  	 	0.6	  	 	 	0.3	  	 	 	0.5	  	 	 	0.2	  	
Interest cost	  	 	3.0	  	 	 	3.8	  	 	 	3.5	  	 	 	4.3	  	
Actuarial (gain) loss	  	 	(7.0	) 	 	 	(5.6	) 	 	 	4.3	  	 	 	3.4	  	
Benefits paid	  	 	(2.1	) 	 	 	(6.8	) 	 	 	(2.0	) 	 	 	(10.2	) 	
Settlements	  	 	(0.1	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Foreign exchange adjustments	  	 	—  	  	 	 	(6.5	) 	 	 	—  	  	 	 	2.6	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Projected benefit obligation at the end of the year	  	$	84.9	  	 	$	84.5	  	 	$	90.5	  	 	$	99.3	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in plan assets:	  				 				 				 				
Plan assets, beginning of year	  	$	64.9	  	 	$	67.2	  	 	$	56.5	  	 	$	66.8	  	
Employer contributions	  	 	3.5	  	 	 	1.7	  	 	 	3.9	  	 	 	4.1	  	
Investment returns	  	 	13.7	  	 	 	5.8	  	 	 	7.2	  	 	 	4.7	  	
Benefits paid	  	 	(2.1	) 	 	 	(6.8	) 	 	 	(2.0	) 	 	 	(10.2	) 	
Administrative expenses paid	  	 	(0.8	) 	 	 	—  	  	 	 	(0.7	) 	 	 	—  	  	
Settlements	  	 	(0.1	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Currency translation adjustments	  	 	—  	  	 	 	(4.4	) 	 	 	—  	  	 	 	1.8	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Plan assets, end of year	  	$	79.1	  	 	$	63.5	  	 	$	64.9	  	 	$	67.2	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Underfunded status at end of year	  	$	(5.8	) 	 	$	(21.0	) 	 	$	(25.6	) 	 	$	(32.1	) 	

																	
 	  	2013	 	 	2012	 	
 	  	U.S.	 	 	Canada	 	 	U.S.	 	 	Canada	 	
Amounts recognized in the	  				 				 				 				
Consolidated Balance Sheets consist of:	  				 				 				 				
Other current liabilities	  	$	(0.1	) 	 	$	(0.1	) 	 	$	(0.2	) 	 	$	(0.5	) 	
Defined benefit pension obligations	  	 	(5.7	) 	 	 	(20.9	) 	 	 	(25.4	) 	 	 	(31.6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net liability recognized	  	$	(5.8	) 	 	$	(21.0	) 	 	$	(25.6	) 	 	$	(32.1	) 	

 	  	2013	 	 	2012	 	
 	  	U.S.	 	 	Canada	 	 	U.S.	 	 	Canada	 	
Amounts not yet reflected in net periodic benefit cost and included in Accumulated other comprehensive income (loss) consist of:	  				 				 				 				
Net loss (gain)	  	$	2.0	  	 	$	17.8	  	 	$	19.3	  	 	$	29.9	  	
Prior service cost (credit)	  	 	0.4	  	 	 	(3.1	) 	 	 	0.5	  	 	 	(3.7	) 	
Net transition obligation (asset)	  				 				 	 	—  	  	 	 	0.1	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net amount recognized	  	$	2.4	  	 	$	14.7	  	 	$	19.8	  	 	$	26.3	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

																									
 	  	2013	 	 	2012	 	 	2011	 	
 	  	U.S.	 	 	Canada	 	 	U.S.	 	 	Canada	 	 	U.S.	 	 	Canada	 	
Components of net periodic benefit cost:	  				 				 				 				 				 				
Service cost	  	$	1.3	  	 	$	0.3	  	 	$	1.2	  	 	$	0.2	  	 	$	1.3	  	 	$	0.2	  	
Interest cost	  	 	3.0	  	 	 	3.8	  	 	 	3.6	  	 	 	4.3	  	 	 	3.5	  	 	 	5.3	  	
Expected return on plan assets	  	 	(4.6	) 	 	 	(3.8	) 	 	 	(4.6	) 	 	 	(4.1	) 	 	 	(3.7	) 	 	 	(4.7	) 	
Amortization of prior service cost	  	 	0.1	  	 	 	(0.4	) 	 	 	0.1	  	 	 	(0.4	) 	 	 	0.1	  	 	 	(0.1	) 	
Settlement (gain) loss	  	 	—  	  	 	 	1.2	  	 	 	—  	  	 	 	2.2	  	 	 	—  	  	 	 	—  	  	
Amortization of net (gain) loss	  	 	1.1	  	 	 	1.5	  	 	 	0.9	  	 	 	2.1	  	 	 	—  	  	 	 	0.9	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net periodic benefit cost	  	$	0.9	  	 	$	2.6	  	 	$	1.2	  	 	$	4.3	  	 	$	1.2	  	 	$	1.6	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Changes to funded status recognized in accumulated other comprehensive (income) loss:	  				 				 				 				 				 				
Net (gain) loss during year	  	$	(16.1	) 	 	$	(7.6	) 	 	$	1.7	  	 	$	2.7	  	 	$	11.1	  	 	$	10.3	  	
Recognized gain (loss)	  	 	(1.1	) 	 	 	(2.7	) 	 	 	(0.9	) 	 	 	(4.3	) 	 	 	—  	  	 	 	(0.9	) 	
Prior service (cost) credit during year	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(4.2	) 	
Recognized prior service (cost) credit	  	 	(0.1	) 	 	 	0.4	  	 	 	(0.1	) 	 	 	0.4	  	 	 	(0.1	) 	 	 	0.1	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net periodic benefit cost	  	$	(17.3	) 	 	$	(9.9	) 	 	$	0.7	  	 	$	(1.2	) 	 	$	11.0	  	 	$	5.3	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amounts expected to be recognized as components of net periodic benefit cost in 2014 are as follows:

 	  	U.S.	 	  	Canada	 	
Amortization of net loss	  	$	—  	  	  	$	0.7	  	
Prior service cost	  	 	0.1	  	  	 	(0.4	) 	
	  	 	 	 	  	 	 	 	
Estimated net periodic cost	  	$	0.1	  	  	$	0.3	  	

																									
 	  	2013	 	 	2012	 	 	2011	 	
 	  	U.S.	 	 	Canada	 	 	U.S.	 	 	Canada	 	 	U.S.	 	 	Canada	 	
Weighted average actuarial assumptions:	  				 				 				 				 				 				
Benefit obligations:	  				 				 				 				 				 				
Discount rate	  	 	4.55	% 	 	 	4.90	% 	 	 	3.75	% 	 	 	4.25	% 	 	 	4.35	% 	 	 	4.50	% 	
Rate of compensation increases	  	 	—  	  	 	 	3.00	% 	 	 	—  	  	 	 	3.00	% 	 	 	—  	  	 	 	3.00	% 	
Net periodic pension costs:	  				 				 				 				 				 				
Discount rate	  	 	3.75	% 	 	 	4.25	% 	 	 	4.35	% 	 	 	4.50	% 	 	 	5.35	% 	 	 	5.40	% 	
Rate of compensation increases	  	 	—  	  	 	 	3.00	% 	 	 	—  	  	 	 	3.00	% 	 	 	—  	  	 	 	3.00	% 	
Expected long-term rate of return on assets	  	 	8.00	% 	 	 	6.25	% 	 	 	8.00	% 	 	 	6.25	% 	 	 	8.00	% 	 	 	6.75	% 	
Unisource recognized the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of its defined benefit pension plans in the accompanying 2013 Consolidated Balance Sheets, with a corresponding adjustment to Accumulated other comprehensive loss, net of $6.8 million of tax.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Unisource’s weighted average expected rate of return on pension plan assets was developed with information provided by its third party professional asset managers and consultants and was based on historical rates of return, inflation expectations and the investment allocations of the pension plan assets.
The weighted average asset allocations of invested assets within Unisource’s defined benefit pension plans at the end of each fiscal year were as follows:

 	  	2013	 	 	2012	 	 	Asset allocation range	 	
 	  	U.S.	 	 	Canada	 	 	U.S.	 	 	Canada	 	 	U.S.	 	  	Canada	 	
Equity securities	  	 	69	% 	 	 	66	% 	 	 	66	% 	 	 	58	% 	 	 	50 – 70	% 	  	 	50 – 70	% 	
Fixed income securities	  	 	31	% 	 	 	33	% 	 	 	34	% 	 	 	40	% 	 	 	25 – 45	% 	  	 	30 – 50	% 	
Cash and cash equivalents	  	 	—  	  	 	 	1	% 	 	 	—  	  	 	 	2	% 	 	 	0 – 10	% 	  	 	0 – 5	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				  				
Total	  	 	100	% 	 	 	100	% 	 	 	100	% 	 	 	100	% 	 				  				
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 				  				
Investment performance is evaluated at least quarterly. Total returns are compared to the weighted average return of a benchmark mix of investment vehicles. Individual fund investments are compared to historical 3, 5 and 10 year returns achieved by funds with similar investment objectives.
Plan assets are measured using the fair value hierarchy as described in Note 1, Fair Value Measurements. U.S. pension plan assets are invested in broad-based mutual funds. Unisource Canada pension assets are invested in pooled funds comprised of marketable securities that are traded on an active exchange.
The following table presents Unisource’s plan assets using the fair value hierarchy as of December 31, 2013.

 	  	Total	 	  	Level 1	 	  	Level 2	 	  	Level 3	 	
Investments – U.S.:	  				  				  				  				
Equity securities	  	$	54.2	  	  	$	—  	  	  	$	54.2	  	  	$	—  	  	
Fixed income securities	  	 	24.7	  	  	 	—  	  	  	 	24.7	  	  	 	—  	  	
Cash and cash equivalents	  	 	0.2	  	  	 	0.2	  	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	79.1	  	  	$	0.2	  	  	$	78.9	  	  	$	—  	  	

																	
 	  	Total	 	  	Level 1	 	  	Level 2	 	  	Level 3	 	
Investments – Canada	  				  				  				  				
Equity securities	  	$	41.6	  	  	$	—  	  	  	$	41.6	  	  	$	—  	  	
Fixed income securities	  	 	21.1	  	  	 	—  	  	  	 	21.1	  	  	 	—  	  	
Cash and cash equivalents	  	 	0.8	  	  	 	0.8	  	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	63.5	  	  	$	0.8	  	  	$	62.7	  	  	$	—  	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
The following table presents Unisource’s plan assets using the fair value hierarchy as of December 29, 2012.

 	  	Total	 	  	Level 1	 	  	Level 2	 	  	Level 3	 	
Investments – U.S.:	  				  				  				  				
Equity securities	  	$	42.8	  	  	$	—  	  	  	$	42.8	  	  	$	—  	  	
Fixed income securities	  	 	22.0	  	  	 	—  	  	  	 	22.0	  	  	 	—  	  	
Cash and cash equivalents	  	 	0.1	  	  	 	0.1	  	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	64.9	  	  	$	0.1	  	  	$	64.8	  	  	$	—  	  	

																	
 	  	Total	 	  	Level 1	 	  	Level 2	 	  	Level 3	 	
Investments – Canada	  				  				  				  				
Equity securities	  	$	39.2	  	  	$	—  	  	  	$	39.2	  	  	$	—  	  	
Fixed income securities	  	 	26.9	  	  	 	—  	  	  	 	26.9	  	  	 	—  	  	
Cash and cash equivalents	  	 	1.1	  	  	 	1.1	  	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	67.2	  	  	$	1.1	  	  	$	66.1	  	  	$	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Unisource expects to contribute $3.8 million and $4.4 million to its U.S. and Canadian defined benefit pension plans, respectively, during fiscal 2014. Future benefit payments under Unisource’s defined benefit pension plans are estimated as follows:

 	  	U.S.	 	  	Canada	 	
2014	  	$	17.7	  	  	$	2.6	  	
2015	  	 	4.2	  	  	 	2.8	  	
2016	  	 	4.3	  	  	 	2.9	  	
2017	  	 	4.3	  	  	 	3.1	  	
2018	  	 	4.4	  	  	 	3.2	  	
2019 – 2023	  	 	23.4	  	  	 	18.9	  	
 
 	(d)	Multiemployer Plans	
Unisource also makes contributions to multiemployer pension plans for its employees covered by such plans. These contributions were $1.5 million for fiscal year 2013, $1.5 million for fiscal year 2012 and $1.6 million for fiscal year 2011. It is reasonably possible that changes could occur affecting employees for which Unisource makes contributions to multiemployer employee benefit plans. Such changes might result in additional contribution obligations to these plans. Any such obligations would be governed by the specific agreement between Unisource and any such plan.
Unisource contributions did not represent more than 5% of total contributions to any multiemployer plans as indicated in the plans’ most recently available annual report and Form 5500. At the date these Consolidated Financial Statements were issued, Forms 5500 were not available for the plan years ending in 2013.
The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects including:
 
 	a.	Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.	
 
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Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	b.	If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.	
 
 	c.	If Unisource chooses to stop participating in some of its multiemployer plans, Unisource may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.	
Unisource’s participation in the multiemployer plans for the annual period ended December 31, 2013 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employee Identification Number and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2013 and 2012 is for the plan’s year end at December 31, 2013 and December 31, 2012, respectively. The zone status is based on information that Unisource received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreement.

 	 	EIN/Pension
Plan
No.	 	Pension
Protection
Act Zone Status	 	FIP/RP
status
Pending/
Implemented	 	Unisource
contributions	 	 	Surcharge
imposed	 	Expiration
date of
collective
bargaining
agreement	
Pension Fund	 		 	    2013    	 	    2012    	 		 	2013	 	 	2012	 	 	2011	 	 		 		
Central States, Southeast & Southwest Areas Pension Fund	 	36-6044243/001	 	Red	 	Red	 	Implemented	 	$	0.1	  	 	$	0.1	  	 	$	0.1	  	 	Yes	 	7/31/2015
11/30/2016	
										
Grocery/Storage Pension Plan 1	 	51-6110168/001	 	N/A	 	N/A	 	N/A	 	 	—  	  	 	 	—  	  	 	 	0.1	  	 	Yes	 	7/31/2015	
										
Minneapolis Food Industry Pension Plan	 	41-6047047/001	 	Yellow	 	Yellow	 	Implemented	 	 	0.2	  	 	 	0.2	  	 	 	—  	  	 	Yes	 	7/31/2015	
										
Teamsters Pension Plan of Philadelphia & Vicinity	 	23-1511735/001	 	Yellow	 	Yellow	 	Implemented	 	 	0.1	  	 	 	0.1	  	 	 	0.1	  	 	Yes	 	3/31/2015	
										
Warehouse Employees Union Local 169 and Employers Joint Pension Fund	 	23-6230368/001	 	Red	 	Red	 	Implemented	 	 	0.1	  	 	 	0.1	  	 	 	0.1	  	 	Yes	 	4/30/2016	
										
Western Conference of Teamsters Pension Trust Fund 2	 	91-6145047	 	Green	 	Green	 	N/A	 	 	0.7	  	 	 	0.7	  	 	 	0.7	  	 	No	 	9/30/2015; 12/31/2015
9/30/2015; 1/31/2017
10/31/2016
10/31/2016	
										
Distributors Association Warehousemen’s 3 Pension Trust Fund 4	 	94-0294755/002	 	Red	 	Red	 	Implemented	 	 	0.1	  	 	 	0.1	  	 	 	0.1	  	 	Yes	 	9/30/2013	
										
The Pulp and Paper Industry Pension Plan for the Pulp and Paper Division 5	 	394940	 	Green	 	Green	 	N/A	 	 	0.2	  	 	 	0.2	  	 	 	0.4	  	 	No	 	10/21/2015	
	 		 		 		 		 	 	 	 	 	 	 	 	 	 	 	 	 		 		
Total contributions	 		 		 		 		 	 	$1.5	  	 	$	1.5	  	 	$	1.6	  	 		 		

 	1  	The Grocery/Storage Pension Plan was in critical status for the plan year that began June 1, 2010. The Rehabilitation Plan included a merger of the Plan into the Minneapolis Food Distributing Industry Pension Plan effective June 1, 2011. These contributions were impacted due to the merger with the Grocery Storage Pension Fund.	
 
 	2  	Unisource has 7 CBAs which participate in the Western Conference of Teamsters Pension Trust. As of the end of the most recent plan year, the participating Unions including the number of employees participating in the pension plan are as follows: L0070 – IPT	
 
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Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
 	Pleasanton (Teamsters Local 70) – 16 Employees, L117 – Kent, WA (Teamsters Local Union No. 117) – 5 Employees, L162 – Portland, OR (General Teamsters Local Union No. 162) – 5 Employees, L0174 – IBT Seattle (General Teamsters Employees, L206 – Eugene, OR) – 6 Employees, L0986 – IBT – Commerce – 52 Employees, L0986 – IBT – La Palma – 44 Employees.	
 
 	3  	The CBA was under negotiation as of the end of fiscal 2013.	
 
 	4  	The Distributors Association Warehousemen’s Pension Trust Fund Plan Year ended May 31, 2013. However, the contributions shown are based on a full 12 month period.	
 
 	5  	The Pulp and Paper Industry Pension Plan for the Pulp and Paper Division is a Canadian plan.	
 
(9)	Commitments and Contingencies	
 
 	(a)	Operating Leases	
Unisource leases, with terms greater than one year, certain of its distribution facilities, operating equipment and office equipment under noncancelable operating leases. Operating lease terms, including renewal options that range from one to twenty years. Many of the leases include escalating rents for which Unisource calculates annual straight-line expense and compares the amount to the actual lease expense by year. Unisource records lease expense using the straight-line method. The difference between straight-line and actual lease payments is recorded in the Consolidated Balance Sheets as a current or noncurrent liability based on the remaining lease term. Many leases include renewal options at predetermined rates or rates tied to a published index. All leasehold improvements are depreciated at the lesser of the asset life or the lease term and the expense is reflected in Depreciation and amortization in the Consolidated Statements of Operations. Total rent expense included in operating expenses in the Consolidated Statements of Operations for fiscal 2013, 2012 and 2011 was as follows:

 	  	2013	 	  	2012	 	  	2011	 	
Distribution expenses	  	$	42.0	  	  	$	41.0	  	  	$	42.0	  	
Selling and administrative expenses	  	 	5.0	  	  	 	5.5	  	  	 	6.0	  	
Restructuring (gains) expenses	  	 	0.5	  	  	 	—  	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
	  	$	47.5	  	  	$	46.5	  	  	$	48.0	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
At the end of fiscal 2013, future commitments under noncancelable leases with an original term of at least one year were as follows:

 	  	2014	 	 	2015	 	 	2016	 	 	2017	 	 	2018	 	 	Thereafter	 	
Operating lease obligations	  	$	39.7	  	 	$	30.5	  	 	$	25.8	  	 	$	20.9	  	 	$	16.7	  	 	$	30.3	  	
Sublease income	  	 	(0.2	) 	 	 	(0.1	) 	 	 	(0.1	) 	 	 	(0.1	) 	 	 	(0.1	) 	 	 	—  	  	
During fiscal 2013, Unisource subleased six facilities under operating leases. Sublease income was $0.6 million, $2.3 million and $2.6 million in fiscal year 2013, 2012 and 2011, respectively.
 
 	(b)	Asset Retirement Obligations	
Unisource has contractual obligations associated with warehouse leases which require the facility be returned to its original condition less normal wear and tear. Costs to restore the warehouse facilities to their previous condition typically include signage removal and repairs to the warehouse floor, dock doors and drywall. In the case of the Real Estate Capital Leases (Note 7), Unisource is also responsible for the repair and/or replacement of warehouse roofs, parking lots and HVAC, in addition to other repairs which are required to return these warehouses to their original condition less normal wear and tear. In
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
accordance with GAAP, accruals are made based on Unisource’s estimates of current market restoration costs, inflation rates and discount rates. At the inception of a lease, the present value of the expected cash payment is recognized as an asset retirement obligation with a corresponding amount recognized in Property and equipment, net in the Consolidated Balance Sheets. The property asset amount is depreciated, and the liability is accreted, over the period from lease inception to the time Unisource expects to vacate the premises resulting in both depreciation and interest accretion charges in the Consolidated Statements of Operations. Discount rates used are based on credit-adjusted risk-free interest rates. Credit-adjusted risk-free rates are estimated based on the average yield for noninvestment grade bonds for the year of the lease inception. Assumptions used to estimate Unisource’s asset retirement obligation (ARO) liability are updated on an annual basis and when significant changes in facts and circumstances occur which would require an adjustment to such estimates.
The following schedule is a reconciliation of the beginning and ending aggregate carrying amount of Unisource’s ARO liabilities, which is reflected primarily in Other noncurrent liabilities in the Consolidated Balance Sheets, for the years ended December 31, 2013 and December 29, 2012:

 	  	2013	 	 	2012	 	
Obligation, beginning of the period	  	$	5.5	  	 	$	4.9	  	
Accretion expense	  	 	0.5	  	 	 	0.5	  	
Additions	  	 	2.0	  	 	 	0.9	  	
Terminations	  	 	(0.4	) 	 	 	(0.8	) 	
Currency translations adjustments	  	 	(0.1	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	
Obligation, end of period	  	$	7.5	  	 	$	5.5	  	

 	(c)	Escheat Audit	
During 2013, Unisource was notified by the State of Delaware that they intended to examine the books and records of Unisource to determine compliance with Delaware escheat laws. Since that date, seven other states have joined with Delaware in the audit process which is conducted by an outside firm on behalf of the states and covers the period from 1981 to present. Unisource had been informed that similar audits have generally taken two to four years to complete. Due to the preliminary stages of such audits, Unisource determined that the ultimate outcome cannot be estimated at this time. Claims or liabilities could be asserted and such outcomes could have a material impact on Unisource’s financial position, results of operations and cash flows.
 
 	(d)	Legal Matters	
Unisource is subject to various legal proceedings and claims that arise in the ordinary course of business. Although the ultimate outcome of legal proceedings underway at any point in time is difficult to reasonably determine, Unisource believes adequate reserves have been established for probable losses and legal costs related thereto.
During fiscal 2005, Unisource Canada entered into a $10.7 million settlement agreement with the Canadian Competition Bureau that required Unisource Canada to make equal annual payments beginning in January 2007 through January 2012. The settlement was subject to an indemnification agreement with GP such that most of these costs were reimbursed by GP. The last remaining payment was made in 2012 to settle the obligation.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	(e)	Other	
Approximately 11.0% of Unisource’s work force is represented under 26 collective bargaining agreements at December 31, 2013. During 2013, Unisource successfully negotiated and renewed three of the six collective bargaining agreements which expired during the year. These agreements were extended through 2016 under terms which approximate market rates. The remaining collective bargaining agreements are currently under negotiation and are expected to be renewed during 2014.
 
(10)	Redeemable Preferred Stock	
On December 5, 2011 (the Transaction Date), Unisource completed a recapitalization with Bain and GP to issue redeemable preferred stock as settlement for its outstanding PIK notes, that had been issued in connection with the Acquisition. As of the Transaction Date, the PIK notes had a net carrying value of $311.4 million. To settle this obligation, Unisource paid $100 million in cash and authorized 228,465 shares of Class A redeemable preferred stock (the Redeemable preferred stock), of which 228,463 were issued, with a par value of $0.01 per share. The initial fair and carrying value of the Redeemable preferred stock at the date of its issuance was $146.1 million, which was determined with the assistance of an independent third party valuation specialist, and was recorded net of stock issuance costs of $0.1 million and a $2.3 million advisory fee due to Bain Capital Partners.
The $65.3 million difference between the net carrying value of the PIK notes, less the cash payment to GP, and the fair value of the Redeemable preferred stock was recorded as Additional paid-in capital in the Consolidated Balance Sheets.
While these shares of Redeemable preferred stock remain outstanding, Unisource cannot, without the written consent of the holders of the Redeemable preferred stock, redeem, purchase or otherwise acquire any of the common stock (unless associated with an employee termination), nor pay or declare dividends or distributions with respect to the common stock. Additionally, without the written consent of the Redeemable preferred stock shareholders, Unisource cannot alter any of the rights and preferences of the Redeemable preferred stock, issue any new shares of Redeemable preferred stock, authorize or issue senior stock, or subdivide the outstanding shares of the Redeemable preferred stock. The holders of the Redeemable preferred stock have no voting rights. In the event of liquidation, dissolution or winding up of Unisource, Redeemable preferred stock holders are entitled to receive assets of Unisource prior to any other stockholders.
The Redeemable preferred stock shares are contingently redeemable, with written notice from the holders, upon any event of default for a price per share equal to the shares’ liquidation value ($1,000 per share) plus any accrued but unpaid dividends. An event of default includes a change in control of Unisource, an insolvency event or failure to declare and pay dividends when required. At any time Unisource, with written notice, has the right to redeem all or a portion of the Redeemable preferred stock for the amount up to the liquidation value plus any accrued but unpaid dividends.
Redeemable preferred stock dividends accrue on a daily basis at a legal rate of 8% per year of the shares’ liquidation value. These dividends must accrue whether or not there are profits, funds or surplus of Unisource available for payment, and Unisource is required to declare a dividend on each share of Redeemable preferred stock in the amount accrued for the one year period ending at the anniversary date of the initial issuance of Redeemable preferred stock. Any dividends not paid shall be accrued and added to the liquidation value of the Redeemable preferred stock shares. In April 2016, Unisource is required to declare and pay in cash all dividends that are accrued and unpaid as of that date.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
As of December 5, 2013, Unisource declared a Redeemable preferred stock dividend of $86.40 per share, which aggregated to $19.7 million. For financial statement purposes, the December 5, 2013 dividend amount was recorded at $19.1 million, which reflected the aggregate dividend payment required to be made in April 2016 using a fair value discount rate of 12%, and was recorded as a reduction in Redeemable preferred stock and increase in Other noncurrent liabilities. The discount rate was based on the fair value rates established at the date of the PIK note exchange.
As of December 31, 2013, the cumulative preferred stock dividend payable recorded in Other noncurrent liabilities was $36.3 million.
As of December 31, 2013 and December 29, 2012, dividends, accreted at a fair value rate of 12%, totaled $37.9 million and $18.5 million, respectively, and were recorded as a reduction to Additional paid-in capital and an increase to Redeemable preferred stock in the Consolidated Balance Sheets. The aggregate liquidation preference of the Redeemable preferred stock at December 31, 2013 was $268.1 million.
 
(11)	Common Stock	
 
 	(a)	Common Stock	
Authorized UWWH common stock includes 30,000 shares of Class A, 90 shares of Class B, 3,125 shares of Class L and 10 shares of Class M. Class A and Class L shares are entitled to one vote per share. Class B and Class M shares have no voting rights.
Any distributions to holders of common stock are to be paid as follows: First, distributions are paid on Class L and Class M shares on a pro rata basis until such distributions constitute a 10% annual return on the original cost from the issuance date through the distribution date. Second, distributions are paid on Class L and Class M shares on a pro rata basis until such distributions constitute a return of the entire original cost of these shares. Last, distributions are paid on a pro rata basis to all classes of common stock.
 
 	(b)	Treasury Stock	
Unisource accounts for treasury stock under the cost method, which requires Unisource to record the value of the shares at the purchased amount. Treasury stock was acquired due to the resignation of a former officer of Unisource in 2009.
The number of authorized shares, outstanding shares, voting shares, treasury shares and the value of treasury stock, has not changed during the fiscal years 2013, 2012 and 2011. The treasury stock values as of the end of fiscal 2013, 2012 and 2011 for Class B and Class M shares were $0.1 million and $0.9 million, respectively.

 	  	Authorized	 	  	Outstanding
at end
  of fiscal year  	 	  	Voting
shares	 	  	Treasury
stock
shares	 	
 	  	Number of shares outstanding (in thousands)	 	
Class A	  	 	30,000	  	  	 	23,104	  	  	 	23,104	  	  	 	—  	  	
Class B	  	 	90	  	  	 	90	  	  	 	—  	  	  	 	90	  	
Class L	  	 	3,125	  	  	 	2,547	  	  	 	2,547	  	  	 	—  	  	
Class M	  	 	10	  	  	 	10	  	  	 	—  	  	  	 	10	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	33,225	  	  	 	25,751	  	  	 	25,651	  	  	 	100	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	(c)	Stock Option Plan	
Unisource’s stock option plan provided for the granting of options to purchase up to 2,500,000 shares of Class A common stock and up to 277,778 shares of Class L common stock. Options could be granted to employees, consultants or advisors to Unisource, had an exercise price established by Unisource’s Board of Directors, generally vested over five years from the date granted and expired ten years after granted, whereby no new options are allowed to be issued under the plan, however, all options which were previously issued under the plan continued in place according to the original terms established at the date of the grant.
A summary of stock option plan activity was as follows:

 	  	Class A
shares	 	 	Weighted
average
exercise price	 	  	Class L
shares	 	 	Weighted
average
exercise price	 	
 	  	(Number of shares in thousands and value per share, as stated)	 	
Outstanding options:	  				 				  				 				
December 29, 2012	  	 	2,165	  	 	$	0.28	  	  	 	241	  	 	$	97.56	  	
Exercised	  	 	(7	) 	 	 	0.28	  	  	 	(1	) 	 	 	97.56	  	
Forfeited	  	 	(63	) 	 	 	0.28	  	  	 	(7	) 	 	 	97.56	  	
Expired	  	 	(570	) 	 	 	0.28	  	  	 	(63	) 	 	 	97.56	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
December 31, 2013	  	 	1,525	  	 	$	0.28	  	  	 	170	  	 	$	97.56	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Exercisable options:	  				 				  				 				
December 31, 2013	  	 	1,384	  	 	$	0.28	  	  	 	154	  	 	$	97.56	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
All outstanding options granted to purchase Class A and Class L common stock were granted to Unisource employees and have an exercise price of $0.28 and $97.56 per share, respectively. These exercise prices did not exceed the fair market values of the underlying shares of Class A and Class L common stock on the date of the grant. The exercise prices were determined by the Board of Directors by taking the actual prices paid for similar shares of common stock at the Acquisition Date as a reference.
For the fiscal year 2013, no options were granted and therefore no fair value was estimated. For the fiscal years 2012 and 2011, the fair value was estimated with the following assumptions:

 	  	March 15,
2012	 	 	June 16,
2011	 	 	August 18,
2011	 	
Risk-free interest rate (1)	  	 	2.29	% 	 	 	2.93	% 	 	 	2.08	% 	
Expected annual volatility (2)	  	 	38.55	% 	 	 	41.68	% 	 	 	41.92	% 	
Expected life (3)	  	 	10	  	 	 	10	  	 	 	10	  	
Dividends (4)	  	 	—  	  	 	 	—  	 	 	 	—  	  	
The inputs used at the grant dates above, were as follows:
 
 	1)	The risk-free interest rate is based on the rate for a U.S. Treasury zero-coupon issue with a term that approximates the expected life of the option grant at the date closest to the option grant date.	
 
 	2)	There is no active external or internal market for Class A and Class L common stock. Accordingly, the volatility used in the valuation model was calculated using averages of the annualized historical volatility for companies considered to be within Unisource’s peer group.	
 
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Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

 	3)	The expected life represents the period that Unisource’s stock-based awards are expected to be outstanding. The expected term assumptions were determined based on expected employee exercise behavior.	
 
 	4)	Unisource has not paid and does not expect to pay dividends on Class A and Class L common stock.	
Compensation expense is recognized on a straight-line basis over the entire vesting period of the options. The compensation expense which was recognized was $0.4 million, $0.7 million and $1.3 million in fiscal 2013, 2012 and 2011, respectively, and is included as a component of Selling and administrative expenses in the Consolidated Statements of Operations.
Historically, Unisource has not recognized any tax benefit associated with stock-based compensation in the Consolidated Statements of Operations due to tax net operating losses and full valuation allowances.
At the end of fiscal 2013, all outstanding options had a weighted average remaining life of 3.1 years and vested options had a weighted average remaining life of 2.2 years. Unisource had $0.5 million of unvested compensation expense related to options that is expected to be charged to expense over the weighted average future period of 1.0 years.
The following is a summary of the changes in nonvested options for fiscal 2011, 2012 and 2013:

 	  	Class A
shares	 	 	Weighted
Average
Grant date
fair value	 	  	Class L
Shares	 	 	Weighted
Average
Grant date
fair value	 	
 	  	(Number of shares in thousands and value per share,
as stated)	 	
Outstanding options:	  				 				  				 				
Nonvested shares at January 1, 2011	  	 	611	  	 	$	0.06	  	  	 	67	  	 	$	44.13	  	
					
Granted	  	 	100	  	 	 	—  	  	  	 	11	  	 	 	5.48	  	
Vested	  	 	(202	) 	 	 	0.09	  	  	 	(22	) 	 	 	45.11	  	
Forfeited	  	 	(58	) 	 	$	0.02	  	  	 	(6	) 	 	 	36.97	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Nonvested shares at December 31, 2011	  	 	451	  	 	 	0.06	  	  	 	50	  	 	$	44.13	  	

Granted	  	 	63	  	 	$	—  	  	  	 	7	  	 	$	—  	  	
Vested	  	 	(163	) 	 	 	0.08	  	  	 	(18	) 	 	 	40.73	  	
Forfeited	  	 	(40	) 	 	 	—  	  	  	 	(4	) 	 	 	35.50	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Nonvested shares at December 29, 2012	  	 	311	  	 	$	0.02	  	  	 	35	  	 	$	26.49	  	

Granted	  	 	—  	  	 	$	—  	  	  	 	—  	  	 	$	—  	  	
Vested	  	 	(107	) 	 	 	0.01	  	  	 	(12	) 	 	 	27.46	  	
Forfeited	  	 	(63	) 	 	 	—  	  	  	 	(7	) 	 	 	3.99	  	
	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Nonvested shares at December 31, 2013	  	 	141	  	 	$	—  	  	  	 	16	  	 	$	24.37	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

(12)	Other Comprehensive Income	
A summary of the components of Other comprehensive income (loss) for the fiscal years ended December 31, 2013, December 29, 2012 and December 31, 2011 is as follows:

 	  	Pre-Tax
amount	 	 	Tax
(expense)/
benefit	 	 	Net of
tax
amount	 	
Fiscal year ended December 31, 2013:	  				 				 				
Foreign currency translation adjustment	  	$	(5.4	) 	 	$	—  	  	 	$	(5.4	) 	
Defined benefit pension plans:	  				 				 				
Net pension gain (loss)	  	 	23.7	  	 	 	(6.4	) 	 	 	17.3	  	
Amortization of prior service credit	  	 	(0.3	) 	 	 	—  	  	 	 	(0.3	) 	
Amortization of net loss	  	 	3.8	  	 	 	(0.4	) 	 	 	3.4	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss)	  	$	21.8	  	 	$	(6.8	) 	 	$	15.0	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Fiscal year ended December 29, 2012:	  				 				 				
Foreign currency translation adjustment	  	$	2.4	  	 	$	—  	  	 	$	2.4	  	
Defined benefit pension plans:	  				 				 				
Net pension gain (loss)	  	 	(4.4	) 	 	 	0.7	  	 	 	(3.7	) 	
Amortization of prior service credit	  	 	(0.3	) 	 	 	0.1	  	 	 	(0.2	) 	
Amortization of net loss	  	 	5.2	  	 	 	(1.1	) 	 	 	4.1	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss)	  	$	2.9	  	 	$	(0.3	) 	 	$	2.6	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Fiscal year ended December 31, 2011:	  				 				 				
Foreign currency translation adjustment	  	$	(2.2	) 	 	$	—  	  	 	$	(2.2	) 	
Defined benefit pension plans:	  				 				 				
Net pension gain (loss)	  	 	(21.4	) 	 	 	2.7	  	 	 	(18.7	) 	
Prior service credit	  	 	4.2	  	 	 	(1.1	) 	 	 	3.1	  	
Amortization of net loss	  	 	0.9	  	 	 	(0.2	) 	 	 	0.7	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss)	  	$	(18.5	) 	 	$	1.4	  	 	$	(17.1	) 	

(13)	Related Party Transactions	
 
 	(a)	Georgia-Pacific	
Unisource purchases certain inventory items from GP and sells certain inventory items to GP in the normal course of business. Purchases from GP, net of applicable discounts, were $205.5 million, $208.9 million and $209.9 million during fiscal 2013, 2012 and 2011, respectively, and were recorded in Cost of products sold in the Consolidated Statements of Operations. Sales to GP were $31.0 million, $22.7 million and $17.0 million during fiscal 2013, 2012 and 2011, respectively.
Related-party accounts receivable from GP were approximately $2.5 million and $2.5 million at the end of fiscal 2013 and 2012, respectively. Related-party accounts payable to GP at the end of fiscal 2013 and 2012 were $6.7 million and $4.5 million, respectively.
At the end of fiscal 2013 and 2012, Unisource had a Related-party accounts receivable from GP related to an indemnity agreement of $0.3 million and $0.3 million, respectively.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)
 
Total payments made with respect to the Properties discussed in Note 7, Long-term debt, were $15.7 million, $15.7 million and $15.5 million during fiscal 2013, 2012 and 2011, respectively. Amounts due and related to the Properties were $55.3 million and $63.9 million at the end of fiscal 2013 and 2012, respectively, and are included in Capital lease obligations to related party, current portion and Capital lease obligations to related party, less current portion in the Consolidated Balance Sheets. Certain assets and liabilities attributed to Unisource for periods prior to the Acquisition Date, related to pension liabilities, income and sales taxes, insurance, other employee benefits, environmental matters, litigation and others, were retained by GP for these prior periods. Unisource also has an agreement with GP whereby Unisource is indemnified by GP against certain claims related to periods prior to the Acquisition Date above certain thresholds.
 
 	(b)	Bain Capital Partners	
At the Acquisition Date, Unisource and Bain Capital Partners entered into an advisory services agreement that provides for consulting and other management services by Bain Capital Partners to Unisource. Under the terms of the advisory consulting agreement, Unisource pays Bain Capital Partners one million dollars a quarter, plus reimbursable expenses. The costs associated with this agreement were $4.4 million, $4.4 million and $4.4 million during fiscal 2013, 2012 and 2011, respectively, and such costs are included in Selling and administrative expenses in the Consolidated Statements of Operations. At the end of fiscal 2012, Other current assets included $1.0 million in advisory fees that related to the first quarter payment for the following year. No prepayment of advisory fees was made at the end of fiscal 2013 for the first quarter of 2014. The advisory services agreement also provides Bain Capital Partners with the right to receive a success fee for leading efforts related to acquisitions and refinancing activities. As discussed in Note 7, Long-term debt, Unisource refinanced the Senior Credit Facility in March 2011. Bain Capital Partners was entitled to receive a transaction fee of $6.3 million related to the refinancing, which Bain Capital Partners agreed to waive, effective December 5, 2011 as part of the PIK note and Redeemable preferred stock transaction (Note 10). The $6.3 million fee waiver is reflected as Additional paid-in capital in the December 31, 2011 Consolidated Balance Sheets. Also as part of the Redeemable preferred stock transaction, Bain Capital Partners was entitled to receive an additional $2.3 million advisory fee. This fee was waived and also recorded as Additional paid-in capital in the December 31, 2011 Consolidated Balance Sheet.
 
 	(c)	Other	
As discussed in Note 5, Investments in Real Estate Joint Ventures, Unisource has a 50.0% ownership interest in four real estate joint ventures. Unisource also leases warehouse and office space from the joint ventures. Rent expense paid to these related parties was approximately $4.3 million, $4.2 million and $4.2 million in fiscal 2013, 2012 and 2011, respectively, and is recorded in Distribution expenses and Selling and administrative expenses in the Consolidated Statements of Operations. Unisource also recorded Equity earnings of affiliates, net of taxes, related to these real estate joint ventures of $1.1 million, $1.1 million and $1.2 million, respectively, in fiscal 2013, 2012 and 2011. Amounts receivable from the joint ventures were $0.2 million and $0.4 million at the end of fiscal 2013 and fiscal 2012, respectively.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and December 29, 2012
(Dollars in millions, except share amounts in thousands)

(14)	Subsequent Events	
Unisource evaluated all events or transactions that occurred after the balance sheet date of December 31, 2013 through March 28, 2014, the date of issuance for the Consolidated Financial Statements. Subsequent to the balance sheet date, no significant events or transactions were noted except as set forth below that impacted the Consolidated Financial Statements.
Unisource entered into an agreement to sell the underlying property held by its real estate joint venture Uniwest Atlanta I, L.P. and received net sale proceeds of $5.0 million in the first quarter of 2014.
Pursuant to an internal reorganization consummated on January 27, 2014 in preparation for the Merger, the Redeemable preferred stock, as well as all existing UWWH common stock and stock options, were cancelled and all obligations related to the accumulated dividends on such Redeemable preferred stock ownership were terminated. In connection with the internal reorganization, equity interests in UWW Holdings, LLC (UWWH Stockholder) were issued to holders of cancelled equity interests on substantially the same economic terms as the cancelled equity interests, including the obligation to pay the accumulated preferred dividends when due. As of January 27, 2014, any obligation with respect to Redeemable preferred stock or the accumulated dividends thereon was transferred from Unisource to UWWH Stockholder.
On January 28, 2014, Unisource and International Paper, Inc. (parent company of xpedx) entered into a definitive merger agreement whereby Unisource will merge with xpedx and form a newly registered publically traded company (the Merger). The Merger is subject to customary closing conditions, including regulatory approvals, and the registration of publically traded shares is subject to customary SEC regulatory approvals.
In connection with the Merger, UWWH, Unisource Worldwide, Inc., a wholly-owned subsidiary of UWWH, Bain Capital and Georgia-Pacific entered into a Consent and Waiver Agreement, whereby Unisource and each of the parties agreed: (i) Unisource would not have the ability to extend the term of the leases under its real estate capital leases and two other warehouse leases with Georgia-Pacific (Refer to Note 7, Long-term Debt), (ii) Georgia-Pacific would no longer be required to reimburse Unisource for certain future deferred compensation obligations, which at December 31, 2013 had a discounted future obligation of approximately $2.0 million and (iii) to settle a Canadian tax dispute concerning a tax benefit relating to the tax basis at the time of the Bain Capital acquisition of Unisource. The payment by Unisource will be based upon the realization of the benefit, but shall not exceed $1.6 million. As of December 31, 2013, Unisource had recognized $1.1 million of such benefit. The liability for the amount recognized was included in Other accrued liabilities in the Consolidated Financial Statements at December 31, 2013.
 
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 UWW HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Dollars in millions)
(Unaudited)

 	  	Three months ended	 	
 	  	March 31,	 	 	March 30,	 	
 	  	2014	 	 	2013	 	
Net sales (including sales to a related party of $8.8 and $6.7 for the three months ended 2014 and 2013, respectively)	  	$	930.7	  	 	$	979.4	  	
Cost of products sold (including purchases from a related party of $44.1 and $49.3 for the three months ended 2014 and 2013, respectively); excluding depreciation and amortization	  	 	763.5	  	 	 	805.5	  	
Distribution expenses	  	 	62.6	  	 	 	63.1	  	
Selling and administrative expenses	  	 	94.6	  	 	 	101.5	  	
Depreciation and amortization	  	 	6.1	  	 	 	6.2	  	
Restructuring expenses	  	 	0.2	  	 	 	0.8	  	
Merger expenses	  	 	7.9	  	 	 	0.2	  	
Asset impairments	  	 	—  	  	 	 	0.1	  	
Other expense, net	  	 	—  	  	 	 	0.6	  	
	  	 	 	 	 	 	 	 	
Operating (loss) income	  	 	(4.2	) 	 	 	1.4	  	
Interest expense, net	  	 	6.3	  	 	 	7.0	  	
Gain on sale of equity-method investments	  	 	(6.6	) 	 	 	—  	  	
	  	 	 	 	 	 	 	 	
Loss before income taxes	  	 	(3.9	) 	 	 	(5.6	) 	
Income tax (benefit) expense	  	 	(0.3	) 	 	 	0.3	  	
Equity earnings of affiliates, net of taxes	  	 	(0.2	) 	 	 	(0.3	) 	
	  	 	 	 	 	 	 	 	
Net loss	  	 	(3.4	) 	 	 	(5.6	) 	
Redeemable preferred stock dividends	  	 	(1.6	) 	 	 	(4.8	) 	
	  	 	 	 	 	 	 	 	
Net loss attributable to common shareholders	  	$	(5.0	) 	 	$	(10.4	) 	

 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
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Table of Contents
 UWW HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Dollars in millions)
(Unaudited)

 	  	Three months ended	 	
 	  	March 31,
2014	 	 	March 30,
2013	 	
Net loss	  	$	(3.4	) 	 	$	(5.6	)	
Other comprehensive income (loss), net of tax:	  				 				
Foreign currency translation adjustment	  	 	(3.3	)	 	 	(1.6	)	
Defined benefit pension plans, net of taxes:	  				 				
Net pension loss	  	 	—  	  	 	 	0.1	 	
Amortization of prior service cost	  	 	(0.1	)	 	 	(0.1	)	
Amortization of net loss	  	 	0.2	 	 	 	0.5	 	
	  	 	 	 	 	 	 	 	
Defined benefit pension plans	  	 	0.1	  	 	 	0.5	 	
	  	 	 	 	 	 	 	 	
Other comprehensive income (loss)	  	 	(3.2	)	 	 	(1.1	) 	
	  	 	 	 	 	 	 	 	
Total comprehensive income (loss)	  	$	(6.6	)	 	$	(6.7	) 	

 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
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 UWW HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in millions, except share amounts)
(Unaudited)

 	  	March 31,
2014	 	 	December 31,
2013	 	
Assets	  				 				
Current assets:	  				 				
Cash	  	$	29.5	  	 	$	22.2	  	
Accounts receivable, less allowance of $13.8 and $14.6 at March 31, 2014 and December 31, 2013, respectively	  	 	448.8	 	 	 	467.8	  	
Related-party accounts receivable	  	 	3.3	 	 	 	2.8	  	
Inventories	  	 	308.8	  	 	 	314.7	  	
Deferred income tax assets	  	 	10.2	  	 	 	10.2	  	
Other current assets	  	 	46.1	 	 	 	52.9	  	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	846.7	 	 	 	870.6	  	
Property and equipment, net	  	 	73.9	  	 	 	76.3	  	
Goodwill	  	 	23.4	 	 	 	23.4	  	
Other intangibles, net	  	 	20.1	  	 	 	20.9	  	
Deferred income tax assets	  	 	210.9	  	 	 	210.0	  	
Other noncurrent assets	  	 	12.1	  	 	 	14.0	  	
	  	 	 	 	 	 	 	 	
Total assets	  	$	1,187.1	  	 	$	1,215.2	  	
	  	 	 	 	 	 	 	 	
Liabilities, Redeemable preferred stock and Stockholders’ equity	  				 				
Current liabilities:	  				 				
Accounts payable	  	$	261.7	  	 	$	227.1	  	
Related-party accounts payable	  	 	7.9	  	 	 	6.7	  	
Accrued payroll and benefits	  	 	20.6	  	 	 	33.0	  	
Other accrued liabilities	  	 	59.0	  	 	 	65.5	  	
Current maturities of long-term debt	  	 	2.6	  	 	 	2.7	  	
Capital lease obligations to related party, current portion	  	 	9.8	  	 	 	9.4	  	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	361.6	 	 	 	344.4	  	
Long-term debt, net of current maturities	  	 	292.5	 	 	 	325.4	  	
Capital lease obligations to related party, less current portion	  	 	43.3	 	 	 	45.9	  	
Defined benefit pension obligations, net	  	 	24.0	 	 	 	26.6	  	
Other noncurrent liabilities	  	 	36.5	 	 	 	73.4	  	
	  	 	 	 	 	 	 	 	
Total liabilities	  	 	757.9	 	 	 	815.7	  	
	  	 	 	 	 	 	 	 	
Commitments and contingencies (Note 9)	  				 				
Redeemable preferred stock, $.01 par value per share; 228,465 shares authorized; 228,463 shares issued and outstanding	  	 	—  	  	 	 	147.7	  	
Stockholders’ equity:	  				 				
Common stock, $.01 par value per share; 1,000 shares issued and outstanding at March 31, 2014	  	 	—  	  	 	 	—  	  	
Common stock, $.01 par value per share; 33.2 million shares authorized; 25.8 million shares issued and outstanding at December 31, 2013	  	 	—  	  	 	 	0.3	  	
Additional paid-in capital	  	 	494.5	 	 	 	311.2	  	
Accumulated deficit	  	 	(66.8	)	 	 	(63.4	) 	
Accumulated other comprehensive loss	  	 	1.5	 	 	 	4.7	  	
Treasury stock at cost, 90,000 shares of Class B and 10,000 shares of Class M	  	 	—  	  	 	 	(1.0	) 	
	  	 	 	 	 	 	 	 	
Total stockholders’ equity	  	 	429.2	  	 	 	251.8	  	
	  	 	 	 	 	 	 	 	
Total liabilities, redeemable preferred stock and stockholders’ equity	  	$	1,187.1	  	 	$	1,215.2	  	

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 UWW HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders’ Equity
(Dollars in millions)
(Unaudited)

 	 	Redeemable
preferred
stock	 	 	Common
stock	 	 	Additional
paid-in
capital	 	 	Accumulated
deficit	 	 	Accumulated
other
comprehensive
income (loss)	 	 	Treasury
stock	 	 	Total
Stockholders’
equity	 	
Balance at December 29, 2012	 	$	147.4	  	 	$	0.3	  	 	$	330.2	  	 	$	(305.8	) 	 	$	(10.3	) 	 	$	(1.0	) 	 	$	13.4	  	
Compensation from stock awards	 	 	—  	  	 	 	—  	  	 	 	0.4	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.4	  	
Redeemable preferred stock dividends accretion	 	 	19.4	  	 	 	—  	  	 	 	(19.4	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(19.4	) 	
Redeemable preferred stock dividends declared	 	 	(19.1	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Net income	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	242.4	  	 	 	—  	  	 	 	—  	  	 	 	242.4	  	
Other comprehensive income, net of tax	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	15.0	  	 	 	—  	  	 	 	15.0	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2013	 	$	147.7	  	 	$	0.3	  	 	$	311.2	  	 	$	(63.4	) 	 	$	4.7	  	 	$	(1.0	) 	 	$	251.8	  	
Compensation from stock awards	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Redeemable preferred stock dividends accretion (1)	 	 	1.6	  	 	 	—  	  	 	 	(1.6	) 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(1.6	) 	
Cancellation of Redeemable preferred stock in connection with reorganization	 	 	(149.3	) 	 	 	—  	  	 	 	149.3	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	149.3	  	
Cancellation of Common and Treasury stock in connection with reorganization	 	 	—  	  	 	 	(0.3	) 	 	 	(0.7	) 	 	 	—  	  	 	 	—  	  	 	 	1.0	  	 	 	—  	  	
Cancellation of Redeemable preferred stock dividend liability	 	 	—  	  	 	 	—  	  	 	 	36.3	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	36.3	  	
Issuance of 1,000 common stock shares to UWWH Stockholder in connection with reorganization	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Net loss	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(3.4	) 	 	 	—  	  	 	 	—  	  	 	 	(3.4	) 	
Other comprehensive income, net of tax	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	(3.2	) 	 	 	—  	  	 	 	(3.2	) 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at March 31, 2014	 	$	—  	  	 	$	—  	  	 	$	494.5	  	 	$	(66.8	) 	 	$	1.5	  	 	$	—  	  	 	$	429.2	  	

(1)  	From January 1, 2014 through January 27, 2014	
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
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 UWW HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
(Unaudited)

 	 	Three months ended	 	
 	 	March 31,	 	 	March 30,	 	
 	 	2014	 	 	2013	 	
Cash flows from operating activities:	 				 				
Net loss	 	$	(3.4	) 	 	$	(5.6	) 	
Adjustments to reconcile net loss to cash provided by operating activities:	 				 				
Depreciation and amortization	 	 	6.1	  	 	 	6.2	  	
Amortization of deferred financing costs	 	 	1.4	  	 	 	1.3	  	
Bad debt (recovery) expense	 	 	(0.5	) 	 	 	0.8	  	
Deferred income taxes	 	 	(1.0	) 	 	 	(0.2	) 	
LIFO provision (benefit)	 	 	(0.2	) 	 	 	(0.7	) 	
Gain on sale of equity-method investments	 	 	(6.6	) 	 	 	—  	  	
Long-lived asset impairment charges	 	 	—  	  	 	 	0.1	  	
Stock option compensation expense	 	 	—  	  	 	 	0.2	  	
Undistributed earnings from affiliates	 	 	0.1	  	 	 	0.2	  	
Other noncash items, net	 	 	(0.5	) 	 	 	0.7	  	
Changes in assets and liabilities:	 				 				
Accounts receivable	 	 	14.9	  	 	 	17.6	  	
Related party accounts receivable	 	 	0.6	  	 	 	0.2	  	
Inventories	 	 	2.8	  	 	 	3.1	  	
Other current assets	 	 	5.8	  	 	 	9.6	  	
Accounts payable	 	 	36.0	  	 	 	(8.6	) 	
Related party accounts payable	 	 	1.1	  	 	 	4.0	  	
Accrued payroll and benefits	 	 	(12.2	) 	 	 	(6.2	) 	
Other accrued liabilities	 	 	(6.5	) 	 	 	(5.3	) 	
Other	 	 	(0.3	) 	 	 	0.4	  	
	 	 	 	 	 	 	 	 	
Cash provided by operating activities	 	 	37.6	  	 	 	17.8	  	
	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 				 				
Property and equipment additions	 	 	(3.1	) 	 	 	(3.8	) 	
Leasehold improvement additions	 	 	(0.3	) 	 	 	(0.7	) 	
Proceeds from sales of equity-method investments	 	 	6.4	  	 	 	—  	  	
	 	 	 	 	 	 	 	 	
Cash provided by (used in) investing activities	 	 	3.0	  	 	 	(4.5	) 	
	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	 				 				
Borrowings under Senior Credit Facility	 	 	858.7	  	 	 	904.9	  	
Payments under Senior Credit Facility	 	 	(884.0	) 	 	 	(908.8	) 	
Payments under Equipment Capital Lease obligations	 	 	(0.7	) 	 	 	(0.8	) 	
Payments under Real Estate Capital Lease obligations to related party	 	 	(2.2	) 	 	 	(2.4	) 	
Changes in bank overdrafts	 	 	(4.9	) 	 	 	(7.2	) 	
	 	 	 	 	 	 	 	 	
Cash (used in) financing activities	 	 	(33.1	) 	 	 	(14.3	) 	
Effect of exchange rate changes on cash	 	 	(0.2	) 	 	 	(0.1	) 	
	 	 	 	 	 	 	 	 	
Net change in cash	 	 	7.3	  	 	 	(1.1	) 	
Cash at beginning of year	 	 	22.2	  	 	 	30.6	  	
	 	 	 	 	 	 	 	 	
Cash at end of the period	 	$	29.5	  	 	$	29.5	  	
	 	 	 	 	 	 	 	 	
Supplemental cash flow disclosures:	 				 				
Cash paid for interest	 	$	4.5	  	 	$	5.2	  	
Cash paid for income taxes net of refunds received	 	 	0.6	  	 	 	0.4	  	
Supplemental schedule of noncash investing and financing activities:	 				 				
Cancellation of cumulative redeemable preferred stock dividend payable to UWWH Stockholder	 	 	36.3	  	 	 	—  	  	
Non-cash settlement of ARO	 	 	0.9	  	 	 	—  	  	
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
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 UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
(1)	Summary of Significant Accounting Policies	
 
 	(a)	Organization and Basis of Presentation	
UWW Holdings, Inc. (UWWH), a Delaware corporation, is owned approximately 60% by Bain Capital Fund VII, L.P. (Bain) and approximately 40% owned by Georgia-Pacific LLC (GP). Bain acquired (the Acquisition) its interest from GP on November 27, 2002 (the Acquisition Date), which effected a change in the control of UWWH. UWWH and its wholly owned subsidiaries are collectively referred to as “Unisource”.
On January 28, 2014, Unisource and International Paper, Inc. (parent company of Veritiv Corporation) entered into a definitive merger agreement (the Merger Agreement) whereby Unisource will merge with Veritiv and form a newly registered publically traded company (the Merger). The Merger is subject to customary closing conditions, including regulatory approvals, and the registration of publically traded shares is subject to customary SEC regulatory approvals.
In preparation for the Merger, Unisource consummated an internal Reorganization on January 27, 2014 (the Reorganization). Pursuant to the Reorganization, the Redeemable preferred stock, as well as all existing UWWH common stock and stock options (collectively, the Equity Interests), were cancelled and all obligations related to the accumulated dividends on such Redeemable preferred stock ownership were terminated. In connection with the Reorganization, Equity Interests in UWW Holdings, LLC (UWWH Stockholder) were issued to holders of cancelled Equity Interests on substantially the same economic terms as the cancelled equity interests, including the obligation to pay the accumulated preferred dividends when due. As of January 27, 2014, any obligation with respect to Redeemable preferred stock or the accumulated dividends thereon was transferred from Unisource to UWWH Stockholder. UWWH is neither a party to nor a guarantor of the UWWH Stockholder’s obligation and as such the obligation is not reflected in the condensed consolidated financial statements of UWWH. However, prior to the Merger, to the extent that Unisource holds cash legally available for distribution and is permitted to distribute such cash under both the Senior Credit Facility agreement (see Note 7) and the Merger Agreement, UWWH may be required to dividend funds to the UWWH Stockholder to pay distributions to its members.
The accompanying unaudited Condensed Consolidated Financial Statements of Unisource have been prepared on the same basis as the annual audited financial statements and in the opinion of management, contain all adjustments (which are of a normal recurring nature, unless otherwise stated) necessary for the fair statement of Unisource’s financial position, results of operations, comprehensive income, and cash flows for the interim periods reported herein. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with Unisource’s annual financial statements for the year ended December 31, 2013. The December 31, 2013 Condensed Consolidated Balance Sheet, contained herein, was derived from audited financial statements, but has been condensed for interim reporting and therefore does not include all disclosures required by accounting principles generally accepted in the United States (GAAP).
The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported, and accordingly, actual results could differ from those estimates, and any such differences may be material. Operating results for the three months ended March 31, 2014 (three months ended March 2014) and March 30, 2013 (three months ended March 2013) are not necessarily indicative of the results that may be expected for the fiscal year.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
On September 25, 2013, Unisource’s Board of Directors agreed to change Unisource’s fiscal year end to a calendar year end on a prospective basis beginning in 2013. Consequently, Unisource’s 2013 year end was December 31, 2013 versus January 4, 2014 under the previous policy. Also, beginning on January 1, 2014, future quarterly reporting periods are based on calendar months. Accordingly, these Condensed Consolidated Financial Statements are for the period covering the thirteen weeks ended March 31, 2014 and the period covering the thirteen weeks ended March 30, 2013.
 
 	(b)	Nature of Operations	
Unisource is a leading distributor of printing and business paper, packaging supplies and equipment, and facility supplies and equipment primarily in the United States and Canada. Additionally, Unisource has international operations in Europe, Asia and Latin America. These product categories, as a percentage of consolidated net sales, were as follows:

 	  	Three months ended	 	
 	  	2014	 	 	2013	 	
 	  	(% of net sales)	 	
Print	  	 	53	% 	 	 	54	% 	
Packaging	  	 	29	% 	 	 	28	% 	
Facility supplies	  	 	16	% 	 	 	17	% 	
Other	  	 	2	% 	 	 	1	% 	
	  	 	 	 	 	 	 	 	
Total	  	 	100	% 	 	 	100	% 	
	  	 	 	 	 	 	 	 	
Sales in the United States, Canada and other international operations, as a percentage of consolidated net sales, were as follows:

 	  	Three months ended	 	
 	  	2014	 	 	2013	 	
 	  	(% of net sales)	 	
United States	  	 	79	% 	 	 	78	% 	
Canada	  	 	20	% 	 	 	21	% 	
Other international	  	 	1	% 	 	 	1	% 	
	  	 	 	 	 	 	 	 	
Total	  	 	100	% 	 	 	100	% 	
	  	 	 	 	 	 	 	 	
Net assets in the United States, Canada and other international countries were as follows:

 	  	March 31,	 	  	December 31,	 	
 	  	2014	 	  	2013	 	
United States	  	$	340.6	  	  	$	304.7	  	
Canada	  	 	83.3	  	  	 	90.5	  	
Other international	  	 	5.3	  	  	 	4.3	  	
	  	 	 	 	  	 	 	 	
Total	  	$	429.2	  	  	$	399.5	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
Unisource sells its products to a diverse customer base that includes commercial printing, retail, hospitality, healthcare, governmental, distribution and manufacturing sectors. Credit is generally extended without requiring collateral based on an evaluation of the customer’s credit risks.
Unisource’s suppliers are widely dispersed throughout North America, Asia and Europe.
 
 	(c)	Revenue Recognition	
Unisource recognizes revenue when persuasive evidence of an agreement exists, delivery has occurred, the price to the buyer is fixed or determinable and collectability is reasonably assured. Delivery is not considered to have occurred until the customer takes title and assumes the risks and rewards of ownership.
Certain revenues are derived from shipments arranged by Unisource made directly from a manufacturer to the customer. Unisource is considered to be a principal to these transactions since it, among other factors, controls pricing and terms with respect to the customer, bears the credit risk of the customer defaulting on payment and is the primary obligor to the manufacturer. Revenues from these sales are reported on a gross basis in the Condensed Consolidated Statements of Operations and amounted to $307.4 million and $345.2 million for the three months ended March 2014 and 2013, respectively.
 
 	(d)	Distribution expenses	
Distribution expenses consist primarily of storage and related facility costs (excluding depreciation charges), shipping and handling, freight and supply chain management costs. Total shipping and handling expenses were $42.4 million and $40.3 million for the three months ended March 2014 and 2013, respectively, and are included in Distribution expenses in the Condensed Consolidated Statements of Operations.
 
 	(e)	Merger expenses	
Merger expenses consist primarily of third party professional service fees related to the Merger.
 
 	(f)	Income taxes	
Unisource recognizes deferred income taxes based on the expected future tax consequences of differences in financial reporting and income tax reporting for operating results, assets and liabilities. Deferred income taxes are determined using enacted tax rates for the applicable future period.
Unisource regularly reviews its deferred tax assets for recoverability and establishes a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. Projected future taxable income is based on Unisource’s expected results and assumptions as to the jurisdiction in which the income will be earned. The expected timing of the reversals of existing temporary differences is based on current tax law and Unisource’s tax methods of accounting.
Unisource recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Condensed Consolidated Financial Statements from such a position are measured based on the largest benefit that has a greater than fifty
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
percent likelihood of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized as part of the provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law until such time that the related tax benefits are recognized.
 
 	(g)	Inventories	
Inventory cost components include the purchase price invoiced by a supplier, plus inbound freight and related costs, and are reduced by estimated volume-based discounts available from certain suppliers. Inventories consist principally of goods purchased for resale (finished goods) and are valued at the lower of cost or market. Cost is determined using the last-in, first-out (LIFO) method for U.S. inventories, which represented 72% and 71% of total reported inventories at March 31, 2014 and December 31, 2013, respectively. Cost is determined using the weighted average method for non-U.S. inventories. If the average cost method (at lower of cost or market) had been used to value U.S. inventories, cost would have been $36.3 million and $36.5 million higher than the LIFO cost at March 31, 2014 and December 31, 2013, respectively. Unisource’s base LIFO layer is from 2002.
 
 	(h)	Fair Value Measurements	
The various inputs used to measure assets and liabilities at fair value establish a hierarchy that distinguishes between assumptions based on market data (observable inputs) and Unisource’s assumptions (unobservable inputs). The hierarchy consists of three broad levels as follows:
Level 1 – Quoted market prices in active markets for identical assets or liabilities.
Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs developed using Unisource’s estimates and assumptions, which reflect those that market participants would use.
Unisource’s assets and liabilities measured at fair value are classified in the fair value hierarchy, as described above, based on the inputs used for valuation.
Unisource’s financial instruments consist primarily of cash, trade accounts receivable, accounts payable and other components of other current assets and other current liabilities, in which the carrying amount approximates its fair value due to the short maturity of these items. The carrying value of borrowings under the Senior Credit Facility approximates fair value since the underlying borrowings bear floating market interest rates and have original terms of no more than three months.
Pension plan assets are primarily comprised of mutual funds and pooled funds. The underlying investments of these funds are valued using either quoted prices in active markets or valued as of the most recent trade date and are classified as Level 2.
 
 	(i)	New Accounting Pronouncements and Recently Adopted Accounting Standards	
In July 2013, the FASB issued ASU 2013-11, “Income Taxes,” which provides guidance on financial statement presentation of an unrecognized tax benefit when a net operating loss carry forward, a similar tax loss or a tax credit carry forward exists. This guidance should be applied to all unrealized tax benefits that exist as of the effective date which is fiscal years beginning after December 15, 2013, and
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
interim periods within those years. Unisource adopted ASU 2013-11 prospectively as of January 1, 2014, and the adoption did not have a material impact on the Condensed Consolidated Financial Statements.
 
 	(j)	Accounting Standards Issued But Not Effective	
In April 2014, the FASB amended the Presentation of Financial Statements and Property, Plant and Equipment Topics of the Accounting Standard Codification to change the requirement for reporting discontinued operations. Under the new guidance, a disposal of a component of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Fewer disposals are expected to qualify as discontinued operations under the new guidance. It also requires the disclosure of pretax income of disposals that do not qualify as discontinued operations. The new guidance is effective for Unisource with disposals that occur after January 1, 2015.
Other accounting pronouncements issued, but not effective until after March 31, 2014, are not expected to have a significant impact on Unisource’s Condensed Consolidated Financial Statements.
 
(2)	Restructuring Expenses	
The following table presents the components of Restructuring expenses in the Condensed Consolidated Statements of Operations:

 	  	Three months ended	 	
 	  	2014	 	  	2013	 	
Severance and personnel costs	  	$	        —  	  	  	$	        0.6	  	
Professional fees and other costs	  	 	—  	  	  	 	0.2	  	
Facility closure and consolidation costs	  	 	0.2	  	  	 	0.2	  	
Gain on facility lease termination	  	 	—  	  	  	 	(0.2	) 	
	  	 	 	 	  	 	 	 	
Total restucturing expenses	  	$	0.2	  	  	$	0.8	  	

 	(a)	North American Shared Service Model	
Over the past several years, Unisource has been working to implement a North American shared service model with the goal of improving profitability and streamlining processes. This initiative involves the consolidation and centralization of sales management, sales operations, supply chain operations, customer service and corporate support functions. Efforts to implement this initiative include restructuring of the workforce, information technology infrastructure and business processes and are currently ongoing.
The Restructuring charges of $0.6 million in the three months ended March 2013 include severance and other personnel costs of $0.5 million. Positions totaling 28 were eliminated during the three months ended March 2013. During the three months ended March 2013, Unisource also recognized a $0.2 million gain upon the execution of an early surrender agreement to terminate the lease for its Mobile, Alabama warehouse.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
The following table presents the restructuring accrual activity related to the North American shared service model:

 	  	Severance and
Personnel Costs	 	 	Professional
Fees and
Other Costs	 	 	Facility
Closure and
Consolidation
Costs	 	 	      Total      	 	
Balance as of December 29, 2012	  	 	3.4	  	 	 	0.1	  	 	 	—  	  	 	 	3.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charges	  	 	1.6	  	 	 	1.2	  	 	 	0.4	  	 	 	3.2	  	
Cash payments	  	 	(4.0	) 	 	 	(1.3	) 	 	 	(0.4	) 	 	 	(5.7	) 	
Non cash (reductions)/additions	  	 	(0.4	) 	 	 	—  	  	 	 	—  	  	 	 	(0.4	) 	
Foreign currency translation	  	 	(0.1	) 	 	 	—  	  	 	 	—  	  	 	 	(0.1	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2013	  	$	        0.5	  	 	$	        —  	  	 	$	        —  	  	 	$	        0.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charges	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Cash payments	  	 	(0.2	) 	 	 	—  	  	 	 	—  	  	 	 	(0.2	) 	
Non cash (reductions)/additions	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
Foreign currency translation	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of March 31, 2014	  	$	0.3	  	 	$	—  	  	 	$	—  	  	 	$	0.3	  	

 	(b)	Sweden Operations Closure	
During 2013, Unisource closed its Sweden operations which had been planned for future packaging manufacturing and research and development. This initiative was substantially completed in 2013.
The Restructuring charge of $0.2 million in the three months ended March 2014 includes additional lease termination charges for early termination of the lease agreement. The Restructuring charge of $0.4 million in the three months ended March 2013 includes severance and other personnel costs of $0.1 million.
The following table presents the restructuring accrual activity related to the Sweden operations closure restructuring:

 	  	Personnel Costs	 	 	Facility Closure and
Consolidation Costs	 	 	          Total            	 	
Balance at December 29, 2012	  	$	          —  	  	 	$	          —  	  	 	$	          —  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charges	  	 	0.3	  	 	 	0.7	  	 	 	1.0	  	
Cash payments	  	 	(0.3	) 	 	 	(0.8	) 	 	 	(1.1	) 	
Non-cash adjustments	  	 	—  	  	 	 	0.1	  	 	 	0.1	  	
Foreign currency translation	  	 	—  	  	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2013	  	$	—  	  	 	$	—  	  	 	$	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Restructuring charges	  	 	—  	  	 	 	0.2	  	 	 	0.2	  	
Cash payments	  	 	—  	  	 	 	—  	  	 	 	—  	  	
Non-cash adjustments	  	 	—  	  	 	 	—  	  	 	 	—  	  	
Foreign currency translation	  	 	—  	  	 	 	—  	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Balance at March 31, 2014	  	$	—  	  	 	$	0.2	  	 	$	0.2	  	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)

 	(c)	Restructuring Obligation Summary	
The remaining restructuring obligations aggregate to $0.5 million at March 31, 2014, the majority of which is expected to be paid in cash within one year.
 
(3)	Property and Equipment	
Depreciation expense was $5.3 million and $5.4 million for the three months ended March 2014 and 2013, respectively.
 
 	(a)	Internal-Use Software	
Amortization of internal-use software costs of $2.3 million and $2.4 million for the three months ended March 2014 and 2013, respectively, has been included in Depreciation and amortization in the Condensed Consolidated Statements of Operations.
Unamortized internal-use software costs, including amounts recorded in construction in progress, were $15.9 million and $16.1 million and are included in Property and equipment, net in the Condensed Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013, respectively.
 
 	(b)	Capital Leases	
Capital leases at March 31, 2014 and December 31, 2013 were as follows:

 	  	March 31,
2014	 	 	December 31,
2013	 	
Gross amounts of assets recorded under capital leases	  	$	        17.2	  	 	$	        18.4	  	
Accumulated depreciation on capital lease assets	  	 	(8.3	) 	 	 	(8.9	) 	
	  	 	 	 	 	 	 	 	
Net book value of capital lease assets	  	$	8.9	  	 	$	9.5	  	
	  	 	 	 	 	 	 	 	
Depreciation of capital leased assets of $0.7 million and $0.8 million for the three months ended March 2014 and 2013, respectively, is included in Depreciation and amortization in the Condensed Consolidated Statements of Operations.
 
 	(c)	Impairment	
During the three months ended March 30, 2013, Unisource recognized a $0.1 million impairment related to the write-off of leasehold improvements upon the early termination of a lease.
 
(4)	Goodwill and Intangible Assets	
 
 	(a)	Goodwill	
Goodwill reflects the excess of consideration paid over the estimated fair value of net identifiable assets acquired related to the purchase of Unisource’s paper and print services company, Graphic Communications (Graphic), in September of 2003. Unisource tests goodwill and indefinite lived intangibles for impairment annually during the fourth quarter or more frequently when events or changes in circumstances indicate that the fair value of the reporting unit has more likely than not declined below its carrying value.
There were no goodwill impairment losses incurred for the three months ended March 2014 and 2013. The balance of Goodwill was $23.4 million at March 31, 2014 and December 31, 2013.
 
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Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)

 	(b)	Customer Relationships and Trade Names	
Customer relationships (finite lived intangibles) and trade names (indefinite lived intangibles) were recorded in connection with the acquisition of Graphic. Amortization expense was $0.8 million and $0.8 million for the three months ended March 2014 and 2013.
Other intangibles, net at March 31, 2014 and December 31, 2013 were as follows:

 	  	March 31, 2014	 	
 	  	Gross
carrying
amount	 	  	Accumulated
amortization	 	 	Cumulative
loss on
impairments	 	 	Currency
translation
adjustment	 	 	Net	 	
Customer relationships	  	$	45.2	  	  	$	(32.7	) 	 	$	(0.4	) 	 	$	(0.2	) 	 	$	11.9	  	
Trade names	  	 	8.8	  	  	 	—  	  	 	 	(0.6	) 	 	 	—  	  	 	 	8.2	  	
Licensing agreement	  	 	0.2	  	  	 	(0.1	) 	 	 	(0.1	) 	 	 	—  	  	 	 	—  	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	  	$	54.2	  	  	 	(32.8	) 	 	 	(1.1	) 	 	 	(0.2	) 	 	 	20.1	  	

																					
 	  	December 31, 2013	 	
 	  	Gross	 	  	 	 	 	Cumulative	 	 	Currency	 	 	 	 	
 	  	carrying	 	  	Accumulated	 	 	loss on	 	 	translation	 	 	 	 	
 	  	amount	 	  	amortization	 	 	impairments	 	 	adjustment	 	 	Net	 	
Customer relationships	  	$	45.2	  	  	$	(31.9	) 	 	$	(0.4	) 	 	$	(0.2	) 	 	$	12.7	  	
Trade names	  	 	8.8	  	  	 	—  	  	 	 	(0.6	) 	 	 	—  	  	 	 	8.2	  	
Licensing agreement	  	 	0.2	  	  	 	(0.1	) 	 	 	(0.1	) 	 	 	—  	  	 	 	—  	  	
	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	  	$	54.2	  	  	$	(32.0	) 	 	$	(1.1	) 	 	$	(0.2	) 	 	$	20.9	  	

 	(c)	Impairment	
There were no other intangibles impairment losses incurred for the three months ended March 2014 and 2013.
 
(5)	Investments in Real Estate Joint Ventures	
Investments in joint ventures at March 31, 2014 and December 31, 2013 were as follows:

 	  	March 31, 2014	 	 	December 31, 2013	 	
 	  	 	 	  	Proportionate	 	  	 	 	 	 	 	  	Proportionate	 	  	 	 	
 	  	Investment	 	  	share of	 	  	 	 	 	Investment	 	  	share of	 	  	 	 	
 	  	carrying	 	  	equity in	 	  	Dividends	 	 	carrying	 	  	equity in	 	  	Dividends	 	
 	  	amount	 	  	net assets	 	  	received	 	 	amount	 	  	net assets	 	  	received	 	
HP/ALCO, L.P.	  	$	0.4	  	  	$	0.8	  	  	$	(0.2	) 	 	$	0.3	  	  	$	0.7	  	  	$	(0.4	) 	
Valley Park Development I, L.P.	  	 	0.7	  	  	 	0.9	  	  	 	—  	  	 	 	0.7	  	  	 	0.9	  	  	 	    —  	  	
Uniwest Atlanta I, L.P.	  	 	—  	  	  	 	—  	  	  	 	    —  	  	 	 	0.5	  	  	 	0.7	  	  	 	(0.6	) 	
Alco West Las Vegas I, L.P.	  	 	—  	  	  	 	—  	  	  	 	(0.1	) 	 	 	0.1	  	  	 	0.3	  	  	 	(0.2	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
	  	$	    1.1	  	  	$	    1.7	  	  	$	(0.3	) 	 	$	    1.6	  	  	$	    2.6	  	  	$	(1.2	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	
During the three months ended March 2014, Unisource sold its investment in Uniwest Atlanta I, L.P, and Alco West Las Vegas I, L.P. and realized a gain of $6.6 million which is included in Gain on sale of equity–method investments in the Condensed Consolidated Statements of Operations, with a tax effect of
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
$2.3 million included in Income tax (benefit) expense in the Condensed Consolidated Statements of Operations. Additionally, as part of the sale of the Alco West Las Vegas I, L.P. joint venture investment, Unisource settled its asset retirement obligation on the property with the buyer (with a fair value of $0.9 million), resulting in a loss of $0.5 million recorded in Selling and administrative expenses in the Condensed Consolidated Statements of Operations.
Investment carrying values are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. Differences between the carrying value of the investments and the underlying equity in net assets are the result of the carrying value of noncurrent assets being written down to zero at the Acquisition Date. Equity earnings in real estate joint ventures were $0.2 million and $0.3 million for the three months ended March 2014 and 2013, respectively, and are included in Equity earnings of affiliates, net of taxes in the Condensed Consolidated Statements of Operations.
 
(6)	Income Taxes	
The provision for Income tax (benefit) expense for the three months ended March 2014 and March 2013 is based on the estimated annual effective tax rate, plus any discrete items.
The following table presents the provision for Income tax (benefit) expense and the effective tax rates for the three months ended March 2014 and 2013:

 	  	Three months ended	 	
 	  	2014	 	 	2013	 	
Loss before income taxes including equity earnings of affiliates	  	$	(3.7	) 	 	$	(5.3	) 	
Income tax (benefit) expense	  	$	(0.3	) 	 	$	        0.3	  	
Effective income tax rate	  	 	        8.1	% 	 	 	(5.7	)% 	
For the three months ended March 2014, Unisource recognized an income tax benefit of $0.3 million compared to income tax expense of $0.3 million in the three months ended March 2013. The income tax benefit in the three months ended March 2014 primarily related to the tax benefit of the pretax book loss offset by the release of a deferred tax asset related to the cancelation of the stock compensation program, as discussed in Note 1 to the Condensed Consolidated Financial Statements, the disallowance of transaction-related costs in 2014 and the gain on the sale of the equity-method investments. The provision for income tax expense for the three months ended March 2013 is predominately related to minimum tax liability requirements in certain states.
Unisource has a valuation allowance of $11.0 million against its state net deferred tax assets and $13.8 million against its Canada net deferred tax assets as of March 31, 2014.
As of March 31, 2014, the gross amount of uncertain tax positions was $1.9 million. Substantially all of the gross uncertain tax positions, if recognized, would impact Unisource’s effective tax rate in the period of recognition. Unisource recognizes accrued interest and penalties related to uncertain tax positions as a component of income tax expense. Unisource recorded interest and penalties of $0.1 million during the three months ended March 2014. Unisource currently estimates that, as a result of expirations of statutes of limitations, the amount of uncertain tax positions could be reduced by approximately $0.3 million during the next twelve months and substantially all of this reduction will positively impact the effective rate.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)

(7)	Long-term Debt	
Long-term debt obligations at March 31, 2014 and December 31, 2013 were as follows:

 	 	March 31,	 	 	December 31,	 	
 	 	2014	 	 	2013	 	
Senior Credit Facility	 	$	        285.1	  	 	$	        317.3	  	
Real Estate Capital Lease obligations, with related party	 	 	53.1	  	 	 	55.3	  	
Equipment Capital Lease obligations	 	 	10.0	  	 	 	10.8	  	
	 	 	 	 	 	 	 	 	
	 	 	348.2	  	 	 	383.4	  	
Less: Current maturities	 	 	(12.4	) 	 	 	(12.1	) 	
	 	 	 	 	 	 	 	 	
Long-term debt, net of current maturities	 	$	335.8	  	 	$	371.3	  	

 	(a)	Senior Credit Facility	
On March 15, 2011, Unisource entered into an asset-based senior credit facility agreement (the Senior Credit Facility) which matures on March 15, 2016. The Senior Credit Facility provides for borrowings of up to $600.0 million and $613.5 million as of March 31, 2014 and December 31, 2013, respectively, as follows:
 
 	•	 	Tranche A provides up to $450.0 million and $150.0 million of borrowings based upon eligible receivables and inventory in the U.S. and Canada, respectively. Unisource has the right to increase the Tranche A borrowings up to $150.0 million (which may be allocated among the U.S. and Canadian sub-facilities as Unisource elects) so long as certain conditions are satisfied.	
 
 	•	 	Tranche A-1 expired on March 15, 2014 pursuant to pre-existing terms in the Senior Credit Facility. As of December 31, 2013, the Tranche A-1 commitment was $10.0 million and $3.5 million for the U.S. and Canadian sub-facilities, respectively.	
At March 31, 2014, the weighted average interest rate for these borrowings was 2.8%.
Unisource had $218.9 million and $206.2 million of available borrowing capacity at March 31, 2014 and December 31, 2013, respectively. The Senior Credit Facility included $22.2 million and $28.1 million of Canadian bank overdrafts at March 31, 2014 and December 31, 2013, respectively. Unisource had $7.8 million of letters of credit outstanding under the Senior Credit Facility as of March 31, 2014 and December 31, 2013, respectively. Unisource was in compliance with all financial covenants under the Senior Credit Facility as of March 31, 2014 and December 31, 2013.
 
 	(b)	Deferred Financing Cost	
Deferred financing costs are amortized on a straight line basis over the remaining term of the Senior Credit Facility through 2016 and are reflected in Interest expense, net in the Condensed Consolidated Statements of Operations. Amortization expense was $1.4 million and $1.3 million for the three months ended March 2014 and 2013, respectively. In addition, during the three months ended March 2014, the Tranche A-1 commitment was reduced to zero and resulted in a $0.2 million charge, recorded in Interest expense, net in the Condensed Consolidated Statements of Operations, to write-off the deferred financing costs associated with the reduction in commitment.
Unamortized deferred financing costs included in Other noncurrent assets were $9.2 million and $10.7 million as of March 31, 2014 and December 31, 2013, respectively.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)

(8)	Employee Benefit Plans	
 
 	(a)	Defined Contribution Plans	
Unisource sponsors defined contribution retirement plans in the United States and Canada in which most of its employees are eligible to participate. Unisource’s total contributions to its United States defined contribution retirement plans were $1.7 million and $1.6 million for the three months ended March 2014 and 2013, respectively, and to its Canada defined contribution retirement plans were $0.4 million and $0.4 million for the three months ended March 2014 and 2013, respectively.
 
 	(b)	U.S. Defined Benefit Plans	
In the U.S., Unisource sponsors a defined benefit pension plan for its nonunion and union employees and a Supplemental Executive Retirement Plan (SERP) for certain highly compensated employees. Effective February 15, 2008, Unisource elected to freeze its U.S. defined benefit plan for its nonunion employees and its SERP, although vested participants in such plans continue to receive interest credits on account balances earned prior to the freeze date.
 
 	(c)	Canada Defined Benefit Plans	
In Canada, Unisource sponsors one nonunion and two union defined benefit plans also known as Registered Pension Plans (RPP). Unisource also maintains a nonregistered SERP for certain highly compensated employees in Canada that provides pension benefits in excess of the registered plan compensation limits.
Effective December 31, 2009, the nonunion defined benefit plan and the SERP plan were frozen for service credit. However, the participants are still eligible for early retirement benefits, and final average earnings continue to be used for calculating retirement benefits.
Effective 2010, the Unisource Canadian union defined benefit plan was frozen for new participants under the two collective bargaining agreements.
A detailed discussion of these plans is presented in Note 8 included in Unisource’s Consolidated Financial Statements for the fiscal year ended December 31, 2013.
Settlement charges related to Canadian defined benefit and SERP plans were $0.1 million for the three months ended March 2013 and were reflected in Restructuring expenses in the Condensed Consolidated Statements of Operations. There were no settlement charges for the three months ended March 2014.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
The total net cost recognized for the three months ended March 2014 and 2013 associated with Unisource’s defined benefit pension and SERP plans is based on actuarial estimates of such costs. The following tables present a summary of the total net periodic cost recorded in the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 2014 and 2013 related to the plans:

 	 	    Three months ended March 2014    	 	 	    Three months ended March 2013    	 	
 	 	U.S.	 	 	Canada	 	 	U.S.	 	 	Canada	 	
Components of net periodic benefit cost:	 				 				 				 				
Service cost	 	$	    0.3	  	 	$	    0.1	  	 	$	    0.3	  	 	$	    0.1	  	
Interest cost	 	 	0.9	  	 	 	1.0	  	 	 	0.8	  	 	 	1.0	  	
Expected return on plan assets	 	 	(1.4	) 	 	 	(0.9	) 	 	 	(1.2	) 	 	 	(1.0	) 	
Settlement loss	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	0.1	  	
Amortization of prior service cost	 	 	—  	  	 	 	(0.1	) 	 	 	—  	  	 	 	(0.1	) 	
Amortization of net loss	 	 	—  	  	 	 	0.2	  	 	 	0.2	  	 	 	0.4	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net periodic benefit cost	 	$	(0.2	) 	 	$	0.3	  	 	$	0.1	  	 	$	0.5	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unisource’s funding policy for its defined benefit pension plans is to contribute amounts sufficient to meet legal funding requirements, plus any additional amounts that Unisource may determine to be appropriate considering the funded status of the plan, tax deductibility, the cash flows generated by Unisource and other factors. Unisource made cash contributions of $0.7 million and $1.0 million, respectively, for the three months ended March 2014 to its U.S. and Canadian defined benefit pension plans, respectively. The SERP plans are funded to the extent of benefit payments, which did not require any funding for the three months ended March 2014.
Unisource expects to contribute $2.6 million and $3.1 million to its U.S. and Canadian defined benefit pension plans, respectively, for the remainder of 2014.
The U.S. defined benefit plan received actuarial certification on September 29, 2013, that restrictions imposed by Internal Revenue Code Section 436 were lifted, and eligible U.S. participants are now permitted to take lump sum payments for their full cash balance accounts.
 
 	(d)	Multiemployer Plans	
Unisource also makes contributions to multiemployer pension plans for its employees covered by such plans. These contributions were $0.4 million and $0.4 million for the three months ended March 2014 and 2013, respectively. It is reasonably possible that changes could occur affecting employees for which Unisource makes contributions to multiemployer employee benefit plans. Such changes might result in additional contribution obligations to these plans. Any such obligations would be governed by the specific agreement between Unisource and any such plan.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)

(9)	Commitments and Contingencies	
 
 	(a)	Operating Leases	
Total rent expense included in operating expenses in the Condensed Consolidated Statements of Operations was as follows:

 	  	    Three months ended    	 	
 	  	2014	 	  	2013	 	
Distribution expenses	  	$	    10.0	  	  	$	    10.4	  	
Selling and administrative expenses	  	 	0.9	  	  	 	1.0	  	
Restructuring expenses	  	 	0.2	  	  	 	0.2	  	
	  	 	 	 	  	 	 	 	
	  	$	11.1	  	  	$	11.6	  	
	  	 	 	 	  	 	 	 	
As of March 31, 2014, future commitments under noncancelable leases with an original term of at least one year were as follows:

 	  	2014	 	  	2015	 	  	2016	 	  	2017	 	  	2018	 	  	Thereafter	 	
Operating lease obligations	  	$	    30.2	  	  	$	    31.6	  	  	$	    26.8	  	  	$	    21.8	  	  	$	    17.4	  	  	$	    31.8	  	
Unisource subleases five facilities under operating leases. Sublease income was less than $0.1 million and $0.2 million for the three months ended March 2014 and 2013, respectively.
 
 	(b)	Asset Retirement Obligations	
Unisource has contractual obligations associated with warehouse leases which require the facility be returned to its original condition less normal wear and tear. Costs to restore the warehouse facilities to their previous condition typically include signage removal and repairs to the warehouse floor, dock doors and drywall. In the case of the Real Estate Capital Leases (Refer to Note 7 of Unisource’s Consolidated Financial Statements for the fiscal year ended December 31, 2013), Unisource is also responsible for the repair and/or replacement of warehouse roofs, parking lots and HVAC, in addition to other repairs which are required to return these warehouses to their original condition less normal wear and tear.
In accordance with GAAP, accruals are made based on Unisource’s estimates of current market restoration costs, inflation rates and discount rates. At the inception of a lease, the present value of the expected cash payment is recognized as an asset retirement obligation (ARO) with a corresponding amount recognized in Property and equipment, net in the Condensed Consolidated Balance Sheets. The property asset amount is depreciated, and the liability is accreted, over the period from lease inception to the time Unisource expects to vacate the premises resulting in both depreciation and interest accretion charges in the Condensed Consolidated Statements of Operations. Discount rates used are based on credit-adjusted risk-free interest rates. Credit-adjusted risk-free rates are estimated based on the average yield for noninvestment grade bonds for the year of the lease inception. Assumptions used to estimate Unisource’s ARO liability are updated on an annual basis and when significant changes in facts and circumstance occur which would affect such estimates.
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
The following schedule is a reconciliation of the beginning and ending aggregate carrying amount of Unisource’s ARO liabilities, which is reflected primarily in Other noncurrent liabilities in the Condensed Consolidated Balance Sheets at March 31, 2014 and December 31, 2013:

 	  	March 31,	 	 	December 31,	 	
 	  	2014	 	 	2013	 	
Obligation, beginning of the year	  	$	        7.5	  	 	$	        5.5	  	
Accretion expense	  	 	0.2	  	 	 	0.5	  	
Additions/Adjustments	  	 	0.5	  	 	 	2.0	  	
Terminations	  	 	(0.9	) 	 	 	(0.4	) 	
Currency translation adjustments	  	 	(0.1	) 	 	 	(0.1	) 	
	  	 	 	 	 	 	 	 	
Obligation, end of period	  	$	7.2	  	 	$	7.5	  	

 	(c)	Escheat Audit	
During 2013, Unisource was notified by the State of Delaware that they intended to examine the books and records of Unisource to determine compliance with Delaware escheat laws. Since that date, seven other states have joined with Delaware in the audit process which is conducted by an outside firm on behalf of the states and covers the period from 1981 to present. Unisource had been informed that similar audits have generally taken two to four years to complete. Due to the preliminary stages of such audits, Unisource determined that the ultimate outcome cannot be estimated at this time. Claims or liabilities could be asserted and such outcomes could have a material impact on Unisource’s financial position, results of operations and cash flows.
 
 	(d)	Legal Matters	
Unisource is subject to various legal proceedings and claims that arise in the ordinary course of business. Although the ultimate outcome of legal proceedings underway at any point in time is difficult to reasonably determine, Unisource believes adequate reserves have been established for probable losses and legal costs related thereto.
 
 	(e)	Other	
Approximately 10.9% of Unisource’s work force is represented under 26 collective bargaining agreements at March 31, 2014. There are three collective bargaining agreements that expired in 2013 and are currently under negotiation and are expected to be renewed during 2014.
 
(10)	Redeemable Preferred Stock	
Redeemable preferred stock was issued on December 5, 2011, in connection with the PIK note exchange. (Refer to Note 10 of Unisource’s Consolidated Financial Statements for the fiscal year ended December 31, 2013).
The aggregate liquidation preference of the Redeemable preferred stock at December 31, 2013 was $268.1 million. As discussed in Note 1 to the Condensed Consolidated Financial Statements, the Redeemable preferred stock, including any obligation to pay Redeemable preferred stock dividends, was cancelled upon the Reorganization on January 27, 2014. The cancellation was recorded as a reduction of Redeemable preferred stock and cancellation of the cumulative preferred stock dividend payable within Other noncurrent
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
liabilities of $149.3 million and $36.3 million, respectively, to bring both balances to zero, with a corresponding increase in Additional paid-in capital of $185.6 million. At January 27, 2014, dividends, accreted at a fair value of 12%, were $39.5 million, which included the cumulative dividend declared on December 5, 2013 of $36.3 million, as well as the undeclared dividend accretion of $1.6 million through December 31, 2013 and $1.6 million for the period January 1, 2014 through January 27, 2014.
 
(11)	Common and Treasury Stock	
Authorized UWWH common stock originally included 30,000 shares of Class A, 90 shares of Class B, 3,125 shares of Class L and 10 shares of Class M. Class A and Class L shares were entitled to one vote per share. Class B and Class M shares had no voting rights. As discussed in Note 1 to the Condensed Consolidated Financial Statements, Common stock (Class A, B, L, and M shares), including Treasury stock, were cancelled upon the Reorganization at January 27, 2014. The cancellation was recorded as a reduction in Common stock and an increase in Treasury stock of $0.3 million and $1.0 million, respectively, to bring both balances to zero at January 27, 2014, with a corresponding decrease in Additional paid-in capital of $0.7 million. In addition, in conjunction with the Reorganization at January 27, 2014, UWWH authorized and issued 1,000 common stock shares to the UWWH Stockholder.
In connection with the consummation of the Reorganization, each option to purchase Class A and Class L common stock of UWWH (Stock Options) was cancelled and concurrently replaced with profit interests in UWWH Stockholder (Profit Interests) that replicated, to the extent practicable, the quantity, vesting, expiration date and exercise price of the Stock Options immediately prior to the Reorganization. Because the fair value of the Profit Interests was equivalent to the Stock Options, no incremental compensation cost was recognized by Unisource following the Reorganization. The unamortized compensation expense will continue to be amortized on a straight-line basis over the vesting period of each holder.
 
(12)	Other Comprehensive Income	
A summary of the components of Other comprehensive income (loss) for the three months ended March 2014 and 2013 were as follows:

 	  	 	 	 	Tax	 	  	 	 	
 	  	Pre-Tax	 	 	(expense)/	 	  	Net of tax	 	
 	  	amount	 	 	benefit	 	  	amount	 	
Three months ended March 2014	  				 				  				
Foreign currency translation adjustment	  	$	(3.3	) 	 	$	        —  	  	  	$	(3.3	) 	
Defined benefit pension plans:	  				 				  				
Net pension loss	  	 	—  	  	 	 	—  	  	  	 	—  	  	
Amortization of prior service cost	  	 	(0.1	) 	 	 	—  	  	  	 	(0.1	) 	
Amortization of net loss	  	 	        0.2	  	 	 	—  	  	  	 	        0.2	  	
	  	 	 	 	 	 	 	 	  	 	 	 	
Other comprehensive income (loss)	  	$	(3.2	) 	 	$	—  	  	  	$	(3.2	) 	

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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)

													
 	  	 	 	 	Tax	 	 	 	 	
 	  	Pre-Tax	 	 	(expense)/	 	 	Net of tax	 	
 	  	amount	 	 	benefit	 	 	amount	 	
Three months ended March 2013	  				 				 				
Foreign currency translation adjustment	  	$	(1.6	) 	 	$	—  	  	 	$	(1.6	) 	
Defined benefit pension plans:	  				 				 	 	—  	  	
Net pension loss	  	 	0.1	  	 	 	—  	  	 	 	0.1	  	
Amortization of prior service cost	  	 	(0.1	) 	 	 	        —  	  	 	 	(0.1	) 	
Amortization of net loss	  	 	        0.6	  	 	 	(0.1	) 	 	 	        0.5	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss)	  	$	(1.0	) 	 	$	(0.1	) 	 	$	(1.1	) 	

(13)	Related Party Transactions	
 
 	(a)	Georgia-Pacific	
Unisource purchases certain inventory items from GP and sells certain inventory items to GP in the normal course of business. Purchases from GP, net of applicable discounts, were $44.1 million and $49.3 million for the three months ended March 2014 and 2013, respectively. These amounts were recorded in Costs of products sold in the Condensed Consolidated Statements of Operations. Sales to GP were $8.8 million and $6.7 million for the three months ended March 2014 and 2013, respectively.
Related party accounts receivable from GP were approximately $3.0 million and $2.5 million as of March 31, 2014 and December 31, 2013, respectively. Related party accounts payable to GP were approximately $7.9 million and $6.7 million as of March 31, 2014 and December 31, 2013, respectively. At March 31, 2014 and December 31, 2013, Unisource also had a related party receivable from GP of $0.3 million and $0.3 million, respectively, related to an indemnity agreement.
In connection with the Acquisition, Unisource transferred 42 of its U.S. warehouse and distribution facilities (the Properties) to GP and GP sold 38 of such Properties to an unrelated third party. Total payments made with respect to the Properties which are part of a sale leaseback transaction with GP (Refer to Note 7 of Unisource’s Consolidated Financial Statements for the fiscal year ended December 31, 2013) were $4.0 million and $4.0 million for the three months ended March 2014 and 2013, respectively.
Amounts due and related to the Properties were $53.1 million and $55.3 million at March 31, 2014 and December 31, 2013, respectively, and are included in Capital lease obligations to related party, current portion and Capital lease obligations to related party, less current portion in the Condensed Consolidated Balance Sheets.
Certain assets and liabilities attributed to Unisource for periods prior to the Acquisition Date, related to pension liabilities, income and sales taxes, insurance, other employee benefits, environmental matters, litigation and others, were retained by GP for these prior periods. Unisource also has an agreement with GP whereby Unisource is indemnified by GP against any claims related to periods prior to the Acquisition Date above certain thresholds.
In connection with the Merger, UWWH, Unisource Worldwide, Inc., a wholly-owned subsidiary of UWWH, Bain and GP entered into a Consent and Waiver Agreement, whereby Unisource and each of the parties agreed: (i) Unisource would not have the ability to extend the term of the leases under its real estate capital leases and two other warehouse leases with GP (Refer to Note 7, Long-term Debt),
 
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UWW HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
March 31, 2014
(Dollars in millions, except share amounts in thousands)
 
(ii) GP would no longer be required to reimburse Unisource for certain future deferred compensation obligations, which at March 31, 2014 had a discounted future obligation of approximately $1.9 million and (iii) to settle a Canadian tax dispute concerning a tax benefit relating to the tax basis at the time of the Acquisition. The payment by Unisource will be based upon the realization of the benefit, but shall not exceed $1.6 million. As of March 31, 2014, Unisource had recognized $1.1 million of such benefit. The liability for the amount recognized was included in Other accrued liabilities in the Condensed Consolidated Balance Sheets at March 31, 2014 and December 31, 2013.
 
 	(b)	Bain Capital Partners	
At the Acquisition Date, Unisource and Bain Capital Partners entered into a management services agreement that provides for consulting and other management services by Bain Capital Partners to Unisource. Under the terms of the management consulting agreement, Unisource pays Bain Capital Partners one million dollars per quarter, plus reimbursable expenses. The cost associated with this agreement was $1.1 million for the three months ended March 2014 and 2013, and such costs are included in Selling and administrative expenses in the Condensed Consolidated Statements of Operations. The advisory services agreement also provides Bain Capital Partners with the right to receive a success fee for leading efforts related to acquisitions and refinancing activities.
 
 	(c)	Other	
As discussed in Note 5, Investments in Real Estate Joint Ventures, Unisource sold its 50% ownership interest in two real estate joint ventures during the three months ended March 2014 and has a 50% ownership interest in two remaining real estate joint ventures.
Unisource also leases warehouse and office space from these joint ventures and rent expense paid to these related parties was approximately $1.1 million and $1.1 million for the three months ended March 2014 and 2013, respectively. Amounts receivable from the two remaining joint ventures were zero and $0.2 million as of March 31, 2014 and December 31, 2013, respectively.
 
(14)	Subsequent Events	
Unisource evaluated all events or transactions that occurred after the balance sheet date of March 31, 2014 through June 4, 2014, the date of issuance for the Condensed Consolidated Financial Statements. Subsequent to the balance sheet date, no significant events or transactions were noted that impacted the Condensed Consolidated Financial Statements.
 
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses payable by us in connection with the distribution of the securities registered hereby. All amounts are estimates except for the SEC registration fee.

SEC Registration Fee	  	$	 169,682	  	
Stock Exchange Listing Fee	  	$	167,000	  	
Printing Fees and Expenses	  	$	1,000,000	  	
Accounting Fees and Expenses	  	$	  5,325,000	  	
Legal Fees and Expenses	  	$	2,750,000	  	
Transfer Agent Fees and Expenses	  	$	118,000	  	
Miscellaneous	  	$	338,318	  	
	  	 	 	 	
Total:	  	$	9,750,000	  	
	  	 	 	 	
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware General Corporation Law
Veritiv Corporation is incorporated under the laws of the state of Delaware.
Section 145(a) of the General Corporation Law of the State of Delaware, or the “DGCL,” provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.
Section 145(b) of the DGCL provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.
 
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Section 145(c) of the DGCL provides that to the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of Section 145 of the DGCL, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
Section 145(e) of the DGCL provides that expenses, including attorneys’ fees, incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in Section 145 of the DGCL. Such expenses, including attorneys’ fees, incurred by former directors and officers or other persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
Section 145(g) of the DGCL specifically allows a Delaware corporation to purchase liability insurance on behalf of its directors and officers and to insure against potential liability of such directors and officers regardless of whether the corporation would have the power to indemnify such directors and officers under Section 145 of the DGCL.
Our Amended and Restated Certificate of Incorporation will contain provisions permitted under Delaware General Corporation Law relating to the liability of directors. These provisions will eliminate a director’s personal liability for monetary damages resulting from a breach of fiduciary duty, except in circumstances involving:
 
 	•	 	any breach of the director’s duty of loyalty;	
 
 	•	 	acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law;	
 
 	•	 	under Section 174 of the Delaware General Corporation Law (unlawful dividends); or	
 
 	•	 	any transaction from which the director derives an improper personal benefit.	
Our Amended and Restated Certificate of Incorporation will require us to indemnify and advance expenses to our directors and officers to the fullest extent not prohibited by the DGCL and other applicable law, except in the case of a proceeding instituted by the director without the approval of our board of directors. Our Amended and Restated Certificate of Incorporation will provide that we are required to indemnify our directors and officers, to the fullest extent permitted by law, for all judgments, fines, settlements, legal fees and other expenses incurred in connection with pending or threatened legal proceedings because of the director’s or officer’s positions with us or another entity that the director or officer serves at our request, subject to various conditions, and to advance funds to our directors and officers to enable them to defend against such proceedings. To receive indemnification, the director or officer must have been successful in the legal proceeding or have acted in good faith and in what was reasonably believed to be a lawful manner in our best interest and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Section 102(b)(7) of the DGCL permits a Delaware corporation to include a provision in its certificate of incorporation eliminating or limiting the personal liability of directors to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. This provision, however, may not eliminate or limit a director’s liability (1) for breach of the director’s duty of loyalty to the corporation or its shareholders, (2) for acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law, (3) under Section 174 of the DGCL, or (4) for any transaction from which the director derived an improper personal benefit. Our Amended and Restated Certificate of Incorporation will contain such a provision.
 
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Indemnification Agreements
Prior to the closing of the Transactions, we will enter into an indemnification agreement with each of our directors. The indemnification agreement will provide our directors with contractual rights to the indemnification and expense advancement rights provided under our Amended and Restated By-Laws, as well as contractual rights to additional indemnification as provided in the indemnification agreement.
Pursuant to the terms of the Merger Agreement, we have agreed to indemnify (and maintain policies of directors’ and officers’ liability insurance for) certain parties to the Transactions, including all of our past or present directors or officers, for a period of at least six years following the closing of the Merger in respect of acts or omissions relating to the Transactions and occurring at or prior to the consummation of the Merger.
The Employment Agreement and the Consulting and Non-Competition Agreement include indemnification provisions. Under those agreements, we agree to indemnify each of these individuals against claims arising out of events or occurrences related to that individual’s service as our agent or the agent of any of our subsidiaries to the fullest extent legally possible.
Directors’ and Officers’ Liability Insurance
Prior to the closing of the Transactions, we will obtain directors’ and officers’ liability insurance which insures against certain liabilities that our directors and officers may, in such capacities, incur.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
In connection with SpinCo’s incorporation, on July 10, 2013, the registrant issued 100 shares of its common stock, par value $0.01 per share, to International Paper in consideration of an aggregate capital contribution of $1.00 by International Paper. This issuance was exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) thereof because the issuance did not involve any public offering of securities.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
 	(a)	Exhibits.	
The Exhibits to this Registration Statement on Form S-1 are listed in the Exhibit Index which follows the signature pages to this Registration Statement and is herein incorporated by reference.
 
 	(b)	Financial Statement Schedules.	
No financial statement schedules are included herein. All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, are inapplicable or the information is included in the consolidated financial statements and has not therefore been omitted here.
ITEM 17. UNDERTAKINGS
 
 	(a)	Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a	
 
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 	court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.	
 
 	(b)	The undersigned registrant hereby undertakes that for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.	
 
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Veritiv Corporation has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Memphis, State of Tennessee, on June 11, 2014.

VERITIV CORPORATION	
		
By:  	 	/s/ Mary A. Laschinger	
	 	Name: Mary A. Laschinger
Title: Chief Executive Officer and President and Chairman of the Board	
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on June 11, 2014 by the following persons in the capacities indicated.

Signature	  	Title	
		
/s/ Mary A. Laschinger	  		
Mary A. Laschinger	  	Chief Executive Officer and President (Principal
Executive Officer) and Chairman of the Board	
		
*	  		
Stephen J. Smith	  	Senior Vice President and Chief Financial Officer
(Principal Financial Officer and Principal Accounting
Officer)	
		
*	  		
C. Cato Ealy	  	Director	
		
*	  		
Carol L. Roberts	  	Director	
		
*	  		
Sharon R. Ryan	  	Director	

	 	*By:	 	/s/ Mary A. Laschinger	  		
	 		 	Mary A. Laschinger	  		
	 		 	as Attorney-in-Fact	  		
 
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EXHIBIT INDEX
Note Regarding Reliance on Statements in Our Contracts : In reviewing the agreements included as exhibits to this Registration Statement on Form S-1, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about Veritiv Corporation, its subsidiaries or affiliates, or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; (iii) may apply standards of materiality in a way that is different from what may be viewed as material to investors; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about Veritiv Corporation, its subsidiaries and affiliates may be found elsewhere in this Registration Statement on Form S-1.

Exhibit
Number	 	Exhibit Description	
		
  2.1**	 	Agreement and Plan of Merger, dated as of January 28, 2014, by and among International Paper Company, Veritiv Corporation (f/k/a/ xpedx Holding Company), xpedx Intermediate, LLC, xpedx, LLC, UWW Holdings, LLC, UWW Holdings, Inc. and Unisource Worldwide, Inc.	
		
  2.2**	 	Amendment No. 1 to the Agreement and Plan of Merger, dated as of May 28, 2014, by and among International Paper Company, Veritiv Corporation (f/k/a xpedx Holding Company), xpedx Intermediate, LLC, xpedx, LLC, UWW Holdings, LLC, UWW Holdings, Inc. and Unisource Worldwide, Inc.	
		
  2.3**	 	Amendment No. 2 to the Agreement and Plan of Merger, dated as of June 4, 2014, by and among International Paper Company, Veritiv Corporation (f/k/a) xpedx Holding Company), xpedx Intermediate, LLC, xpedx, LLC, UWW Holdings, LLC, UWW Holdings, Inc. and Unisource Worldwide, Inc.	
		
  2.4**	 	Contribution and Distribution Agreement, dated as of January 28, 2014, between International Paper Company, Veritiv Corporation (f/k/a/ xpedx Holding Company), UWWH and UWW Holdings, LLC (previously filed as Exhibit 2.4 to the Registration Statement filed on April 4, 2014)	
		
  2.5**	 	Amendment No. 1 to the Contribution and Distribution Agreement, dated May 28, 2014, between International Paper Company, Veritiv Corporation (f/k/a xpedx Holding Company), UWWH and UWW Holdings, LLC	
		
  3.1**	 	Certificate of Incorporation of the Registrant	
		
  3.2**	 	Bylaws of the Registrant	
		
  3.3**	 	Certificate of Amendment of Certificate of Incorporation	
		
  3.4**	 	Form of Amended and Restated Certificate of Incorporation of the Registrant	
		
  3.5**	 	Form of Amended and Restated Bylaws of the Registrant	
		
  4.1	 	Form of Common Stock Certificate	
		
  5.1	 	Opinion of Debevoise & Plimpton LLP	
		
  8.1	 	Opinion of Debevoise & Plimpton LLP as to certain tax matters	
		
  8.2	 	Opinion of Kirkland & Ellis LLP as to certain tax matters	
 
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Exhibit
Number	 	Exhibit Description	
		
10.1**	 	Employee Matters Agreement, dated as of January 28, 2014, by and between International Paper Company, Veritiv Corporation (f/k/a/ xpedx Holding Company) and UWW Holdings, Inc. (previously filed as Exhibit 10.2 to the Registration Statement filed on February 14, 2014)	
		
10.2**	 	Form of Registration Rights Agreement between UWW Holdings, LLC and Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
10.3**	 	Tax Matters Agreement, dated as of January 28, 2014, by and among International Paper Company, Veritiv Corporation (f/k/a/ xpedx Holding Company) and UWW Holdings, Inc. (previously filed as Exhibit 10.5 to the Registration Statement filed on February 14, 2014)	
		
10.4**	 	Debt Financing Commitment Letter, dated as of January 28, 2014, between Veritiv Corporation (f/k/a/ xpedx Holding Company), Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, N.A., SunTrust Bank and SunTrust Robinson Humphrey, Inc. (previously filed as Exhibit 10.6 to the Registration Statement filed on February 14, 2014)	
		
10.5	 	Form of Credit Agreement among xpedx Intermediate and xpedx LLC, as borrowers, the several lenders and financial institutions from time to time parties thereto, Bank of America, N.A., as administrative agent and collateral agent for the lenders party thereto, and the other parties thereto	
		
10.6	 	Form of U.S. Guarantee and Collateral Agreement among xpedx Intermediate, the Subsidiary Borrowers and the U.S. Guarantors parties thereto and SpinCo, in favor of Bank of America, N.A., as administrative agent and collateral agent for the Secured Parties (as defined therein)	
		
10.7†**	 	Employment Agreement, dated as of January 28, 2014, between Veritiv Corporation (f/k/a xpedx Holding Company) and Mary A. Laschinger (previously filed as Exhibit 10.9 to the Registration Statement filed on February 14, 2014)	
		
10.8†**	 	Consulting and Non-Competition Agreement, dated as of January 28, 2014, between UWW Holdings, Inc. and Allan R. Dragone (previously filed as Exhibit 10.10 to the Registration Statement filed on February 14, 2014)	
		
10.9†**	 	Form of Veritiv Corporation (f/k/a xpedx Holding Company) Omnibus Incentive Plan	
		
10.10†	 	Form of Indemnification Agreement to be entered into between Veritiv Corporation (f/k/a xpedx Holding Company) and each of its directors	
		
10.11	 	Form of Canadian Guarantee and Collateral Agreement among Unisource Canada, Inc. and the Canadian Guarantors parties thereto, in favour of Bank of America, N.A., as administrative agent and collateral agent for the Secured Parties (as defined therein)	
		
10.12	 	Form of Transition Services Agreement by and between International Paper Company and Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
10.13**	 	Form of Tax Receivable Agreement by and among Veritiv Corporation (f/k/a/ xpedx Holding Company) and UWW Holdings, LLC	
		
10.14**	 	Amendment to Employee Matters Agreement, dated as of June 4, 2014, by and between International Paper Company, Veritiv Corporation (f/k/a xpedx Holding Company) and UWW Holdings, Inc.	
		
21.1**	 	List of Subsidiaries	
		
23.1	 	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm	
		
23.2	 	Consent of PricewaterhouseCoopers LLP, Independent Accountants	
		
23.3	 	Consent of Debevoise & Plimpton LLP (included in Exhibits 5.1 and 8.1 hereto)	
 
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Exhibit
Number	 	Exhibit Description	
		
23.4	 	Consent of Kirkland & Ellis LLP (included in Exhibit 8.2 hereto)	
		
24.1**	 	Powers of Attorney (contained in signature pages to this registration statement)	
		
99.1**	 	Consent of Allan R. Dragone, Jr., Director of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.2**	 	Consent of Daniel T. Henry, Director of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.3**	 	Consent of Tracy A. Leinbach, Director of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.4**	 	Consent of Seth A. Meisel, Director of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.5**	 	Consent of William E. Mitchell, Director of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.6**	 	Consent of Michael P. Muldowney, Director of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.7**	 	Consent of Charles G. Ward, III, Director of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.8**	 	Consent of John J. Zillmer, Director of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.9**	 	Consent of Stephen J. Smith, Senior Vice President and Chief Financial Officer of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.10**	 	Consent of Elizabeth Patrick, Senior Vice President and Chief Human Resources Officer of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.11**	 	Consent of Neil Russell, Senior Vice President Corporate Affairs of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.12**	 	Consent of Timothy D. Kutz, Senior Vice President Supply Chain of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.13**	 	Consent of Joseph B. Myers, Senior Vice President Facility Solutions, Strategy and Commercial Excellence of Veritiv Corporation (f/k/a/ xpedx Holding Company)	
		
99.14**	 	Consent of Darin W. Tang, Senior Vice President Packaging of Veritiv Corporation (f/k/a/ xpedx Holding Company)	

**	Previously filed.	
†	Identifies management compensation plan or arrangement.	
 
II-8

Exhibit 4.1

. ZQ|CERT#|COY|CLS|RGSTRY|ACCT#|TRANSTYPE|RUN#|TRANS#
COMMON STOCK
PAR VALUE $0.01
COMMON STOCK
THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA, JERSEY CITY, NJ AND COLLEGE STATION, TX
Veritiv
Certificate Number
ZQ00000000
VERITIV CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
Shares
** 000000 ******************
*** 000000 *****************
**** 000000 ****************
***** 000000 ***************
****** 000000 **************
THIS CERTIFIES THAT
is the owner of
MR. SAMPLE & MRS. SAMPLE & MR. SAMPLE & MRS. SAMPLE
***ZERO HUNDRED THOUSAND ZERO HUNDRED AND ZERO***
CUSIP 923454 10 2
SEE REVERSE FOR CERTAIN DEFINITIONS
FULLY-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF
Veritiv Corporation (hereinafter called the “Company”), transferable on the books of the Company in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Articles of Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.
Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.
Chairman
Senior Vice President, General Counsel & Corporate Secretary
VERITIV CORPORATION
SEAL
July 10, 2013
DELAWARE
DATED DD-MMM-YYYY
COUNTERSIGNED AND REGISTERED:
COMPUTERSHARE TRUST COMPANY, N.A.
TRANSFER AGENT AND REGISTRAR,
By AUTHORIZED SIGNATURE
SECURITY INSTRUCTIONS ON REVERSE
Printed by DATA BUSINESS FORMS
1234567
Veritiv
PO BOX 43004, Providence, RI 02940-3004
MR A SAMPLE
DESIGNATION (IF ANY)
ADD 1
ADD 2
ADD 3
ADD 4
CUSIP XXXXXX XX X
Holder ID XXXXXXXXXX
Insurance Value 1,000,000.00
Number of Shares 123456
DTC 12345678 123456789012345
Certificate Numbers Num/No. Denom. Total
1234567890/1234567890 1 1 1
1234567890/1234567890 2 2 2
1234567890/1234567890 3 3 3
1234567890/1234567890 4 4 4
1234567890/1234567890 5 5 5
1234567890/1234567890 6 6 6
Total Transaction 7

 
VERITIV CORPORATION
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:	
 					 	
TEN COM	 	- as tenants in common	 	UNIF GIFT MIN ACT -	 	 	 	Custodian	  	 	
 	 		 		 	(Cust)	 		  	(Minor)	
TEN ENT	 	- as tenants by the entireties	 	under Uniform Gifts to Minors Act                                                                             	
 	 		 	    (State)	
JT TEN	 	- as joint tenants with right   of survivorship and not as   tenants in common	 	UNIF TRF MIN ACT -	 	 	 	Custodian (until age                                 )	
 	 		 		 	(Cust)
 	 		  	 	
 	 		 		 	                         under Uniform Transfers to Minors Act                                              	
 	 		 		 	       (Minor)	 		  	(State)	
Additional abbreviations may also be used though not in the above list.	  	 	

	 	PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE	
For value received,                      hereby sell, assign and transfer unto	 	 	

	
 	
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)	

	

 	 	Shares	
of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint	
		
 	 	Attorney	
to transfer the said stock on the books of the within-named Company with full power of substitution in the premises.	

Dated:	 	 	 	20	 	 	 	 	  	Signature(s) Guaranteed: Medallion Guarantee Stamp
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.	
 
Signature:	 	 

Signature:	 	 
 	 	 	  		
	 	Notice:	 	The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever.

	 		 		 		 		 		  	 	

Exhibit 5.1
[Letterhead of Debevoise & Plimpton LLP]
June 11, 2014
Veritiv Corporation
6400 Poplar Ave.
Memphis, TN 38197
 
Registration Statement on Form S-1
of Veritiv Corporation
(Registration No. 333-193950)

Ladies and Gentlemen:
We have acted as special counsel to Veritiv Corporation, a Delaware corporation (the “Company”), in connection with the filing with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), of the Registration Statement on Form S-1 (File No. 333-193950), as amended (the “Registration Statement”), relating to the registration of shares (the “Shares”) of common stock, par value $0.01 per share (the “Common Stock”), of the Company to be distributed to stockholders of International Paper Company (“International Paper”) in accordance with the terms of the Contribution and Distribution Agreement, dated as of January 28, 2014, as amended, among International Paper, the Company, UWW Holdings, Inc. and UWW Holdings, LLC (the “Distribution Agreement”).
In rendering the opinion expressed below, we have ( a ) examined and relied on the originals, or copies certified or otherwise identified to our satisfaction, of such agreements, documents and records of the Company and International Paper and such other instruments and certificates of public officials, officers and representatives of the Company and International Paper and others as we have deemed necessary or appropriate for the purposes of such opinion, ( b ) examined and relied as to factual matters upon, and have assumed the accuracy of, the statements made in the certificates of public officials, officers and representatives of the Company and International Paper and others delivered to us and ( c ) made such investigations of law as we have deemed necessary or appropriate as a basis for such opinions.
In rendering the opinions expressed below, we have assumed, with your permission, without independent investigation or inquiry, ( i ) the authenticity and completeness of all documents submitted to us as originals, ( ii ) the genuineness of all signatures on all documents that we examined, ( iii ) the conformity to authentic originals and completeness of documents submitted to us as certified, conformed or reproduction copies, ( iv ) the legal capacity of all natural persons executing documents, ( v ) the filing of the Company’s Amended and Restated Certificate of Incorporation, in the form filed as Exhibit 3.4 to the Registration Statement, with the Secretary of State of the State of Delaware and ( vi ) the consummation of the transactions contemplated by the Distribution Agreement in accordance with the terms thereof.

 
					
Veritiv Corporation	  	2	  	June 11, 2014	
 
Based upon and subject to the foregoing and the assumptions, qualifications and limitations hereinafter set forth, we are of the opinion that, when the shares of Common Stock issuable pursuant to the Distribution Agreement have been issued and delivered in accordance with the terms of the Distribution Agreement, the Shares will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the Prospectus forming a part thereof. In giving such consent, we do not concede that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
We are members of the bar of the State of New York. We express no opinion as to the laws of any jurisdiction other than the Delaware General Corporation Law as currently in effect.
Very truly yours,
 
/s/ Debevoise & Plimpton LLP
Debevoise & Plimpton LLP

Exhibit 8.1
[Letterhead of Debevoise & Plimpton LLP]
June 11, 2014
International Paper Company
6420 Poplar Avenue
Memphis, TN 38197
To those concerned:
We have acted as special counsel to International Paper Company, a New York corporation (“IP”), in connection with ( i ) the direct or indirect contribution of assets to, and assumption of liabilities by, xpedx, LLC , a New York limited liability company and a wholly owned subsidiary of IP (“xpedx”) or its subsidiaries, ( ii ) the contribution of all of the membership interests in xpedx to xpedx Intermediate, LLC, a Delaware limited liability company and a wholly owned subsidiary of IP (“xpedx Intermediate”), ( iii ) the contribution by IP of all of the membership interests in xpedx Intermediate to Veritiv Corporation, a Delaware corporation and a wholly owned subsidiary of IP (“Spinco”) in exchange for an issuance of Spinco Common Stock and other property, ( iv ) the distribution of all of the Spinco Common Stock to the holders as of the record date (as such term is defined in the Registration Statement) of the IP Common Stock, ( v ) the merger of UWW Holdings, Inc., a Delaware corporation (“UWWH”) with and into Spinco, with Spinco continuing as the surviving corporation, and ( vi ) the merger of xpedx Intermediate with and into Unisource Worldwide, Inc., a Delaware corporation and wholly owned subsidiary of UWWH (“Unisource”), with Unisource continuing as the Surviving Corporation (the “Transactions”) pursuant to ( a ) an Agreement and Plan of Merger, dated as of January 28, 2014, as amended, entered into by and among IP, Spinco, xpedx Intermediate, xpedx, UWW Holdings, LLC, a Delaware limited liability company (“UWWH Stockholder”), UWWH and Unisource (the “Merger Agreement”) and ( b ) a Contribution and Distribution Agreement, dated as of January 28, 2014, as amended, entered into by and among IP, Spinco, UWWH and UWWH Stockholder (the “Distribution Agreement”).
As such, we have participated in the preparation of or reviewed ( i ) the Merger Agreement, ( ii ) the Distribution Agreement, ( iii ) the other Transaction Agreements, ( iv ) the ruling request that was filed with the IRS on August 23, 2013 in connection with the

					
International Paper Company	  	2	  	June 11, 2014	
 
Transactions and all supplemental submissions filed in connection therewith (together, the “Ruling Request”), ( v ) the ruling letter issued by the IRS on June 4, 2014 in connection with the Transactions (together with the Ruling Request, the “IRS Ruling”), and ( vi ) the Form S-1 of Spinco filed in connection with the Transactions (as amended or supplemented through the date hereof, the “Registration Statement”) (the “Transaction Documents”). Capitalized terms used herein without definition have the meanings assigned to them in the Merger Agreement.
We are delivering this opinion to you pursuant to Section 9.2(d) of the Merger Agreement.
In rendering this opinion:
 
(a)	we have examined and relied upon the originals, or copies certified or otherwise identified to our satisfaction, of the Transaction Documents and such other agreements, instruments, documents and records of the Company as we have deemed necessary or appropriate for the purposes of this opinion;	
 
(b)	we have assumed, without independent investigation or inquiry, ( i ) the authenticity and completeness of all documents submitted to us as originals, ( ii ) the genuineness of all signatures on all documents that we examined, ( iii ) the conformity to authentic originals and completeness of documents submitted to us as certified, conformed or reproduction copies, ( iv ) the legal capacity of all natural persons executing documents, ( v ) the due authorization, execution and delivery of the Transaction Documents, ( vi ) the valid existence and good standing of all parties to the Transaction Documents, ( vii ) the enforceability of the Transaction Documents, and ( viii ) that all applicable reporting requirements have been or will be satisfied;	
 
(c)	we have assumed, with your permission, ( i ) that all covenants and other undertakings set forth in the Transaction Documents have been or will be performed in accordance with the terms thereof, ( ii ) that the transactions contemplated by the Transaction Documents have been or will be consummated in accordance with the terms thereof, ( iii ) that none of the material terms and conditions of the Transaction Documents have been or will be waived or modified, (iv) the valid existence and good standing of all parties to the Transaction Documents, and ( v ) that there are no documents or understandings between the parties that would alter, or are inconsistent with, the terms set forth in the Transaction Documents; and	
 
(d)	we have examined and relied upon, and have assumed the accuracy of, all statements regarding factual matters, representations and warranties contained in the Transaction Documents, including any exhibits or schedules thereto, and the statements made in the certificates of public officials, officers and representatives of the Company and others delivered to us, including the representation letters from the Company, Spinco and UWWH, dated June 11, 2014, and, with respect to any representations and	

					
International Paper Company	  	3	  	June 11, 2014	
 
 	warranties in any of the foregoing that are made “to the knowledge of” or “based on the belief” of the Company or any other person or are similarly qualified, we have assumed that such representations and warranties are accurate, in each case without such qualification.	
No assurance can be given as to the effect on this opinion if any of the foregoing assumptions is or becomes inaccurate.
Based on the foregoing and subject to the limitations, qualifications and assumptions set forth herein we are of the opinion that:
(1) the contribution by IP to Spinco of 100% of the membership interests in xpedx Intermediate in exchange for additional shares of Spinco Common Stock and receipt by IP of the special cash payment, followed by the distribution of Spinco Common Stock in the Distribution, will qualify as a reorganization within the meaning of Section 368(a)(1)(D) of the Code, and IP and Spinco will each be a party to a reorganization within the meaning of Section 368(b) of the Code;
(2) pursuant to Section 361 of the Code, no gain or loss will be recognized by IP on the contribution to Spinco of 100% of the membership interests in xpedx Intermediate, receipt of the special payment or distribution of the Spinco Common Stock in the Distribution (except that no opinion is expressed herein with respect to the Earnout Payment);
(3) pursuant to Section 355(a)(1) of the Code, no gain or loss will be recognized by the IP Stockholders on the receipt of Spinco Common Stock in the Distribution;
(4) each IP Stockholder’s holding period in the Spinco Common Stock received in the Distribution will include the holding period of the IP Common Stock held by such IP Stockholder;
(5) each IP Stockholder’s aggregate basis in its shares of IP Common Stock and Spinco Common Stock (including fractional shares) immediately after the Distribution will equal the aggregate basis of the IP Common Stock held by such IP Stockholder immediately before the Distribution, with such basis allocated between the IP Common Stock and Spinco Common Stock held by such IP Stockholder in proportion to their respective fair market values; and
(6) each IP Stockholder that receives cash in lieu of fractional shares will recognize gain or loss on such fractional shares computed based on the difference between the cash so received and such IP Stockholder’s basis in such fractional shares (computed as described in (5) above).

					
International Paper Company	  	4	  	June 11, 2014	
 
This opinion is based upon the Code, Treasury regulations (including proposed Treasury regulations) issued thereunder and administrative and judicial interpretations thereof, all as in effect on the date hereof. No assurance can be given that any of the foregoing authorities will not be modified, revoked, supplemented or overruled, possibly with retroactive effect, that the IRS will agree with this opinion or that, if the IRS were to take a contrary position, such position would not ultimately be sustained by the courts.
This opinion is limited to the matters specifically addressed herein and no other opinion is implied or may be inferred. Additional issues may exist that could affect the U.S. federal tax treatment of the Contribution and the Distribution. This opinion does not consider or provide a conclusion with respect to any such additional issues. With respect to any U.S. federal tax issues not addressed herein, this opinion was not written, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax law.
This opinion is rendered only as of the date hereof, and we assume no responsibility to advise you or any other person of facts, circumstances, changes in law, or other events or developments that hereafter may occur or be brought to our attention and that may affect the conclusions expressed herein.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the Prospectus forming a part thereof. In giving such consent, we do not concede that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the U.S. Securities and Exchange Commission thereunder.

Very truly yours,	
	
/s/ Debevoise & Plimpton LLP	
	
Debevoise & Plimpton LLP	

Exhibit 8.2
[Letterhead of Kirkland & Ellis LLP]
June 11, 2014
UWW Holdings, Inc.
6600 Governors Lake Parkway
Norcross, GA 30071
Ladies and Gentlemen:
We have acted as counsel to UWW Holdings, Inc., a Delaware corporation (“ UWWH ”), in connection with (i) the proposed merger of UWWH with and into Veritiv Corporation, a Delaware corporation (“ SpinCo ”), with SpinCo continuing as the surviving corporation (the “ Merger ”), occurring pursuant to the Agreement and Plan of Merger, dated January 28, 2014 (the “ Merger Agreement ”), by and among International Paper Company, a New York corporation (“ IP ”), SpinCo, a direct, wholly-owned subsidiary of IP, xpedx Intermediate, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of IP (“ xpedx Intermediate ”), xpedx, LLC, a New York limited liability company and a direct, wholly-owned subsidiary of IP (“ xpedx ”), UWW Holdings, LLC, a Delaware limited liability company (the “ UWWH Stockholder ”), UWWH, a direct, wholly-owned subsidiary of the UWWH Stockholder, and Unisource Worldwide, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of UWWH (“ Unisource ”), and (ii) immediately following the Merger, the proposed merger of xpedx Intermediate with and into Unisource, with Unisource as the surviving corporation (the “ Subsidiary Merger ”), occurring pursuant to the Merger Agreement. Prior to consummating the Merger and pursuant to the Contribution and Distribution Agreement, dated January 28, 2014 (the “ Distribution Agreement ”), by and among IP, SpinCo, UWWH and the UWWH Stockholder, IP will transfer certain assets to a subsidiary of SpinCo and subsequently distribute all of the shares of SpinCo Common Stock outstanding prior to the Merger to holders of IP Common Stock on a pro rata basis (the foregoing transactions and the other transactions contemplated by the Merger Agreement and the Distribution Agreement, the “ Transactions ”). At your request, and in connection with the effectiveness of the registration statement on Form S -1 relating to the Transactions (as amended or supplemented through the date hereof, the “ Registration Statement ”), we are rendering our opinion concerning certain U.S. federal income tax consequences of the Merger and the Subsidiary Merger. Capitalized terms not otherwise defined herein shall have the same meanings as set forth in the Merger Agreement and any reference herein to any document includes a reference to any exhibit, appendix, or similar attachment thereto.
In providing our opinion, we have examined the Merger Agreement, the Distribution Agreement, the other Transaction Agreements, a partially redacted version of the ruling request, which was filed with the Internal Revenue Service on August 23, 2013 in connection with the Transactions, and all versions of supplemental submissions filed in connection therewith (together, the “ IRS Ruling Request ”), the Registration Statement, and such other documents, records and papers as we have deemed necessary or appropriate in order to give the opinions set forth herein. In addition, we have assumed that: (i) the Transactions and related transactions will be consummated in accordance with the provisions of the Merger Agreement, the Distribution Agreement and the other Transaction Agreements and as described in the Registration Statement and the IRS Ruling Request (and no covenants or conditions described therein

UWWH Holdings, Inc.
June 11, 2014
Page 2
and affecting this opinion will be waived or modified), (ii) the statements and facts concerning the Transactions and the parties thereto set forth in the Merger Agreement, the Distribution Agreement, the other Transaction Agreements, the Registration Statement and the IRS Ruling Request are true, complete and correct, (iii) the statements and representations (which statements and representations we have neither investigated nor verified) made by UWWH, SpinCo and IP in their respective representation letters, dated as of the date hereof and delivered to us for purposes of this opinion, are true, complete, and correct as of the date hereof and will remain true, complete, and correct at all times up to and including the Effective Time, (iv) all statements and representations qualified by knowledge, belief or materiality or comparable qualification are and will be true, complete and correct as if made without such qualification, (v) all documents submitted to us as originals are authentic, all documents submitted to us as copies conform to the originals, all relevant documents have been or will be duly executed in the form presented to us and that all natural persons are of legal capacity, (vi) UWWH, Spinco, IP and their respective subsidiaries will treat the Transactions and certain related transactions for United States federal income tax purposes in a manner consistent with the opinion set forth below, and (vii) all applicable reporting requirements have been or will be satisfied. If any of the above described assumptions is untrue for any reason, or if the Transactions are consummated in a manner that is different from the manner described in the Merger Agreement, the Distribution Agreement, the other Transaction Agreements, the Registration Statement and the IRS Ruling Request, our opinion as expressed below may be adversely affected.
Based upon and subject to the foregoing, and based upon the Internal Revenue Code of 1986, as amended (the “ Code ”), the Treasury regulations promulgated thereunder, judicial decisions, revenue rulings and revenue procedures of the Internal Revenue Service (the “ IRS ”), and other administrative pronouncements, all as in effect on the date hereof, it is our opinion that for U.S. federal income tax purposes:
 
1.	The Merger will constitute a reorganization within the meaning of Section 368(a) of the Code and SpinCo and UWWH will each be a party to a reorganization within the meaning of Section 368(b) of the Code.	
 
2.	No gain or loss will be recognized by UWWH on the transfer of its assets to SpinCo and SpinCo’s assumption of UWWH’s liabilities pursuant to the Merger.	
 
3.	The Subsidiary Merger will qualify as a transfer of property to Unisource under Section 351(a) of the Code.	
 
4.	No gain or loss will be recognized by SpinCo on the transfer of xpedx Intermediate’s assets to Unisource and Unisource’s assumption of xpedx Intermediate’s liabilities pursuant to the Subsidiary Merger.	
We express no opinion on any issue or matter relating to the tax consequences of the transactions contemplated by the Merger Agreement, the Distribution Agreement, the other Transaction Agreements, the Registration Statement or the IRS Ruling Request other than the opinion set forth above. Our opinion is based on current current U.S. federal income tax law and administrative practice, any of which may be changed at any time with retroactive effect. Any change in applicable laws or the facts and circumstances surrounding the Transactions and certain related transactions, or any inaccuracy in the statements, facts, assumptions or representations upon which we have relied, may affect the continuing validity of our opinion as set forth herein. We assume no responsibility to inform UWWH of any such change or inaccuracy that may occur or come to our attention.

UWWH Holdings, Inc.
June 11, 2014
Page 3
We are furnishing this opinion solely in connection with the filing of the Registration Statement. We hereby consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement, and to the references therein to us. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended.
Sincerely,
/s/ Kirkland & Ellis LLP
Kirkland & Ellis LLP

Exhibit 10.5
$1,400,000,000
FORM OF ABL CREDIT AGREEMENT
among
XPEDX INTERMEDIATE, LLC,
(which on the Effective Date shall be merged with and into Unisource Worldwide, Inc.,
with Unisource Worldwide, Inc. surviving such merger),
as the Parent Borrower,
THE OTHER BORROWERS
FROM TIME TO TIME PARTY HERETO,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO,
BANK OF AMERICA, N.A.,
as Administrative Agent and ABL Collateral Agent,
WELLS FARGO BANK, N.A.
and
SUNTRUST BANK,
as Co-Syndication Agents,
HSBC BANK USA, NATIONAL ASSOCIATION,
REGIONS BANK
and
RBS CITIZENS BUSINESS CAPITAL,
as Co-Documentation Agents,
BANK OF AMERICA, N.A.,
as Issuing Lender,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
WELLS FARGO BANK, N.A.
and
SUNTRUST ROBINSON HUMPHREY, INC.,
as Joint Lead Arrangers
and Joint Bookrunners
and
HSBC BANK USA, NATIONAL ASSOCIATION,
REGIONS BUSINESS CAPITAL, A DIVISION OF REGIONS BANK,
RBS CITIZENS, NA
and
[ — ],
as Joint Bookrunners
Dated as of July [ — ], 2014

TABLE OF CONTENTS

SECTION 1.	 	DEFINITIONS	  	 	2	  	
1.1	 	Defined Terms	  	 	2	  	
1.2	 	Other Definitional Provisions	  	 	85	  	
1.3	 	Accounting Terms	  	 	87	  	
1.4	 	Exchange Rates; Currency Equivalents; Borrowing Base	  	 	87	  	
			
SECTION 2.	 	AMOUNT AND TERMS OF COMMITMENTS	  	 	88	  	
2.1	 	Commitments	  	 	88	  	
2.2	 	Procedure for Revolving Credit Borrowing	  	 	93	  	
2.3	 	Termination or Reduction of Commitments	  	 	94	  	
2.4	 	Swing Line Commitments	  	 	97	  	
2.5	 	Record of Loans	  	 	101	  	
2.6	 	Incremental Facility	  	 	102	  	
2.7	 	Extension Amendments	  	 	107	  	
			
SECTION 3.	 	LETTERS OF CREDIT	  	 	111	  	
3.1	 	L/C Commitment	  	 	111	  	
3.2	 	Procedure for Issuance of Letters of Credit	  	 	113	  	
3.3	 	Fees, Commissions and Other Charges	  	 	114	  	
3.4	 	L/C Participations	  	 	115	  	
3.5	 	Reimbursement Obligation of the Borrowers	  	 	116	  	
3.6	 	Obligations Absolute	  	 	117	  	
3.7	 	Letter of Credit Payments	  	 	118	  	
3.8	 	Letter of Credit Request	  	 	118	  	
3.9	 	Additional Issuing Lenders	  	 	118	  	
3.10	 	Replacement of Issuing Lender	  	 	119	  	
			
SECTION 4.	 	GENERAL PROVISIONS	  	 	119	  	
4.1	 	Interest Rates and Payment Dates	  	 	119	  	
4.2	 	Conversion and Continuation Options	  	 	121	  	
4.3	 	Minimum Amounts of Sets	  	 	122	  	
4.4	 	Prepayments	  	 	122	  	
4.5	 	Administrative Agent’s Fees; Other Fees	  	 	126	  	
4.6	 	Computation of Interest and Fees	  	 	127	  	
4.7	 	Inability to Determine Interest Rate	  	 	127	  	
4.8	 	Pro Rata Treatment and Payments	  	 	128	  	
4.9	 	Illegality	  	 	130	  	
4.10	 	Requirements of Law	  	 	131	  	
4.11	 	Taxes	  	 	134	  	
4.12	 	Indemnity	  	 	137	  	
4.13	 	Certain Rules Relating to the Payment of Additional Amounts	  	 	138	  	
4.14	 	Controls on Prepayment if Aggregate Outstanding Revolving Credit Exceeds Aggregate Commitments	  	 	140	  	
4.15	 	Canadian Facility Lenders	  	 	140	  	
4.16	 	Cash Receipts	  	 	141	  	
4.17	 	Defaulting Lenders	  	 	146	  	
 
i

							
SECTION 5.	 	REPRESENTATIONS AND WARRANTIES	  	 	149	  	
5.1	 	Financial Condition	  	 	149	  	
5.2	 	Solvent; No Material Adverse Effect	  	 	150	  	
5.3	 	Corporate Existence; Compliance with Law	  	 	150	  	
5.4	 	Corporate Power; Authorization; Enforceable Obligations	  	 	150	  	
5.5	 	No Legal Bar	  	 	151	  	
5.6	 	No Material Litigation	  	 	151	  	
5.7	 	No Default	  	 	151	  	
5.8	 	Ownership of Property	  	 	151	  	
5.9	 	Intellectual Property	  	 	151	  	
5.10	 	Taxes	  	 	152	  	
5.11	 	Federal Regulations	  	 	152	  	
5.12	 	ERISA; Canadian Pension Plans	  	 	152	  	
5.13	 	Collateral	  	 	153	  	
5.14	 	Investment Company Act	  	 	154	  	
5.15	 	Subsidiaries	  	 	154	  	
5.16	 	Purpose of Loans	  	 	154	  	
5.17	 	Environmental Matters	  	 	155	  	
5.18	 	No Material Misstatements	  	 	155	  	
5.19	 	Anti-Terrorism	  	 	156	  	
5.20	 	Eligibility	  	 	156	  	
			
SECTION 6.	 	CONDITIONS PRECEDENT	  	 	156	  	
6.1	 	Conditions to Effectiveness and Initial Extension of Credit	  	 	156	  	
6.2	 	Conditions Precedent to Each Other Extension of Credit and Letter of Credit Issuance	  	 	161	  	
			
SECTION 7.	 	AFFIRMATIVE COVENANTS	  	 	162	  	
7.1	 	Financial Statements	  	 	162	  	
7.2	 	Certificates; Other Information	  	 	163	  	
7.3	 	Payment of Taxes	  	 	166	  	
7.4	 	Maintenance of Existence	  	 	166	  	
7.5	 	Maintenance of Property; Insurance	  	 	166	  	
7.6	 	Inspection of Property; Discussions	  	 	167	  	
7.7	 	Notices	  	 	168	  	
7.8	 	Compliance with Environmental Laws	  	 	170	  	
7.9	 	After-Acquired Real Property and Fixtures; Addition of Subsidiaries	  	 	170	  	
7.10	 	Maintenance of New York Process Agent	  	 	174	  	
7.11	 	Post-Closing Security Perfection	  	 	174	  	
			
SECTION 8.	 	NEGATIVE COVENANTS	  	 	174	  	
8.1	 	Limitation on Indebtedness	  	 	174	  	
8.2	 	Limitation on Liens	  	 	180	  	
8.3	 	Limitation on Fundamental Changes	  	 	184	  	
8.4	 	[Reserved]	  	 	185	  	
 
ii

							
8.5	 	Limitation on Dividends, Acquisitions and Other Restricted Payments	  	 	185	  	
8.6	 	Limitation on Transactions with Affiliates	  	 	190	  	
8.7	 	Limitations on Changes in Nature of Business	  	 	192	  	
8.8	 	Limitations on Negative Pledge Clauses	  	 	192	  	
8.9	 	Minimum Consolidated Fixed Charge Coverage Ratio Covenant	  	 	195	  	
8.10	 	Passive Holding Company Status	  	 	195	  	
8.11	 	Canadian Pension Plans	  	 	196	  	
			
SECTION 9.	 	EVENTS OF DEFAULT	  	 	196	  	
			
SECTION 10.	 	THE AGENTS AND THE OTHER REPRESENTATIVES	  	 	201	  	
10.1	 	Appointment	  	 	201	  	
10.2	 	Delegation of Duties	  	 	203	  	
10.3	 	Exculpatory Provisions	  	 	203	  	
10.4	 	Reliance by the Administrative Agent	  	 	203	  	
10.5	 	Notice of Default	  	 	204	  	
10.6	 	Acknowledgement and Representations by Lenders	  	 	204	  	
10.7	 	Indemnification	  	 	205	  	
10.8	 	The Agents and Other Representatives in Their Individual Capacity	  	 	206	  	
10.9	 	Right to Request and Act on Instructions	  	 	206	  	
10.10	 	Successor Agent	  	 	209	  	
10.11	 	Other Representatives	  	 	210	  	
10.12	 	Swing Line Lender	  	 	210	  	
10.13	 	Withholding Tax	  	 	210	  	
10.14	 	Approved Electronic Communications	  	 	210	  	
10.15	 	Appointment of Borrower Representative	  	 	211	  	
10.16	 	Reports	  	 	211	  	
10.17	 	Application of Proceeds	  	 	212	  	
10.18	 	Bank Product Providers	  	 	214	  	
			
SECTION 11.	 	MISCELLANEOUS	  	 	214	  	
11.1	 	Amendments and Waivers	  	 	214	  	
11.2	 	Notices	  	 	219	  	
11.3	 	No Waiver; Cumulative Remedies	  	 	220	  	
11.4	 	Survival of Representations and Warranties	  	 	221	  	
11.5	 	Payment of Expenses and Taxes	  	 	221	  	
11.6	 	Successors and Assigns; Participations and Assignments	  	 	222	  	
11.7	 	Adjustments; Set-off; Calculations; Computations	  	 	229	  	
11.8	 	Judgment	  	 	230	  	
11.9	 	Counterparts	  	 	231	  	
11.10	 	Severability	  	 	231	  	
11.11	 	Integration	  	 	231	  	
11.12	 	GOVERNING LAW	  	 	231	  	
11.13	 	Submission to Jurisdiction; Waivers	  	 	231	  	
11.14	 	Acknowledgements	  	 	233	  	
11.15	 	WAIVER OF JURY TRIAL	  	 	233	  	
11.16	 	Confidentiality	  	 	233	  	
 
iii

							
11.17	 	Incremental Indebtedness; Additional Obligations	  	 	234	  	
11.18	 	USA Patriot Act Notice	  	 	235	  	
11.19	 	Joint and Several Liability; Postponement of Subrogation	  	 	235	  	
11.20	 	Language	  	 	236	  	
11.21	 	Canadian Anti-Money Laundering Legislation	  	 	236	  	
 
iv

SCHEDULES

A	  	Commitments and Addresses	
1.1C	  	Credit Card Issuers and Processors	
1.1E	  	Existing Letters of Credit	
1.1P	  	Investments	
1.1T	  	Transaction Agreements	
4.16	  	DDAs	
5.4	  	Consents Required	
5.6	  	Litigation	
5.8	  	Mortgaged Properties	
5.12	  	Canadian Pension Plans	
5.15	  	Subsidiaries	
5.17	  	Environmental Matters	
7.2	  	Website Address for Electronic Reporting	
7.11	  	Security Perfection	
8.1	  	Indebtedness	
8.2	  	Liens	
8.6	  	Affiliate Transactions	
8.10	  	Holding Agreements	
EXHIBITS

A	  	Form of Assignment and Acceptance	
B	  	Form of Joinder Agreement	
C	  	Form of U.S. Guarantee and Collateral Agreement	
D-1	  	Form of Canadian Guarantee and Collateral Agreement	
D-2	  	Form of Quebec Security Documents	
E	  	Form of Base Intercreditor Agreement	
F-1	  	Form of Borrowing Request	
F-2	  	Form of Letter of Credit Request	
G	  	Form of Mortgage	
H	  	Form of Swing Line Loan Participation Certificate	
I-1	  	Form of Revolving Note	
I-2	  	Form of Swing Line Note	
J	  	Form of U.S. Tax Compliance Certificate	
K	  	Form of Solvency Certificate	
L	  	Form of Officer’s Certificate	
M	  	Form of Secretary’s Certificate	
N	  	Form of Borrowing Base Certificate	
O	  	Form of Lender Joinder Agreement	
P	  	Form of Collateral Access Agreement	
 
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ABL CREDIT AGREEMENT, dated as of July [ — ], 2014, among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 , the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company and a direct, wholly-owned Subsidiary of International Paper (the “ OpCo Borrower ”), and each Subsidiary Borrower of the Parent Borrower party hereto from time to time (as further defined in subsection 1.1 , and, together with the Parent Borrower, the OpCo Borrower and the Canadian Borrower, being collectively referred to herein as the “ Borrowers ” and each being individually referred to as a “ Borrower ”), the several banks and other financial institutions from time to time party to this Agreement (as further defined in subsection 1.1 , the “ Lenders ”), Bank of America, N.A., as administrative agent and collateral agent for the Lenders hereunder (in such capacities, respectively, the “ Administrative Agent ” and the “ ABL Collateral Agent ”), Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender (in such capacities, respectively, and as further defined in subsection 1.1 , a “ U.S. Facility Issuing Lender ” and a “ Canadian Facility Issuing Lender ”), Wells Fargo Bank, N.A. and SunTrust Bank, as co-syndication agents, and the institutions set forth on the cover page hereto, as co-documentation agents.
The parties hereto hereby agree as follows:
W I T N E S S E T H :
WHEREAS, each of International Paper Company, a New York corporation (“ International Paper ”), xpedx Holding Company, a Delaware corporation and a direct, wholly-owned Subsidiary of International Paper (together with any successor in interest thereto, “ Spinco ”), the Parent Borrower, the OpCo Borrower, UWW Holdings, LLC, a Delaware limited liability company (together with any successor in interest thereto, the “ Holding Parent ”), UWW Holdings, Inc., a Delaware corporation and a direct, wholly-owned Subsidiary of the Holding Parent (together with any successor in interest thereto, “ UWWH ”), and Unisource Worldwide, Inc., a Delaware corporation and a direct, wholly-owned Subsidiary of UWWH (together with any successor in interest thereto, “ Unisource ”) has entered into that certain Agreement and Plan of Merger, dated as of January 28, 2014 (the “ Merger Agreement ”), pursuant to which each party has agreed to enter into the Transactions as set forth therein;
WHEREAS, each of International Paper, Spinco, UWWH and the Holding Parent has entered into that certain Contribution and Distribution Agreement, dated as of January 28, 2014 (the “ Contribution Agreement ”), pursuant to which International Paper will contribute certain assets relating to the xpedx business to Spinco and Spinco will make certain payments to International Paper;
WHEREAS, to finance the payments under the Contribution Agreement, to refinance certain indebtedness of Unisource and for working capital and other general corporate purposes, the parties hereto have requested the Lenders ( a ) to extend credit in the form of Revolving Credit Loans at any time and from time to time prior to the Maturity Date, in an aggregate principal amount at any time outstanding not in excess of $1,400,000,000 and ( b ) to issue and participate in the Letters of Credit provided for herein to each of the Borrowers hereunder.

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereto agree as follows:
 
SECTION 1.	DEFINITIONS .	
1.1 Defined Terms . As used in this Agreement, the following terms shall have the following meanings:
“ 10% Trigger ”: an amount equal to the greater of ( i ) 10% of the Maximum Borrowing Amount and (ii) $90,000,000.
“ 15% Trigger ”: an amount equal to the greater of ( i ) 15% of the Maximum Borrowing Amount and (ii) $135,000,000.
“ ABL Collateral Agent ”: as defined in the preamble hereto and shall include any successor to the ABL Collateral Agent appointed pursuant to subsection 10.10 .
“ ABL Commitments ”: at any time, the sum of the U.S. Facility Commitments and the Canadian Facility Commitments, in each case at such time. The original aggregate ABL Commitment amount is $1,400,000,000.
“ ABL Facility ”: the collective reference to the Commitments and the Loans made hereunder, this Agreement, any Loan Documents, any notes and letters of credit issued pursuant hereto and any guarantee and collateral agreements, pledge agreements, intellectual property security agreements, mortgages, letter of credit applications and other guarantees, security agreements, deeds of hypothec and collateral documents, and other instruments and documents, executed and delivered pursuant to or in connection with any of the foregoing, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under this Agreement or one or more other credit agreements, indentures or financing agreements or otherwise, unless such agreement, instrument or document expressly provides that it is not intended to be and is not an ABL Facility hereunder). Without limiting the generality of the foregoing, the term “ABL Facility” shall include any agreement (i) changing the maturity of any Indebtedness Incurred thereunder or contemplated thereby, ( ii ) adding Subsidiaries of the Parent Borrower as additional borrowers or guarantors thereunder, ( iii ) increasing the amount of Indebtedness Incurred thereunder or available to be borrowed thereunder or ( iv ) otherwise altering the terms and conditions thereof.
“ ABL Priority Collateral ”: as defined in the Base Intercreditor Agreement.
“ ABR ”: for any day, a rate per annum (rounded upwards, if necessary, to the next 1/100 of 1.0%) equal to the greatest of ( a ) the Prime Rate for such day, ( b ) the Federal Funds Effective Rate for such day plus 0.50% or ( c ) the Eurocurrency Rate for a 30-day interest period as of such day, plus 1.0%. “ Prime Rate ” shall mean the rate of interest announced by Bank of America, N.A. from time to time as its prime rate. Such rate is set by Bank of America, N.A. on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate publicly announced by Bank of America, N.A. shall take effect at the opening of business on the day specified in the announcement.
 
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“ ABR Loans ”: Loans the rate of interest applicable to which is based upon, ( a ) with respect to U.S. Facility Revolving Credit Loans denominated in Dollars, the ABR, ( b ) with respect to Canadian Facility Revolving Credit Loans denominated in Canadian Dollars, the Canadian Prime Rate, or, ( c ) with respect to Canadian Facility Revolving Credit Loans denominated in Dollars, the Canadian Base Rate.
“ Acceleration ”: as defined in subsection 9(e) .
“ Account Debtor ”: “account debtor” as defined in Article 9 of the UCC or (to the extent governed thereby) any similar provision of the PPSA.
“ Accounts ”: as defined in the UCC or (to the extent governed thereby) the PPSA as in effect from time to time or (to the extent governed by the Civil Code of Québec ) defined as all “claims” for the purposes of the Civil Code of Québec ; and, with respect to any Person, all such Accounts of such Person, whether now existing or existing in the future, including ( a ) all accounts receivable of such Person (whether or not specifically listed on schedules furnished to the Administrative Agent), including all accounts created by or arising from all of such Person’s sales of goods or rendition of services made under any of its trade names, or through any of its divisions, ( b ) all unpaid rights of such Person (including rescission, replevin, reclamation and stopping in transit) relating to the foregoing or arising therefrom, ( c ) all rights to any goods represented by any of the foregoing, including returned or repossessed goods, ( d ) all reserves and credit balances held by such Person with respect to any such accounts receivable of any Obligors, ( e ) all letters of credit, guarantees or collateral for any of the foregoing and ( f ) all insurance policies or rights relating to any of the foregoing.
“ Acquired Indebtedness ”: Indebtedness of a Person ( i ) existing at the time such Person becomes a Subsidiary or ( ii ) assumed in connection with the acquisition of assets from such Person, in each case other than Indebtedness Incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to be Incurred on the date of the related acquisition of assets from any Person or the date the acquired Person becomes a Subsidiary.
“ Acquisition Consideration ”: the purchase consideration for any acquisition and all other payments by the Parent Borrower or any of its Restricted Subsidiaries in exchange for, or as part of, or in connection with, any acquisition, consisting of cash or by exchange of property (other than Capital Stock of Holding or any Parent) or the assumption of Indebtedness payable at or prior to the consummation of such acquisition or deferred for payment at any future time ( provided that any such future payment is not subject to the occurrence of any contingency unless and until payment is made in respect thereof). For purposes of the foregoing, any Acquisition Consideration consisting of property shall be valued at the Fair Market Value thereof.
“ Additional Lender ”: as defined in subsection 2.6(a) .
“ Additional Obligations ”: as defined in the applicable Intercreditor Agreement.
 
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“ Adjustment Date ”: initially, the first day of the first month beginning after the date that is the three-month anniversary of the Closing Date and, thereafter, the first day of the first month following receipt by the Lenders of the Borrowing Base Certificate required to be delivered pursuant to subsection 7.2(f) for the last month of the most recently completed full fiscal quarter of the Parent Borrower.
“ Administrative Agent ”: as defined in the preamble hereto and shall include any successor to the Administrative Agent appointed pursuant to subsection 10.10 .
“ Affected BA Rate ”: as defined in subsection 4.7 .
“ Affected Eurocurrency Rate ”: as defined in subsection 4.7 .
“ Affected Loans ”: as defined in subsection 4.9 .
“ Affiliate ”: with respect to any specified Person, any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “ control ” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.
“ Agent Advance ”: as defined in subsection 2.1(d) .
“ Agent Advance Period ”: as defined in subsection 2.1(d) .
“ Agent-Related Distress Event ”: with respect to any Agent (each, for purposes of this definition, a “ Distressed Person ”), a voluntary or involuntary case with respect to such Distressed Person under any debt relief law, or a custodian, conservator, receiver, interim receiver, trustee, monitor or similar official is appointed for such Distressed Person or any substantial part of such Distressed Person’s assets, or such Distressed Person makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any Governmental Authority having regulatory authority over such Distressed Person to be, insolvent or bankrupt; provided that an Agent-Related Distress Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any equity interests in any Agent or any person that directly or indirectly controls such Agent by a Governmental Authority or an instrumentality thereof.
“ Agents ”: the collective reference to the Administrative Agent and the ABL Collateral Agent.
“ Aggregate Canadian Borrower Credit Extensions ”: at any time, an amount equal to the sum of the Aggregate Tranche A Canadian Borrower Credit Extensions and the Aggregate Tranche A-1 Canadian Borrower Credit Extensions, in each case as at such time.
“ Aggregate Credit Extensions ”: at any time, an amount equal to the sum of the Aggregate Tranche A U.S. Borrower Credit Extensions, the Aggregate Tranche A-1 U.S. Borrower Credit Extensions, the Aggregate Tranche A Canadian Borrower Credit Extensions and the Aggregate Tranche A-1 Canadian Borrower Credit Extensions, in each case as at such time.
 
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“ Aggregate Tranche A Canadian Borrower Credit Extensions ”: at any time, an amount equal to the Dollar Equivalent of the sum of ( a ) the Canadian Facility L/C Obligations and ( b ) the outstanding principal amount of Tranche A Canadian Facility Revolving Credit Loans (including Agent Advances, if any, made as Tranche A Canadian Facility Revolving Credit Loans) to the Canadian Borrower, in each case as at such time.
“ Aggregate Tranche A Canadian Facility Commitment ”: at any time, the aggregate Tranche A Canadian Facility Commitments of all Tranche A Canadian Facility Lenders at such time. The original amount of the Aggregate Tranche A Canadian Facility Commitments is $[ — ].
“ Aggregate Tranche A Canadian Facility Lender Exposure ”: at any time, an amount equal to the aggregate Tranche A Canadian Facility Lender Exposure of all Tranche A Canadian Facility Lenders at such time.
“ Aggregate Tranche A U.S. Borrower Credit Extensions ”: at any time, an amount equal to the sum of ( a ) the Aggregate Tranche A U.S. Facility Extensions and ( b ) if greater than zero, the difference between ( x ) the Aggregate Tranche A Canadian Borrower Credit Extensions to, or for the account of, the Canadian Borrower and ( y ) the Dollar Equivalent of the Tranche A Canadian Borrowing Base, in each case at such time.
“ Aggregate Tranche A U.S. Facility Commitment ”: at any time, the aggregate Tranche A U.S. Facility Commitments of all Tranche A U.S. Facility Lenders at such time. The original amount of the Aggregate Tranche A U.S. Facility Commitments is $[ — ].
“ Aggregate Tranche A U.S. Facility Extensions ”: at any time, an amount equal to the sum of ( a ) the U.S. Facility L/C Obligations, ( b ) the outstanding principal amount of Tranche A U.S. Facility Revolving Credit Loans (including Agent Advances, if any, made as Tranche A U.S. Facility Revolving Credit Loans) to the U.S. Borrowers, ( c ) the outstanding principal amount of Canadian Facility Revolving Credit Loans to the U.S. Borrowers and ( d ) the outstanding principal amount of Swing Line Loans, in each case as at such time.
“ Aggregate Tranche A U.S. Facility Lender Exposure ”: at any time, the aggregate Tranche A U.S. Facility Lender Exposure of all Tranche A U.S. Facility Lenders at such time.
“ Aggregate Tranche A-1 Canadian Borrower Credit Extensions ”: at any time, an amount equal to the Dollar Equivalent of the outstanding principal amount of Tranche A-1 Canadian Facility Revolving Credit Loans to the Canadian Borrower, in each case as at such time.
“ Aggregate Tranche A-1 Canadian Facility Commitment ”: at any time, the aggregate Tranche A-1 Canadian Facility Commitments of all Tranche A-1 Canadian Facility Lenders at such time. The original amount of the Aggregate Tranche A-1 Canadian Facility Commitments is $[ — ].
 
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“ Aggregate Tranche A-1 Canadian Facility Lender Exposure ”: at any time, the aggregate Tranche A-1 Canadian Facility Lender Exposure of all Tranche A-1 Canadian Facility Lenders at such time.
“ Aggregate Tranche A-1 U.S. Borrower Credit Extensions ”: at any time, an amount equal to the outstanding principal amount of Tranche A-1 U.S. Facility Revolving Credit Loans to the U.S. Borrowers at such time.
“ Aggregate Tranche A-1 U.S. Facility Commitment ”: at any time, the aggregate Tranche A-1 U.S. Facility Commitments of all Tranche A-1 U.S. Facility Lenders at such time. The original amount of the Aggregate Tranche A-1 U.S. Facility Commitments is $[ — ].
“ Aggregate Tranche A-1 U.S. Facility Lender Exposure ”: at any time, the aggregate Tranche A-1 U.S. Facility Lender Exposure of all Tranche A-1 U.S. Facility Lenders at such time.
“ Aggregate U.S. Borrower Credit Extensions ”: at any time, an amount equal to the sum of the Aggregate Tranche A U.S. Borrower Credit Extensions and the Aggregate Tranche A-1 U.S. Borrower Credit Extensions, in each case as at such time.
“ Agreement ”: this ABL Credit Agreement, as amended, supplemented, waived or otherwise modified from time to time.
“ AML Legislation ”: as defined in subsection 11.21 .
“ Applicable Margin ”: during the period from the Closing Date until the initial Adjustment Date, at the option of the applicable Borrower, (x) in the case of Dollar denominated loans, Eurocurrency Rate, ABR or Canadian Base Rate and (y) in the case of Canadian Dollar denominated loans, the Canadian Prime Rate or the BA Rate, in each case plus the interest margin applicable thereto at Level II set forth below. From and after the initial Adjustment Date and on each subsequent Adjustment Date, the foregoing interest margins will be subject to a pricing grid based on average daily Excess Availability for the previous fiscal quarter, as set forth below:
Applicable Margin

Level	  	Excess
Availability
as a
percentage of
the Maximum
Borrowing
Amount	  	Tranche A
ABR,
Canadian
Base Rate and
Canadian
Prime Rate	 	 	Tranche A
Eurocurrency
Rate and BA
Rate	 	 	Tranche A-1
ABR,
Canadian
Base Rate and
Canadian
Prime Rate	 	 	Tranche A-1
Eurocurrency
Rate and BA
Rate	 	
						
I	  	Greater than 66.6%	  	 	0.25	% 	 	 	1.25	% 	 	 	1.50	% 	 	 	2.50	% 	
II	  	Less than or equal to 66.6% but greater than 33.3%	  	 	0.50	% 	 	 	1.50	% 	 	 	1.75	% 	 	 	2.75	% 	
III	  	Less than or equal to 33.3%	  	 	0.75	% 	 	 	1.75	% 	 	 	2.00	% 	 	 	3.00	% 	
 
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Each change in the Applicable Margin resulting from a change in average daily Excess Availability percentage for the most recent fiscal quarter ended immediately preceding the first day of a fiscal quarter shall be effective with respect to all Loans and Letters of Credit outstanding on and after such first day of such fiscal quarter.
“ Approved Electronic Communications ”: each notice, demand, communication, information, document and other material that any Loan Party is obligated to, or otherwise chooses to, provide to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein, including ( a ) any supplement, joinder or amendment to the Security Documents and any other written communication delivered or required to be delivered in respect of any Loan Document or the transactions contemplated therein and ( b ) any financial statement, financial and other report, notice, request, certificate and other information material; provided that “Approved Electronic Communications” shall exclude ( i ) any notice pursuant to subsection 4.4 and ( ii ) all notices of any Default.
“ Approved Electronic Platform ”: as defined in subsection 10.14 .
“ Approved Fund ”: as defined in subsection 11.6(b)(iii) .
“ Assignee ”: as defined in subsection 11.6(b)(i) .
“ Assignment and Acceptance ”: an Assignment and Acceptance, substantially in the form of Exhibit A .
“ Availability Reserves ”: without duplication of any other reserves or items that are otherwise addressed or excluded through eligibility criteria, subject to subsection 2.1(c) , ( a ) Bank Product Reserves and ( b ) such other reserves as the Administrative Agent in its Permitted Discretion determines as being appropriate to reflect any impediments to the realization upon the Collateral consisting of Eligible Accounts, Eligible Credit Card Receivables, Eligible In-Transit Inventory, Eligible Letter of Credit Inventory or Eligible Inventory included in the Tranche A U.S. Borrowing Base or in the Tranche A Canadian Borrowing Base (including claims that the Administrative Agent determines will need to be satisfied in connection with the realization upon such Collateral).
 
7

“ Available Commitment ”: ( A ) as to any Tranche A Canadian Facility Lender at any time, an amount (not less than zero) equal to ( a ) the amount of its Tranche A Canadian Facility Commitment at such time minus ( b ) its Tranche A Canadian Facility Lender Exposure at such time, ( B ) as to any Tranche A-1 Canadian Facility Lender at any time, an amount (not less than zero) equal to ( a ) the amount of its Tranche A-1 Canadian Facility Commitment at such time minus ( b ) its Tranche A-1 Canadian Facility Lender Exposure at such time, ( C ) as to any Tranche A U.S. Facility Lender at any time, an amount (not less than zero) equal to ( a ) the amount of its Tranche A U.S. Facility Commitment at such time minus ( b ) its Tranche A U.S. Facility Lender Exposure at such time and ( D ) as to any Tranche A-1 U.S. Facility Lender at any time, an amount (not less than zero) equal to ( a ) the amount of its Tranche A-1 U.S. Facility Commitment at such time minus ( b ) its Tranche A-1 U.S. Facility Lender Exposure at such time; collectively, as to all the Lenders, the “Available Commitments.”
“ Available Equity Amount ”: as defined in subsection 8.5(a)(3)(B) .
“ Available Incremental Amount ”: on any date, without duplication, an amount equal to the difference between ( i ) $400,000,000 and ( ii ) the sum of the aggregate principal amount of all Incremental ABL Term Loans made plus all New Revolving Commitments and Incremental Revolving Commitments established in each case prior to such date pursuant to subsection 2.6 and that shall be outstanding as of such date (it being understood that any Incremental ABL Term Loans that shall be repaid, and any New Revolving Commitment or Incremental Revolving Commitment that shall be terminated, in connection with any proposed Incremental ABL Term Loans, New Revolving Commitment or Incremental Revolving Commitments shall not be deemed outstanding for purposes of this definition).
“ BA Equivalent Loan ”: any Loan in Canadian Dollars bearing interest at a rate determined by reference to the BA Rate in accordance with the provisions of Section 2 .
“ BA Rate ”: with respect to each Interest Period for a BA Equivalent Loan, the rate of interest per annum equal to the average rate applicable to Canadian Dollar bankers’ acceptances having an identical or comparable term as the proposed BA Equivalent Loan displayed and identified as such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuters Monitor Money Rates Service as at approximately 10:00 a.m. Toronto time on such day (or, if such day is not a Business Day, as of 10:00 a.m. Toronto time on the immediately preceding Business Day); provided that if such rate does not appear on the CDOR Page at such time on such date, the rate for such date will be the annual discount rate (rounded upward to the nearest whole multiple of 1/100 of 1.0%) as of 10:00 a.m. Toronto time on such day at which a Canadian chartered bank listed on Schedule 1 of the Bank Act (Canada) as selected by the Administrative Agent in consultation with the Borrower Representative is then offering to purchase Canadian Dollar bankers’ acceptances accepted by it having such specified term (or a term as closely as possible comparable to such specified term).
“ Bain Capital ”: Bain Capital, LLC and any legal successor thereto.
 
8

“ Bain Capital Investors ”: the collective reference to ( i ) Bain Capital, ( ii ) Bain Capital Fund VII, L. P. and any legal successor thereto, ( iii ) Bain Capital VII Coinvestment Fund, L.P. and any legal successor thereto and ( iv ) any Affiliate of any Bain Capital Investor, but not including any portfolio company of any Bain Capital Investor.
“ Bank Product ”: products, services or facilities extended to any Borrower or any other Loan Party under Bank Products Agreements, Interest Rate Agreements, Currency Agreements or Commodities Agreements.
“ Bank Product Reserve ”: at any time, the sum of ( i ) with respect to Qualified Secured Bank Product Obligations of the Loan Parties’ an amount equal to the Hedge Termination Value thereunder plus ( ii ) with respect to any other Secured Bank Product Obligations of the Loan Parties, reserves established by the Administrative Agent in its Permitted Discretion in consultation with the Borrower Representative to reflect the reasonably anticipated liabilities in respect of such other then outstanding Secured Bank Product Obligations of the Loan Parties and their Subsidiaries.
“ Bank Products Agreement ”: any agreement pursuant to which a bank or other financial institution agrees to provide ( a ) treasury services, ( b ) credit card, merchant card, purchasing card or stored value card services (including, without limitation, processing and other administrative services with respect thereto), ( c ) cash management services (including, without limitation, controlled disbursements, credit cards, credit card processing services, automated clearinghouse and other electronic funds transfer transactions, return items, netting, overdrafts, depository, lockbox, stop payment, information reporting, wire transfer and interstate depository network services) and ( d ) other similar banking products or services as may be requested by any Loan Party (for the avoidance of doubt, excluding letters of credit and loans except indebtedness arising from services described in items (a) through (c) of this definition).
“ Bank Products Obligations ”: of any Person means the Indebtedness and other obligations of a Loan Party pursuant to any Bank Products Agreement.
“ Base Intercreditor Agreement ”: an intercreditor agreement, substantially in the form of Exhibit E (with such changes as the Administrative Agent may deem reasonably necessary or advisable due to a change in applicable law), or in such other form as may be agreed between the ABL Collateral Agent and the Borrower Representative (and approved by the Required Lenders), in each case as the same may be amended, supplemented, waived or otherwise modified from time to time. Prior to execution of the Base Intercreditor Agreement, terms defined by reference to the Base Intercreditor Agreement shall have the meaning given to such term in the form attached hereto as Exhibit E.
“ Benefited Lender ”: as defined in subsection 11.7(a) .
“ Board ”: the Board of Governors of the Federal Reserve System.
“ Board of Directors ”: for any Person, the board of directors or other governing body of such Person or, if such Person does not have such a board of directors or other governing body and is owned or managed by a single entity, the Board of Directors of such entity, or, in either case, any committee thereof duly authorized to act on behalf of such Board of Directors. Unless otherwise provided, “Board of Directors” means the Board of Directors of the Parent Borrower.
 
9

“ Borrower ”: as defined in the preamble hereto.
“ Borrower Representative ”: as defined in subsection 10.15 .
“ Borrowing ”: the borrowing of one Type of Loan of a single Tranche by either the U.S. Borrowers (on a joint and several basis) or the Canadian Borrower, from all the Lenders having Commitments of the respective Tranche on a given date (or resulting from a conversion or conversions on such date), having in the case of Eurocurrency Loans and BA Equivalent Loans the same Interest Period.
“ Borrowing Base ”: at any time, an amount equal to the sum of the Tranche A Canadian Borrowing Base, the Tranche A-1 Canadian Borrowing Base, the Tranche A U.S. Borrowing Base and the Tranche A-1 U.S. Borrowing Base, in each case at such time.
“ Borrowing Base Certificate ”: as defined in subsection 7.2(f) .
“ Borrowing Date ”: any Business Day specified in a notice pursuant to subsection 2.2 , 2.4 or 3.2 as a date on which the Borrower Representative requests the Lenders to make Loans hereunder or an Issuing Lender to issue Letters of Credit hereunder.
“ Borrowing Request ”: as defined in subsection 2.2 .
“ Business ”: ( i ) the distribution and sale of, and services relating to, products and equipment, including paper products, packaging products and equipment, facility supplies products and equipment, packaging design, packaging manufacturing, third-party logistics, distribution consulting, software and electronic marketing services, and ( ii ) any other operations or activities conducted by Holding, UWWH, or any of their respective Subsidiaries as of the Closing Date.
“ Business Day ”: a day other than a Saturday, Sunday or other day on which commercial banks in the City of New York (or ( x ) with respect only to Loans made by a Canadian Facility Lender and Canadian Facility Letters of Credit issued by a Canadian Facility Issuing Lender, Toronto, Canada and ( y ) with respect only to U.S. Facility Letters of Credit issued by a U.S. Facility Issuing Lender not located in the City of New York, the location of such Issuing Lender) are authorized or required by law to close in the City of New York, except that, when used in connection with a Eurocurrency Loan, “Business Day” shall mean, in the case of any Eurocurrency Loan, any Business Day on which dealings in Dollars between banks may be carried on in London, England and New York, New York.
“ Canadian Base Rate ”: for any day, the greatest of ( a ) the rate of interest in effect for such day as publicly announced from time to time by Bank of America, N.A. (acting through its Canada branch) in Toronto, Ontario as its “base rate” (the “base rate” being a rate set by Bank of America, N.A. (acting through its Canada branch) based on various factors including costs and desired return of Bank of America, N.A. (acting through its Canada branch), general economic conditions and other factors, and used as a reference point for pricing loans in Dollars made at its “base rate”, which may be priced at, above or below such announced rate), ( b ) the Federal Funds Rate for such day, plus 0.50%, or ( c ) the Eurocurrency Rate for a 30 day interest period as determined on such day, plus 1.00%. Any change in the “base rate” announced by Bank of
 
10

America, N.A. (acting through its Canada branch) shall take effect at the opening of business on the day specified in the public announcement of such change. Each interest rate based upon the Canadian Base Rate shall be adjusted simultaneously with any change in the “base rate”. In the event that Bank of America, N.A. (acting through its Canada branch) (including any successor or assignee) does not at any time publicly announce a “base rate”, then “Canadian Base Rate” shall mean the “base rate” publicly announced by a Schedule 1 chartered bank in Canada selected by the Administrative Agent.
“ Canadian Borrower ”: Unisource Canada, Inc., a Canadian corporation, together with its successors and assigns.
“ Canadian Concentration Account Agreement ”: as defined in subsection 4.16(c) .
“ Canadian Core Concentration Account ”: as defined in subsection 4.16(d)(ii) .
“ Canadian Dollars ” and “ Cdn$ ”: the lawful currency of Canada, as in effect from time to time.
“ Canadian Extender of Credit ”: as defined in subsection 4.15 .
“ Canadian Facility ”: the credit facility available to the Canadian Borrower and the U.S. Borrowers hereunder pursuant to the Canadian Facility Commitments.
“ Canadian Facility Commitment ”: at any time, the sum of the Tranche A Canadian Facility Commitments and the Tranche A-1 Canadian Facility Commitments, in each case at such time. The original amount of the aggregate Canadian Facility Commitments is $150,000,000.
“ Canadian Facility Issuing Lender ”: as the context may require, ( i ) Bank of America, N.A. (acting through its Canada branch) or any Affiliate thereof, in its capacity as issuer of any Canadian Facility Letter of Credit, and/or ( ii ) any other Canadian Facility Lender that may become a Canadian Facility Issuing Lender under subsection 3.9 .
“ Canadian Facility L/C Obligations ”: at any time, an amount equal to the sum of ( a ) the aggregate then undrawn and unexpired amount of the then outstanding Canadian Facility Letters of Credit and ( b ) the aggregate amount of drawings under Canadian Facility Letters of Credit which have not then been reimbursed pursuant to subsection 3.5(a) , in each case at such time.
“ Canadian Facility L/C Participants ”: the Tranche A Canadian Facility Lender.
“ Canadian Facility Lender ”: any Tranche A Canadian Facility Lender and/or any Tranche A-1 Canadian Facility Lender, as applicable.
“ Canadian Facility Lender Exposure ”: of any Canadian Facility Lender at any time, an amount equal to the sum of its Tranche A Canadian Facility Lender Exposure and its Tranche A-1 Canadian Facility Lender Exposure, in each case at such time.
 
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“ Canadian Facility Letters of Credit ”: Letters of Credit (including Existing Letters of Credit) issued by the Canadian Facility Issuing Lender to, or for the account of, the Canadian Borrower, pursuant to subsection 3.1 .
“ Canadian Facility Revolving Credit Loan ”: as defined in subsection 2.1(b) .
“ Canadian Guarantee and Collateral Agreement ”: the Canadian Guarantee and Collateral Agreement delivered to the ABL Collateral Agent as of the date hereof, substantially in the form of Exhibit D-1 , as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Canadian Loan Parties ”: the Canadian Borrower and each Canadian Subsidiary Guarantor.
“ Canadian Pension Plan ”: each pension plan required to be registered under Canadian federal or provincial law that is maintained or contributed to by a Canadian Loan Party for its employees or former employees, but does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec, respectively.
“ Canadian Prime Rate ”: on any date, the per annum rate of interest equal to the greatest of ( a ) the rate of interest in effect for such day or so designated from time to time by Bank of America, N.A. (acting through its Canada branch) as its “prime rate” for commercial loans made by it in Canada in Canadian Dollars, such rate being a reference rate and not necessarily representing the lowest or best rate being charged to any customer; ( b ) the Bank of Canada overnight rate, which is the rate of interest charged by the Bank of Canada on one day loans to financial institutions for such day, plus 0.50%; or ( c ) the Canadian BA Rate for a 30-day interest period as determined on such day plus 1.00%. Any change in such rate announced by Bank of America (acting through its Canada branch) shall take effect at the opening of business on the day specified in the public announcement thereof.
“ Canadian Priority Payables ”: at any time, with respect to the Canadian Borrower and Canadian Subsidiary Guarantors:
(a) the amount past due and owing by such Person, or the accrued amount for which such Person has an obligation to remit to a Governmental Authority or other Person pursuant to any applicable law, rule or regulation, in respect of ( i ) pension fund obligations, including all amounts currently or past due and not contributed, remitted or paid to any Canadian Pension Plans, the Canada Pension Plan or the Quebec Pension Plan, and other pension fund obligations and contributions (including in respect of any wind-up deficiency or solvency deficiency) as required under applicable law, ( ii ) employment insurance, ( iii ) goods and services taxes, sales taxes, harmonized sales taxes, employee income taxes and other taxes payable or to be remitted or withheld, ( iv ) workers’ compensation, ( v ) wages, vacation pay and severance pay, and other amounts secured by sections 81.3 and 81.4 of the Bankruptcy and Insolvency Act (Canada), ( vi ) obligations owing to a supplier in respect of which section 81.1 of the Bankruptcy and Insolvency Act (Canada) applies, ( vii ) all amounts deducted or withheld and not paid and
 
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remitted when due under the Income Tax Act (Canada), ( viii ) amounts currently or past due and not paid for realty, municipal or similar taxes, and ( ix ) other like charges and demands; in each case, in respect of which any Governmental Authority or other Person may claim a security interest, lien, trust, hypothec, prior claim or other claim ranking or capable of ranking in priority to or pari passu with one or more of the Liens granted in the Security Documents; and
(b) the aggregate amount of any other liabilities of such Person ( i ) in respect of which a trust has been or may be imposed on any Collateral to provide for payment or ( ii ) which are secured by a security interest, pledge, lien, charge, right, hypothec, prior claim or claim on any Collateral, in each case, pursuant to any applicable law, rule or regulation and which trust, security interest, pledge, lien, charge, right, hypothec, prior claim or claim ranks or is capable of ranking in priority to or pari passu with one or more of the Liens granted in the Security Documents.
“ Canadian Qualified Lender ”: a financial institution that is listed on Schedule I, II, or III of the Bank Act (Canada), has received an approval to have a financial establishment in Canada pursuant to Section 522.21 of the Bank Act (Canada), as amended, or is not a foreign bank or, if a foreign bank, it is not engaging in or carrying on a banking business in Canada in violation of the Bank Act (Canada), and if such financial institution is not resident in Canada or is deemed not to be resident in Canada for purposes of the Income Tax Act (Canada), that financial institution deals at arm’s length with the Canadian Borrower for purposes of the Income Tax Act (Canada).
“ Canadian Secured Parties ”: the “Secured Parties” as defined in the Canadian Guarantee and Collateral Agreement.
“ Canadian Security Documents ”: the collective reference to the Canadian Guarantee and Collateral Agreement, the Quebec Security Documents and all other similar security documents hereafter delivered to the ABL Collateral Agent granting or perfecting a Lien on any asset or assets of any Person to secure the obligations and liabilities of the Canadian Loan Parties hereunder and/or under any of the other Loan Documents or to secure any guarantee of any such obligations and liabilities, including any security documents executed and delivered or caused to be delivered to the ABL Collateral Agent pursuant to subsection 7.9(a) , 7.9(b) or 7.9(c) , in each case, as amended, supplemented, waived or otherwise modified from time to time.
“ Canadian Subsidiary ”: each Subsidiary of the Parent Borrower that is incorporated or organized under the laws of Canada or any province or territory thereof.
“ Canadian Subsidiary Guarantor ”: each ( i ) Canadian Subsidiary of the Parent Borrower, other than the Canadian Borrower and ( ii ) Subsidiary of the Parent Borrower that is organized under the laws of the United States of America or any state thereof or the District of Columbia, all or substantially all of whose assets consist of securities or Indebtedness of one or more Canadian Subsidiaries, intellectual property relating to such Canadian Subsidiaries and other assets relating to an ownership interest in any such securities, Indebtedness, intellectual property or Subsidiaries, in each case which executes and delivers the Canadian Guarantee and Collateral Agreement or any joinders or supplements thereto, in each case, unless and until such time as the respective Canadian Subsidiary Guarantor ceases to constitute a Canadian Subsidiary of the Parent Borrower or is released from all of its obligations under the Canadian Guarantee and Collateral Agreement in accordance with the terms and provisions hereof and thereof.
 
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“ capital expenditures ”: with respect to any Person for any period, the aggregate of all expenditures by such Person and its consolidated Subsidiaries during such period (exclusive of expenditures made for Investments not prohibited hereby or for acquisitions permitted by subsection 8.5 ) which, in accordance with GAAP, are or should be included in “ capital expenditures .”
“ Capital Stock ”: with respect to any Person, any and all shares of, rights to purchase, warrants or options for, or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.
“ Capitalized Lease Obligation ”: an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP. The Stated Maturity of any Capitalized Lease Obligation shall be the date of the last payment of rent or any other amount due under the related lease.
“ Captive Insurance Subsidiary ”: any Subsidiary of the Parent Borrower that is subject to regulation as an insurance company (or any Subsidiary thereof).
“ Cash Dominion Period ”: ( a ) the period commencing on the date that Specified Availability is less than the 10% Trigger for five consecutive Business Days and continuing until the date that Specified Availability has been at least equal to the 10% Trigger for 20 consecutive calendar days or ( b ) upon the occurrence of a Specified Default, the period during which such Specified Default shall be continuing.
“ Cash Equivalents ”: any of the following: ( a ) money, ( b ) securities issued or fully guaranteed or insured by the United States of America, Canada or a member state of the European Union (other than securities issued by Portugal, Italy, Ireland, Greece, Spain or securities issued by any other member state of the European Union that is not rated at least “A” by S&P or at least “A-1” by Moody’s) or any agency or instrumentality of any thereof, ( c ) time deposits, certificates of deposit or bankers’ acceptances of ( i ) any lender under the ABL Facility or any affiliate thereof, ( ii ) SunTrust Bank, Wells Fargo National Association, Bank of America, N.A., or any of their respective branches or affiliates or ( iii ) any commercial bank having capital and surplus in excess of $500,000,000 (or the foreign currency equivalent thereof as of the date of such investment) and the commercial paper of the holding company of which is rated at least “A-2” or the equivalent thereof by S&P or at least “P-2” or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), ( d ) money market instruments, commercial paper or other short-term obligations rated at least “A-2” or the equivalent thereof by S&P or at least “P-2” or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), ( e ) investments in money market funds subject to the risk limiting conditions of Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of 1940, as amended, ( f ) Canadian Dollars and ( g ) investments similar to any of the foregoing denominated in Canadian Dollars or any other foreign currencies approved by the Parent Borrower.
 
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“ Change in Law ”: as defined in subsection 4.11(a) .
“ Change of Control ”: ( i ) ( x ) the Permitted Holders shall in the aggregate be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of ( A ) so long as the Parent Borrower is a Subsidiary of any Parent, shares of Voting Stock having less than 35.0% of the total voting power of all outstanding shares of such Parent (other than a Parent that is a Subsidiary of another Parent) and ( B ) if the Parent Borrower is not a Subsidiary of any Parent, shares of Voting Stock having less than 35.0% of the total voting power of all outstanding shares of the Parent Borrower and ( y ) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, shall be the “beneficial owner” of ( A ) so long as the Parent Borrower is a Subsidiary of any Parent, shares of Voting Stock having more than 40.0% of the total voting power of the Voting Stock of such Parent (other than a Parent that is a Subsidiary of another Parent) and ( B ) if the Parent Borrower is not a Subsidiary of any Parent, shares of Voting Stock having more than 40.0% of the total voting power of the Voting Stock of the Parent Borrower; ( ii ) Holding shall cease to own, directly or indirectly, 100.0% of the Capital Stock of the Parent Borrower (or any successor to the Parent Borrower permitted pursuant to subsection 8.3 ); and ( iii ) the Continuing Directors shall cease to constitute a majority of the members of the Board of Directors of the Parent Borrower. Notwithstanding anything to the contrary in the foregoing, the Transactions shall not constitute or give rise to a Change of Control.
“ Closing Date ”: the date on which all the conditions precedent set forth in subsection 6.1 shall be satisfied or waived.
“ Code ”: the Internal Revenue Code of 1986, as amended from time to time.
“ Co-Documentation Agents ”: the institutions set forth on the cover page hereto as co-documentation agents, provided that no entity shall become a Co-Documentation Agent prior to it or one of its affiliates becoming a Lender.
“ Collateral ”: all assets of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document.
“ Collateral Access Agreement ”: a Collateral Access Agreement, substantially in the form of Exhibit P or such other form as is reasonably acceptable to the ABL Collateral Agent.
“ Commercial Letter of Credit ”: as defined in subsection 3.1(a) .
“ Commitment ”: as to any Lender, its U.S. Facility Commitment and its Canadian Facility Commitment (in each case including any Incremental Revolving Commitment in respect thereof) and its New Revolving Commitment to the extent included in this Agreement. The original amount of the aggregate Commitments of the Lenders is the Dollar Equivalent of $1,400,000,000.
 
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“ Commitment Fee Percentage ”: during the period from the Closing Date until the initial Adjustment Date, 0.375% per annum; from and after the initial Adjustment Date and on each subsequent Adjustment Date, the “Commitment Fee Rate” will be as set forth in the below pricing grid based on Average Daily Used Percentage for the previous fiscal quarter. “Average Daily Used Percentage” for purposes of this definition shall mean, for any period, the percentage derived by dividing ( a ) the sum of ( x ) the average daily principal balance of all Loans (other than the principal balance of any Swing Line Loans) during such period plus ( y ) the average daily undrawn amount of all outstanding Letters of Credit by ( b ) the average daily amount of the total Commitments during such period.

Level	  	Average Daily Used Percentage	  	Commitment Fee Rate	 	
			
I	  	Less than 50%	  	 	0.375	% 	
			
II	  	Greater than or equal to 50%	  	 	0.25	% 	
“ Commitment Parties ”: Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, N.A., SunTrust Bank, SunTrust Robinson Humphrey, Inc., Regions Bank, HSBC Bank USA, National Association, HSBC Bank Canada and RBS Citizens Business Capital (a division of RBS Asset Finance, Inc., a subsidiary of RBS Citizens, N.A.).
“ Commitment Percentage ”: as to any Lender, its Tranche A Canadian Facility Commitment Percentage, Tranche A-1 Canadian Facility Commitment Percentage, Tranche A U.S. Facility Commitment Percentage and/or Tranche A-1 U.S. Facility Commitment Percentage, as the context may require.
“ Commitment Period ”: the period from and including the Closing Date to but not including the Maturity Date, or such earlier date as the Commitments shall terminate as provided herein.
“ Commodities Agreement ”: in respect of a Person, any commodity futures contract, forward contract, option or similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is a party or beneficiary.
“ Commonly Controlled Entity ”: an entity, whether or not incorporated, which is under common control with the Parent Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Parent Borrower and which is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Sections 414(m) and (o) of the Code.
“ Compliance Period ”: means any period beginning on the date that Specified Availability is less than the 10% Trigger and continuing until the date that Specified Availability has been at least equal to the 10% Trigger for 20 consecutive calendar days.
 
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“ Concentration Account ”: any concentration account maintained by any Loan Party into which the funds in any DDA are transferred on a periodic basis as provided for in subsection 4.16(b) or 4.16(c) .
“ Concentration Account Agreement ”: as defined in subsection 4.16(b) .
“ Conduit Lender ”: any special purpose corporation organized and administered by any Lender for the purpose of making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument delivered to the Administrative Agent (a copy of which shall be provided by the Administrative Agent to the Borrower Representative on request); provided that the designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of its obligations under this Agreement, including its obligation to fund a Loan if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under this Agreement with respect to its Conduit Lender, and provided , further , that no Conduit Lender shall ( a ) be entitled to receive any greater amount pursuant to any provision of this Agreement, including subsection 4.10 , 4.11 , 4.12 or 11.5 , than the designating Lender would have been entitled to receive in respect of the extensions of credit made by such Conduit Lender if such designating Lender had not designated such Conduit Lender hereunder, ( b ) be deemed to have any Commitment, ( c ) be designated if such designation would otherwise increase the costs of the ABL Facility to any Borrower or ( d ) if relating to any Canadian Facility Lender, not be a Canadian Qualified Lender.
“ Consolidated Coverage Ratio ”: as of any date of determination, the ratio of ( i ) the aggregate amount of Consolidated EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which consolidated financial statements of the Parent Borrower are available, to ( ii ) Consolidated Interest Expense for such four fiscal quarters; provided that
(1) if since the beginning of such period the Parent Borrower or any Restricted Subsidiary has Incurred any Indebtedness that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation shall be computed based on ( A ) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or ( B ) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation),
 
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(2) if since the beginning of such period the Parent Borrower or any Restricted Subsidiary has repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged any Indebtedness that is no longer outstanding on such date of determination (each, a “ Discharge ”) or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a Discharge of Indebtedness (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid), Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Discharge of such Indebtedness, including with the proceeds of such new Indebtedness, as if such Discharge had occurred on the first day of such period,
(3) if since the beginning of such period the Parent Borrower or any Restricted Subsidiary shall have disposed of any company, any business or any group of assets constituting an operating unit of a business, including any such disposition occurring in connection with a transaction causing a calculation to be made hereunder (any such disposition, a “ Sale ”), the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the assets that are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to ( A ) the Consolidated Interest Expense attributable to any Indebtedness of the Parent Borrower or any Restricted Subsidiary repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged with respect to the Parent Borrower and its continuing Restricted Subsidiaries in connection with such Sale for such period (including but not limited to through the assumption of such Indebtedness by another Person) plus ( B ) if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period attributable to the Indebtedness of such Restricted Subsidiary to the extent the Parent Borrower and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such Sale,
(4) if since the beginning of such period the Parent Borrower or any Restricted Subsidiary (by merger, amalgamation, consolidation or otherwise) shall have made an Investment in any Person that thereby becomes a Restricted Subsidiary, or otherwise acquired any company, any business or any group of assets constituting an operating unit of a business, including any such Investment or acquisition occurring in connection with a transaction causing a calculation to be made hereunder (any such Investment or acquisition, a “ Purchase ”), Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any related Indebtedness) as if such Purchase occurred on the first day of such period, and
(5) if since the beginning of such period any Person became a Restricted Subsidiary or was merged or consolidated with or into the Parent Borrower or any Restricted Subsidiary, and since the beginning of such period such Person shall have Discharged any Indebtedness or made any Sale or Purchase that would have required an adjustment pursuant to clause (2), (3) or (4) above if made by the Parent Borrower or a Restricted Subsidiary since the beginning of such period, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Discharge, Sale or Purchase occurred on the first day of such period.
 
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For purposes of this definition, whenever pro forma effect is to be given to any Sale, Purchase or other transaction, or the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred or repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged in connection therewith, the pro forma calculations in respect thereof (including in respect of anticipated net cost savings or synergies relating to any such Sale, Purchase or other transaction) shall be as determined in good faith by the chief financial officer or another Responsible Officer of the Parent Borrower; provided that such net cost savings or synergies are reasonably identifiable and factually supportable. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness). If any Indebtedness bears, at the option of the Parent Borrower or a Restricted Subsidiary, a rate of interest based on a prime or similar rate, a eurocurrency interbank offered rate or other fixed or floating rate, and such Indebtedness is being given pro forma effect, the interest expense on such Indebtedness shall be calculated by applying such optional rate as the Parent Borrower or such Restricted Subsidiary may designate. If any Indebtedness that is being given pro forma effect was Incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate determined in good faith by a responsible financial or accounting officer of the Parent Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.
“ Consolidated EBITDA ”: for any period, the Consolidated Net Income of the Parent Borrower and its Restricted Subsidiaries for such period, plus (a) the following to the extent deducted in calculating such Consolidated Net Income, without duplication of any other amount under this definition of Consolidated EBITDA,
(i) provision for all taxes (whether or not paid, estimated or accrued) based on income, profits or capital (including penalties and interest, if any),
(ii) Consolidated Interest Expense, all items excluded from the definition of Consolidated Interest Expense pursuant to clause (iii) thereof (other than Special Purpose Financing Expense), any Special Purpose Financing Fees and (for purposes of calculating the Consolidated Fixed Charge Coverage Ratio) any Special Purpose Financing Expense,
 
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(iii) depreciation, amortization (including but not limited to amortization of goodwill and intangibles and amortization and write-off of financing costs) and all other non-cash charges or non-cash losses, including last-in, first-out inventory method changes,
(iv) any expenses or charges related to any Equity Offering, Investment or Indebtedness permitted by this Agreement (whether or not consummated or incurred, and including any non-consummated sale of Capital Stock to the extent the proceeds thereof were intended to be contributed to the equity capital of the Parent Borrower or any of its Restricted Subsidiaries),
(v) the amount of loss attributable to non-controlling interests, and
(vi) any management, monitoring, consulting and advisory fees and related expenses paid to any Investor or any of their respective Affiliates plus
(b) without duplication of any other amount under this definition of Consolidated EBITDA, the amount of net cost savings projected by the Parent Borrower in good faith to be realized as a result of actions taken or to be taken (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that ( x ) such cost savings are reasonably identifiable and factually supportable, ( y ) such net cost savings are reasonably expected to be realized within 18 months of the date of the calculation of Consolidated EBITDA as evidenced in a certificate of a Responsible Officer dated the date of such calculation and ( z ) the aggregate amount of cost savings added pursuant to this clause (b) during any consecutive four-quarter period beginning no earlier than the first anniversary of the Closing Date, shall not exceed 20% of Consolidated EBITDA for such period (calculated excluding such net cost savings) (which adjustments may be incremental to (but not duplicative of) pro forma adjustments made pursuant to the proviso to the definition of “Consolidated Coverage Ratio” or “Consolidated Secured Leverage Ratio”),
plus (c) to the extent deducted in calculating such Consolidated Net Income, without duplication of any other amount under this definition of Consolidated EBITDA:
(i) the amount of loss on any Financing Disposition, and
(ii) any costs or expenses pursuant to any management or employee stock option or other equity-related plan, program or arrangement, or other benefit plan, program or arrangement, or any stock subscription or shareholder agreement, to the extent funded with cash proceeds contributed to the capital of the Parent Borrower or an issuance of Capital Stock of the Parent Borrower (other than Disqualified Stock) and excluded from the calculation set forth in subsection 8.5(a)(3) ,
plus (d) solely with respect to determining compliance with subsection 8.9 hereof, any Specified Equity Contribution.
 
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“ Consolidated Fixed Charge Coverage Ratio ”: for any Test Period, the ratio of ( a ) ( i ) Consolidated EBITDA for such period minus ( ii ) the unfinanced portion of all capital expenditures (excluding ( x ) any capital expenditure made in an amount equal to all or part of the proceeds, applied within twelve months of receipt thereof, of ( i ) any casualty insurance, condemnation or eminent domain or ( ii ) any sale of assets (other than Inventory or Accounts), ( y ) for the first two years after the Closing Date, capital expenditures in an aggregate amount not to exceed $25,000,000 related to the Transactions and the integration of the xpedx and Unisource businesses and (z) leasehold improvements made by the Parent Borrower or any of its Restricted Subsidiaries on premises leased by such Person but only to the extent reimbursed by the landlord under such leasehold within 45 days of the incurrence by such Person of such expenditure; provided that capital expenditures financed with Revolving Credit Loans, Incremental ABL Term Loans or Swing Line Loans shall not be excluded from the calculation of Consolidated Fixed Charge Coverage Ratio) of the Parent Borrower and its Restricted Subsidiaries during such period, to ( b ) the sum, without duplication, of ( i ) Debt Service Charges payable in cash by the Parent Borrower and its Restricted Subsidiaries during such period plus ( ii ) federal, state and foreign income taxes paid in cash by the Parent Borrower and its Restricted Subsidiaries (net of refunds received) for the period of four full fiscal quarters ending on such date plus ( iii ) Restricted Payments made in cash paid by the Parent Borrower and its Restricted Subsidiaries during the relevant period pursuant to subsection 8.5(b)(v) , (vii)(A) , (xii) , (xiii) , (xiv)  or (xv) .
“ Consolidated Interest Expense ”: for any period,
(i) the total interest expense of the Parent Borrower and its Restricted Subsidiaries to the extent deducted in calculating Consolidated Net Income, net of any interest income of the Parent Borrower and its Restricted Subsidiaries, including any such interest expense consisting of ( a ) interest expense attributable to Capitalized Lease Obligations, ( b ) amortization of debt discount, ( c ) interest in respect of Indebtedness of any other Person that has been Guaranteed by the Parent Borrower or any Restricted Subsidiary, but only to the extent that such interest is actually paid by the Parent Borrower or any Restricted Subsidiary, ( d ) non-cash interest expense, ( e ) the interest portion of any deferred payment obligation and ( f ) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, plus
(ii) Preferred Stock dividends paid in cash in respect of Disqualified Stock of the Borrower held by Persons other than the Parent Borrower or a Restricted Subsidiary, minus
(iii) to the extent otherwise included in such interest expense referred to in clause (i) above, amortization or write-off of financing costs, Special Purpose Financing Expense, accretion or accrual of discounted liabilities not constituting Indebtedness, expense resulting from discounting of Indebtedness in conjunction with recapitalization or purchase accounting, and any “additional interest” in respect of registration rights arrangements for any securities,
in each case under clauses (i) through (iii) as determined on a Consolidated basis in accordance with GAAP; provided that gross interest expense shall be determined after giving effect to any net payments made or received by the Parent Borrower and its Restricted Subsidiaries with respect to Interest Rate Agreements.
 
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“ Consolidated Net Income ”: for any period, the net income (loss) of the Parent Borrower and its Restricted Subsidiaries, determined on a Consolidated basis in accordance with GAAP and before any reduction in respect of Preferred Stock dividends; provided that there shall not be included in such Consolidated Net Income
(i) any net income (loss) of any Person that is not the Parent Borrower or a Restricted Subsidiary, except that the Parent Borrower’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount actually distributed by such Person during such period to the Parent Borrower or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (ii) below),
(ii) solely for purposes of determining the amount available for Restricted Payments under subsection 8.5(a)(3)(A) , any net income (loss) of any Restricted Subsidiary that is not a Borrower or a Subsidiary Guarantor if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of similar distributions by such Restricted Subsidiary, directly or indirectly, to the Parent Borrower by operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or regulation applicable to such Restricted Subsidiary or its stockholders (other than ( x ) restrictions that have been waived or otherwise released, ( y ) restrictions pursuant to any of the Loan Documents or any applicable Intercreditor Agreement and ( z ) restrictions in effect on the Closing Date with respect to a Restricted Subsidiary and other restrictions with respect to such Restricted Subsidiary that taken as a whole are not materially less favorable to the Lenders than such restrictions in effect on the Closing Date), except that the Parent Borrower’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of any dividend or distribution that was or that could have been made by such Restricted Subsidiary during such period to the Parent Borrower or another Restricted Subsidiary (subject, in the case of a dividend that could have been made to another Restricted Subsidiary, to the limitation contained in this clause),
(iii) ( x ) any gain or loss realized upon the sale, abandonment or other disposition of any asset of the Parent Borrower or any Restricted Subsidiary (including pursuant to any sale/leaseback transaction) that is not sold, abandoned or otherwise disposed of in the ordinary course of business (as determined in good faith by a Responsible Officer of the Parent Borrower) or ( y ) any gain or loss realized upon the disposal, abandonment or discontinuation of operations of the Parent Borrower or any Restricted Subsidiary, and any income (loss) or expense from disposed, abandoned or discontinued operations,
 
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(iv) any item classified or disclosed as an extraordinary, unusual or nonrecurring gain, loss or charge (including fees, expenses and charges associated with the Transactions or any acquisition, merger, amalgamation or consolidation after the Closing Date),
(v) restructuring and integration and other similar costs, expenses and charges including, without limitation, any severance costs, costs associated with office openings or closings and consolidation, relocation or integration costs and other business optimization and restructuring charges and expenses,
(vi) the cumulative effect of a change in accounting principles and the implementation thereof,
(vii) all deferred financing costs written off and premiums paid in connection with any early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments,
(viii) any unrealized gains or losses in respect of Currency Agreements,
(ix) any unrealized foreign currency transaction gains or losses in respect of obligations of any Person denominated in a currency other than the functional currency of such Person,
(x) any non-cash compensation charge arising from any grant of stock, stock options or other equity based awards,
(xi) to the extent otherwise included in Consolidated Net Income, any unrealized foreign currency translation or transaction gains or losses in respect of Indebtedness or other obligations of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any Restricted Subsidiary,
(xii) any non-cash charge, expense or other impact attributable to application of the purchase or recapitalization method of accounting (including the total amount of depreciation and amortization, cost of sales or other non-cash expense resulting from the write-up of assets to the extent resulting from such purchase or recapitalization accounting adjustments),
(xiii) any impairment charge or asset write-off, including any charge or write-off related to intangible assets, long-lived assets or investments in debt and equity securities, and any amortization of intangibles,
(xiv) any fees and expenses (or amortization thereof), and any charges or costs, in connection with any acquisition, Investment, asset disposition, issuance of Capital Stock, issuance, repayment or refinancing of Indebtedness, or amendment or modification of any agreement or instrument relating to any Indebtedness (in each case, whether or not completed, and including any such transaction consummated prior to the Closing Date),
 
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(xv) any expenses related to accruals and reserves established or adjusted within 18 months after the Closing Date that are established as a result of the Transactions, and any changes as a result of the adoption, modification or implementation of accounting policies and estimates, and
(xvi) to the extent covered by insurance and actually reimbursed (or the Parent Borrower has determined that there exists reasonable evidence that such amount will be reimbursed by the insurer and such amount is not denied by the applicable insurer in writing within 180 days and is reimbursed within 365 days of the date of such evidence (with a deduction in any future calculation of Consolidated Net Income for any amount so added back to the extent not so reimbursed within such 365-day period)), any expenses with respect to liability or casualty events or business interruption.
Notwithstanding the foregoing, for the purpose of subsection 8.5(a)(3)(A) only, there shall be excluded from Consolidated Net Income, without duplication, any income consisting of dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries and any income consisting of return of capital, repayment or other proceeds from dispositions or repayments of Investments consisting of Restricted Payments, in each case to the extent such income would be included in Consolidated Net Income and such related dividends, repayments, transfers, return of capital or other proceeds are applied by the Parent Borrower to increase the amount of Restricted Payments permitted under such covenant pursuant to subsection 8.5(a)(3)(C) .
“ Consolidated Secured Indebtedness ”: as of any date of determination, ( i ) an amount equal to the Consolidated Total Indebtedness (without regard to clause (ii) of the definition thereof) as of such date that in each case is then secured by Liens on property or assets of the Parent Borrower and its Restricted Subsidiaries (other than property or assets held in a defeasance or similar trust or arrangement for the benefit of the Indebtedness secured thereby) and consists of Loans or Indebtedness secured by a Lien minus ( ii ) the amount of Unrestricted Cash held by the Parent Borrower and its Restricted Subsidiaries as of the most recent date with respect to which a balance sheet is available.
“ Consolidated Secured Leverage Ratio ”: as of any date of determination, the ratio of ( x ) Consolidated Secured Indebtedness as at such date (after giving effect to any Incurrence or Discharge of Indebtedness on such date) to ( y ) the aggregate amount of Consolidated EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which consolidated financial statements of the Parent Borrower are available; provided that
(1) if since the beginning of such period the Parent Borrower or any Restricted Subsidiary shall have made a Sale (including any Sale occurring in connection with a transaction causing a calculation to be made hereunder), the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the assets that are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period,
 
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(2) if since the beginning of such period the Parent Borrower or any Restricted Subsidiary (by merger, amalgamation, consolidation or otherwise) shall have made a Purchase (including any Purchase occurring in connection with a transaction causing a calculation to be made hereunder), Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Purchase occurred on the first day of such period, and
(3) if since the beginning of such period any Person became a Restricted Subsidiary or was merged or consolidated with or into the Parent Borrower or any Restricted Subsidiary, and since the beginning of such period such Person shall have made any Sale or Purchase that would have required an adjustment pursuant to clause (1) or (2) above if made by the Parent Borrower or a Restricted Subsidiary since the beginning of such period, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Sale or Purchase occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to any Sale, Purchase or other transaction, or the amount of income or earnings relating thereto, the pro forma calculations in respect thereof (including in respect of anticipated net cost savings or synergies relating to any such Sale, Purchase or other transaction) shall be as determined in good faith by the chief financial officer or an authorized officer of the Parent Borrower; provided that such net cost savings or synergies are reasonably identifiable, factually supportable and reasonably expected to be realized within 18 months of the date of such pro forma calculation.
“ Consolidated Total Assets ”: as of any date of determination, the total assets reflected on the consolidated balance sheet of the Parent Borrower and its Restricted Subsidiaries as at the end of the most recently ended fiscal quarter of the Parent Borrower for which such a balance sheet is available, determined on a Consolidated basis in accordance with GAAP (and, in the case of any determination relating to any Incurrence of Indebtedness or any Investment, on a pro forma basis including any property or assets being acquired in connection therewith).
“ Consolidated Total Indebtedness ”: as of any date of determination, an amount equal to ( i ) the aggregate principal amount of outstanding Indebtedness of the Parent Borrower and its Restricted Subsidiaries as of such date consisting of (without duplication) Indebtedness for borrowed money (including Purchase Money Obligations and unreimbursed outstanding drawn amounts underfunded letters of credit (other than letters of credit in respect of trade payables)), Capitalized Lease Obligations and debt obligations evidenced by bonds, debentures, notes or similar instruments, Disqualified Stock and (in the case of any Restricted Subsidiary that is not a Subsidiary Guarantor) Preferred Stock, determined on a Consolidated basis in accordance with GAAP (excluding items eliminated in Consolidation, and for the avoidance of doubt, excluding Hedging Obligations), minus ( ii ) the amount of Unrestricted Cash held by the Parent Borrower and its Restricted Subsidiaries, in each case as of the most recent date for which a balance sheet is available.
 
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“ Consolidation ”: the consolidation of the accounts of each of the Restricted Subsidiaries with those of the Parent Borrower in accordance with GAAP; provided that “Consolidation” will not include consolidation of the accounts of any Unrestricted Subsidiary, but the interest of the Parent Borrower or any Restricted Subsidiary in any Unrestricted Subsidiary will be accounted for as an investment. The term “Consolidated” has a correlative meaning.
“ Contingent Obligation ”: with respect to any Person, any obligation of such Person guaranteeing any obligation that does not constitute Indebtedness (a “ primary obligation ”) of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, ( 1 ) to purchase any such primary obligation or any property constituting direct or indirect security therefor, ( 2 ) to advance or supply funds ( a ) for the purchase or payment of any such primary obligation, or ( b ) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or ( 3 ) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
“ Continuing Directors ”: the directors of the Board of Directors of the Parent Borrower on the Closing Date, and each other director if, in each case, such other director’s nomination for election to the Board of Directors of the Parent Borrower is recommended by at least a majority of the then Continuing Directors or the election of such other director is approved by one or more Permitted Holders.
“ Contractual Obligation ”: as to any Person, any provision of any material security issued by such Person or of any material agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“ Contribution Agreement ”: as defined in the recitals hereto.
“ Credit Card Agreements ”: all agreements now or hereafter entered into by any Loan Party for the benefit of a Loan Party, in each case with any Credit Card Issuer or any Credit Card Processor, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.
“ Credit Card Issuer ”: any of the credit card issuers listed on Schedule 1.1C , and any other credit card issuer identified in writing by the Parent Borrower to, and reasonably acceptable to, the Administrative Agent.
“ Credit Card Notification ”: collectively, the notices to Credit Card Issuers or Credit Card Processors who are parties to Credit Card Agreements, which Credit Card Notifications shall require the ACH or wire transfer no less frequently than each Business Day (and whether or not there are then any outstanding Obligations) of all payments due from Credit Card Processors to ( i ) a DDA or ( ii ) a Concentration Account.
 
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“ Credit Card Processor ”: any of the credit card processors or clearinghouses listed on Schedule 1.1C , and any other credit card processor or clearinghouse identified in writing by the Parent Borrower to, and reasonably acceptable to, the Administrative Agent.
“ Credit Card Receivables ”: collectively, ( a ) all present and future rights of the Loan Parties to payment from any Credit Card Issuer, Credit Card Processor or other third party arising from sales of goods or rendition of services to customers who have purchased such goods or services using a credit or debit card and ( b ) all present and future rights of the Loan Parties to payment from any Credit Card Issuer, Credit Card Processor or other third party in connection with the sale or transfer of Accounts arising pursuant to the sale of goods or rendition of services to customers who have purchased such goods or services using a credit card or a debit card, including, but not limited to, all amounts at any time due or to become due from any Credit Card Issuer or Credit Card Processor under the Credit Card Agreements or otherwise, in each case above calculated net of prevailing interchange charges.
“ Cure Amount ”: as defined in Section 9 .
“ Currency Agreement ”: in respect of a Person, any foreign exchange contract, currency swap agreement or other similar agreement or arrangements (including derivative agreements or arrangements), as to which such Person is a party or a beneficiary.
“ Customs Broker Agreement ”: an agreement, in form and substance reasonably satisfactory to the Administrative Agent among a Loan Party, a customs broker, freight forwarder or other carrier (which is not an Affiliate of a Loan Party), and the ABL Collateral Agent, in which the customs broker, freight forwarder or other carrier acknowledges that it has control over and holds the documents evidencing ownership of, or other shipping documents relating to, the subject Inventory or other property for the benefit of the ABL Collateral Agent, and agrees, upon notice from the ABL Collateral Agent (which notice shall be delivered only upon the occurrence and during the continuance of an Event of Default), to hold and dispose of the subject Inventory and other property solely as directed by the ABL Collateral Agent.
“ DDAs ”: any checking or other demand deposit account, which checking or other demand deposit account is maintained by the Loan Parties in which cash proceeds of ABL Priority Collateral are located or are expected to be located (and for the avoidance of doubt excluding ( i ) any account if such account is, or all of the funds and other assets owned by a Loan Party held in such account are, excluded from the Collateral pursuant to any Security Document, including Excluded Assets or ( ii ) any account that is an Excluded Account).
“ Debt Service Charges ”: for any period, the sum of ( a ) Consolidated Interest Expense plus ( b ) scheduled principal payments required to be made (after giving effect to any prepayments paid in cash that reduce the amount of such required payments unless such payments are funded with the proceeds of Revolving Credit Loans, Incremental ABL Term Loans or Swing Line Loans) on account of Indebtedness of the Parent Borrower and its Subsidiaries (excluding any payments on Indebtedness required to be made on the final maturity date thereof to the extent such payments are made with the proceeds of refinancing Indebtedness (other than Revolving Credit Loans and Incremental ABL Term Loans) permitted hereunder) during such period plus ( c ) scheduled mandatory payments on account of Disqualified Stock of
 
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the Parent Borrower and its consolidated Restricted Subsidiaries (whether in the nature of dividends, redemption, repurchase or otherwise) required to be made during such period, in each case determined on a Consolidated basis in accordance with GAAP.
“ Default ”: any of the events specified in Section 9 , whether or not any requirement for the giving of notice (other than, in the case of subsection 9(e) , a Default Notice), the lapse of time, or both, or any other condition specified in Section 9 , has been satisfied.
“ Default Notice ”: as defined in subsection 9(e) .
“ Defaulting Lender ”: any Lender whose acts or failure to act, whether directly or indirectly, cause it to meet any part of the definition of Lender Default.
“ Designated Preferred Stock ”: Preferred Stock of the Parent Borrower (other than Disqualified Stock) or any Parent that is issued for cash (other than to a Restricted Subsidiary) and is so designated as Designated Preferred Stock, pursuant to a certificate executed by a Responsible Officer of the Parent Borrower or the applicable Parent, as the case may be, on the date of issuance thereof.
“ Designation Date ”: as defined in subsection 2.7(f) .
“ Discharge ”: as defined in the definition of “Consolidated Coverage Ratio.”
“ Disinterested Director ”: as defined in subsection 8.6 .
“ Disqualified Lender ”: ( i ) any competitor of the Parent Borrower and its Restricted Subsidiaries that is in the same or a similar line of business as the Parent Borrower and its Restricted Subsidiaries designated in writing by the Parent Borrower to the Administrative Agent prior to January 28, 2014, ( ii ) any bank, financial institution or other institutional lender or investor designated in writing by the Parent Borrower to the Administrative Agent prior to January 28, 2014 and reasonably acceptable to the Commitment Parties, ( iii ) in the case of each of clauses (i) and (ii), any of their affiliates that are designated in writing to the Administrative Agent prior to January 28, 2014, and ( iv ) any Loan Party or any of their Affiliates.
“ Disqualified Stock ”: with respect to any Person, any Capital Stock (other than Management Stock) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event (other than following the occurrence of a Change of Control or other similar event described under such terms as a “change of control,” or following the occurrence of a disposition of property or other assets) ( i ) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, ( ii ) is convertible or exchangeable for Indebtedness or Disqualified Stock or ( iii ) is redeemable at the option of the holder thereof (other than following the occurrence of a Change of Control or other similar event described under such terms as a “change of control,” or following the occurrence of a disposition of property or other assets), in whole or in part, in each case on or prior to the Maturity Date; provided that Capital Stock issued to any employee benefit plan, or by any such plan to any employees of the Borrower or any Subsidiary, shall not constitute Disqualified Stock solely because it may be required to be repurchased or otherwise acquired or retired in order to satisfy applicable statutory or regulatory obligations.
 
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“ Dollar Equivalent ”: at any time, ( a ) with respect to any amount denominated in Dollars, such amount in Dollars, and ( b ) with respect to any amount denominated in any other currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent at such time in accordance with the Spot Rate of Exchange.
“ Dollars ” and “ $ ”: dollars in lawful currency of the United States of America.
“ Domestic Subsidiary ”: any Restricted Subsidiary of the Parent Borrower other than a Foreign Subsidiary.
“ Dormant Subsidiary ”: any Subsidiary of the Parent Borrower that carries on no operations, had revenues of less than $4,000,000 during the most recently completed period of four consecutive fiscal quarters of the Parent Borrower and has total assets of less than $4,000,000 as of the last day of such period; provided that the assets of all Subsidiaries constituting Dormant Subsidiaries shall at no time exceed $20,000,000 in the aggregate and the revenues of all Subsidiaries constituting Dormant Subsidiaries for any four consecutive fiscal quarters shall at no time exceed $20,000,000 in the aggregate.
“ Eligible Accounts ”: those Accounts created and owned by any of the Loan Parties in the ordinary course of its business, arising out of its sale, lease or rental of goods or rendition of services, that comply in all material respects with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below. In determining the amount to be included, Eligible Accounts shall be calculated net of customer deposits and unapplied cash. Eligible Accounts shall not include the following:
(a) Accounts with respect to invoices ( i ) that are more than 60 days past due or ( ii ) that the Account Debtor has failed to pay within 120 days past the original invoice date;
(b) Accounts owed by an Account Debtor where 50.0% or more of the Dollar Equivalent of the total amount of all Accounts owed by that Account Debtor are deemed ineligible under clause (a) above;
(c) Accounts with respect to which the Account Debtor is ( i ) an Affiliate of any Loan Party (other than, for the avoidance of doubt, International Paper, Georgia-Pacific, a portfolio company of any of the Investors, or any of their respective Affiliates) unless such Accounts were created pursuant to arms-length transactions on customary commercial terms and the Account Debtor is not the Parent or any of its Subsidiaries or ( ii ) an employee of any Loan Party or any Affiliate of such Loan Party (other than a portfolio company of any of the Investors or their respective Affiliates);
(d) Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, cash-on-delivery or any other terms by reason of which the payment by the Account Debtor may be conditional (other than, for the avoidance of doubt, a bill and hold, rental or lease basis); provided , that Accounts with bill and hold terms included as Eligible Accounts hereunder shall not exceed the Dollar Equivalent of $40,000,000;
 
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(e) Accounts with respect to which the Account Debtor is a Person other than a Governmental Authority unless ( i ) the Account Debtor ( A ) is a natural person with a billing address in the United States or Canada, ( B ) maintains its Chief Executive Office (or domicile, for the purposes of the Civil Code of Québec ) in the United States or Canada, or ( C ) is organized under the laws of the United States or Canada or any state, province, territory or subdivision thereof (including U.S.- and Canadian-organized Subsidiaries of Persons located outside the United States or Canada), ( ii ) ( A ) the Account is supported by an irrevocable letter of credit satisfactory to the Administrative Agent in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank), that has been delivered to the Administrative Agent and is directly drawable by the Administrative Agent at a bank located in the United States or Canada, or ( B ) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Administrative Agent in its Permitted Discretion, or ( iii ) the Account is otherwise reasonably satisfactory to the Administrative Agent;
(f) Accounts with respect to which the Account Debtor is the government of any country or sovereign state other than the United States and Canada, or of any state, province, territory, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless ( i ) such Accounts are supported by an irrevocable letter of credit satisfactory to the Administrative Agent in its Permitted Discretion (as to form, substance, and issuer or domestic confirming bank) that has been delivered to the Administrative Agent and is directly drawable by the Administrative Agent at a bank located in the United States or Canada, ( ii ) such Accounts are covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Administrative Agent in its Permitted Discretion, or ( iii ) such Accounts are otherwise reasonably satisfactory to the Administrative Agent;
(g) Accounts in an aggregate amount in excess of the Dollar Equivalent of ( x ) $10,000,000 (or such greater amount as the Administrative Agent shall agree in its Permitted Discretion) at any one time with respect to Accounts referred to under clause (i) below and ( y ) $50,000,000 at any one time with respect to Accounts referred to under clauses (i) and (ii) below, with respect to which the Account Debtor is ( i ) the federal government of Canada or any department, agency or instrumentality of Canada or ( ii ) the federal government of the United States or any department, agency or instrumentality of the United States provided, however, that the following Accounts shall not be ineligible by virtue of this clause (g) or subject to the cap set forth in this clause (g): Accounts with respect to which the applicable Borrower or Subsidiary Guarantor has complied, to the reasonable satisfaction of the Administrative Agent, in the case of clause (i) with the Financial Administration Act (Canada), and, in the case of clause (ii), the Assignment of Claims Act of 1940 (31 USC Section 3727);
(h) ( i ) Accounts with respect to which the Account Debtor is a creditor of any Borrower or Subsidiary Guarantor, has or has asserted a right of setoff, or has disputed its obligation to pay all or any portion of such Accounts to the extent of such claim, right of setoff, or dispute, ( ii ) Accounts which are subject to a rebate that has been earned but not taken or a chargeback, to the extent of such rebate or chargeback, and ( iii ) Accounts that comprise only service charges or finance charges;
 
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(i) Accounts with respect to an Account Debtor whose total obligations owing to the Loan Parties exceed 15.0% of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided , however , that, in each case, the amount of Eligible Accounts that are excluded because they exceed the foregoing percentage shall be determined by the Administrative Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit;
(j) Accounts with respect to which the Account Debtor is insolvent, is subject to a proceeding related thereto, has gone out of business, or as to which a Loan Party has received notice of an imminent proceeding related to such Account Debtor being or alleged to be insolvent or which proceeding is reasonably likely to result in a material impairment of the financial condition of such Account Debtor unless ( i ) such Account is supported by a letter of credit satisfactory to the Administrative Agent in its Permitted Discretion (as to form, substance and issuer or domestic confirming bank), that has been delivered to the Administrative Agent and is directly drawable by the Administrative Agent or ( ii ) such Account Debtor has received debtor-in-possession financing sufficient as determined by the Administrative Agent or the ABL Collateral Agent in its Permitted Discretion to finance its ongoing business activities;
(k) Accounts that are not subject to a valid and perfected first priority Lien (subject only to Permitted Prior Liens and, without duplication, Liens for Canadian Priority Payables that are unregistered and that secure amounts that are not yet due and payable) in favor of the ABL Collateral Agent pursuant to a Security Document (as and to the extent provided therein (it being agreed that in no event shall any Excluded Assets be deemed to be Eligible Accounts hereunder));
(l) Accounts with respect to which ( i ) the goods giving rise to such Account have not been shipped and billed to the Account Debtor (other than Accounts with bill and hold terms permitted to be eligible pursuant to clause (d) above), or ( ii ) the services giving rise to such Account have not been performed and billed to the Account Debtor;
(m) Accounts of an Obligor that is located in a state requiring the filing of a notice of business activities report or similar report in order to permit a Borrower to seek judicial enforcement in such state of payment of such Account, unless such Borrower has qualified to do business in such state or has filed a notice of business activities report or equivalent report for the then-current year or if such failure to file and inability to seek judicial enforcement is capable of being remedied without any material delay or material cost;
(n) Accounts that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by the applicable Loan Party of the subject contract for goods or services (it being understood that this clause (n) shall not apply to payments under rental or lease agreements);
 
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(o) Credit Card Receivables;
(p) Accounts in an aggregate amount in excess of the Dollar Equivalent of $10,000,000 (or such greater amount as the Administrative Agent shall agree in its Permitted Discretion) that are not payable in Dollars, and in the case of Eligible Canadian Accounts, Accounts that are not payable in Dollars or Canadian Dollars;
(q) Accounts with respect to which such Account (or any other Account due from such Account Debtor, whether owing to such Loan Party), in whole or in part, a check, promissory note, draft, trade acceptance or other instrument for the payment of money has been received, presented for payment and returned uncollected more than once for any reason;
(r) Accounts, the collection of which the Administrative Agent in its Permitted Discretion, believes to be doubtful by reason of the Account Debtor’s financial condition, upon not less than 10 Business Days’ prior notice thereof to the Borrower Representative; or
(s) Accounts which are evidenced by a promissory note or other instrument or by chattel paper.
Notwithstanding the foregoing, the Administrative Agent may, from time to time, in the exercise of its Permitted Discretion, on not less than 10 Business Days’ prior notice to the Borrower Representative, change the criteria for Eligible Accounts as reflected on the Borrowing Base Certificate based on either ( i ) an event, condition or other circumstance arising after the Closing Date, or ( ii ) an event, condition or other circumstance existing on the Closing Date to the extent the Administrative Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, Eligible Accounts in any material respect as determined by the Administrative Agent in the exercise of its Permitted Discretion. Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change. Upon delivery of the notice of such change pursuant to the foregoing sentence, the Administrative Agent shall be available to discuss the proposed change, and the applicable Loan Party may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion.
“ Eligible Canadian Accounts ”: the Eligible Accounts owned by the Canadian Borrower and the Canadian Subsidiary Guarantors.
“ Eligible Canadian Credit Card Receivables ”: the Eligible Credit Card Receivables owned by the Canadian Borrower and the Canadian Subsidiary Guarantors.
“ Eligible Canadian In-Transit Inventory ”: the Eligible In-Transit Inventory owned by the Canadian Borrower and the Canadian Subsidiary Guarantors.
“ Eligible Canadian Inventory ”: the Eligible Inventory owned by the Canadian Borrower and the Canadian Subsidiary Guarantors.
 
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“ Eligible Canadian Letter of Credit Inventory ”: the Eligible Letter of Credit Inventory owned by the Canadian Borrower and the Canadian Subsidiary Guarantors.
“ Eligible Credit Card Receivables ”: all Credit Card Receivables of the Loan Parties which satisfy the criteria set forth below:
(a) such Credit Card Receivables arise from the actual and bona fide sale and delivery of goods or rendition of services by such Loan Party in the ordinary course of the business of such Loan Party;
(b) such Credit Card Receivables are not past due for more than five Business Days past the date such Credit Card Receivables were created;
(c) such Credit Card Receivables are not unpaid more than five Business Days after they are created;
(d) the Credit Card Issuer or Credit Card Processor obligated in respect of such Credit Card Receivable has not failed to remit any monthly payment in respect of such Credit Card Receivable;
(e) the Credit Card Issuer or Credit Card Processor with respect to such Credit Card Receivables has not asserted a counterclaim, defense or dispute against such Credit Card Receivables (other than customary set-offs to fees and chargebacks consistent with the practices of such Credit Card Issuer or Credit Card Processor with such Person from time to time), but the portion of the Credit Card Receivables owing by such Credit Card Issuer or Credit Card Processor in excess of the amount owing by such Person to such Credit Card Issuer or Credit Card Processor pursuant to such fees and chargebacks shall be deemed Eligible Credit Card Receivables;
(f) the Credit Card Issuer or Credit Card Processor with respect to such Credit Card Receivables has not set off against amounts otherwise payable by such Credit Card Issuer or Credit Card Processor to such Person for the purpose of establishing a reserve or collateral for obligations of such Person to such Credit Card Issuer or Credit Card Processor (other than customary set-offs and chargebacks consistent with the practices of such Credit Card Issuer or Credit Card Processor from time to time) but the portion of the Credit Card Receivables owing by such Credit Card Issuer or Credit Card Processor in excess of the set-off amounts shall be deemed Eligible Credit Card Receivables;
(g) such Credit Card Receivables ( x ) are owned by a Loan Party and such Loan Party has a good, valid and marketable title to such Credit Card Receivables and ( y ) are subject to a valid and perfected first priority Lien (subject only to Permitted Prior Liens and, without duplication, Liens for Canadian Priority Payables that are unregistered and that secure amounts that are not yet due and payable, and subsections 8.2(d) and 8.2(i) ) in favor of the ABL Collateral Agent pursuant to a Security Document;
(h) the Credit Card Issuer or Credit Card Processor with respect to such Credit Card Receivables is not subject to an event of the type described in subsection 9(f) ;
 
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(i) no event of default has occurred under the Credit Card Agreement of such Loan Party with the Credit Card Issuer or Credit Card Processor who has issued the credit card or debit card or handles payments under the credit card or debit card used in the sale which gave rise to such Credit Card Receivables which event of default gives such Credit Card Issuer or Credit Card Processor the right to cease or suspend payments to such Loan Party;
(j) the customer using the credit card or debit card giving rise to such Credit Card Receivable shall not have returned the merchandise purchased giving rise to such Credit Card Receivable;
(k) to the extent required by subsection 4.16(b) , the Credit Card Receivables are subject to Credit Card Notifications;
(l) the Credit Card Processor is organized and has its principal offices or assets within the United States or Canada or is otherwise acceptable to the Administrative Agent in its Permitted Discretion;
(m) such Credit Card Receivables are not evidenced by chattel paper or an instrument of any kind, and have not been reduced to judgment;
(n) except as otherwise approved by the Administrative Agent, Credit Card Receivables due from Credit Card Processors as to which and solely to the extent the Credit Card Processor has not exercised a right to require a Loan Party to repurchase the Credit Card Receivables from such Credit Card Processor; and
(o) the portion of such Credit Card Receivables that does not include a billing for interest, fees or late charges.
Notwithstanding the foregoing, the Administrative Agent may, from time to time, in the exercise of its Permitted Discretion, on not less than 10 Business Days’ prior notice to the Borrower Representative, change the criteria for Eligible Credit Card Receivables as reflected on the Borrowing Base Certificate based on either ( i ) an event, condition or other circumstance arising after the Closing Date or ( ii ) an event, condition or other circumstance existing on the Closing Date to the extent the Administrative Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, Eligible Credit Card Receivables in any material respect as determined by the Administrative Agent in the exercise of its Permitted Discretion. Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change. Upon delivery of the notice of such change pursuant to the foregoing sentence, the Administrative Agent shall be available to discuss the proposed change, and the applicable Loan Party may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion.
 
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“ Eligible In-Transit Inventory ”: as of any date of determination, without duplication of other Eligible Inventory or Eligible Letter of Credit Inventory, Inventory of the Loan Parties which meets the following criteria:
(a) such Inventory has been shipped from any foreign location to a United States location (with respect to Eligible U.S. In-Transit Inventory for receipt by a U.S. Loan Party) or to a Canadian location (with respect to Eligible Canadian In-Transit Inventory for receipt by a Canadian Loan Party) within 60 days of the date of determination and has not yet been received by a Loan Party;
(b) the purchase order for such Inventory is in the name of a Loan Party and title has passed to such Loan Party;
(c) such Inventory is subject to a negotiable document of title, in form reasonably satisfactory to the Administrative Agent, which shall, except as otherwise agreed by the Administrative Agent in its Permitted Discretion, have been endorsed to the Administrative Agent or an agent acting on its behalf;
(d) with respect to ( x ) In-Transit Inventory owned by the U.S. Loan Parties with a Net Orderly Liquidation Value or Value as applicable for purposes of calculating the relevant Borrowing Base in excess of $30,000,000 in the aggregate and (y) In-Transit Inventory owned by the Canadian Borrower and the Canadian Subsidiary Guarantors with a Net Orderly Liquidation Value or Value as applicable for purposes of calculating the relevant Borrowing Base in excess of the Dollar Equivalent of $15,000,000 in the aggregate, in each case ( i ) each relevant freight carrier, freight forwarder, customs broker, shipping company or other Person in possession of such Inventory and/or the documents relating to such Inventory, in each case, as reasonably requested by the Administrative Agent shall have entered into a Customs Broker Agreement and ( ii ) as reasonably requested by the Administrative Agent, the documents relating to such Inventory shall be in the possession of the Administrative Agent or an agent (or sub-agent) (which is not an Affiliate of a Loan Party) acting on its behalf;
(e) such Inventory is insured in accordance with the provisions of this Agreement and the other Loan Documents, including marine cargo insurance;
(f) such Inventory is subject, to the reasonable satisfaction of the Administrative Agent to a valid and perfected first priority Lien (subject only to Permitted Prior Liens and, without duplication, Liens for Canadian Priority Payables that are unregistered and that secure amounts that are not yet due and payable) in favor of the ABL Collateral Agent pursuant to the relevant Security Document (as and to the extent provided therein); and
(g) such Inventory is not excluded from the definition of “Eligible Inventory” (except solely pursuant to clause (l) or (m) thereof or, to the extent they would exclude In-Transit Inventory otherwise eligible under clause (d) hereof for reasons relating to creation, perfection or priority of Liens, clause (c) or clause (i) thereof).
 
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Eligible In-Transit Inventory shall not include Inventory accounted for as “in transit” by the applicable Loan Party by virtue of such Inventory’s being in transit between the Loan Parties’ locations or in storage trailers at Loan Parties’ locations; rather, such Inventory shall be treated as “Eligible Inventory” if it satisfies the conditions therefor.
Notwithstanding the foregoing, the Administrative Agent may, from time to time, in the exercise of its Permitted Discretion, on not less than 10 Business Days’ prior notice to the Borrower Representative, change the criteria for Eligible In-Transit Inventory as reflected on the Borrowing Base Certificate based on either ( i ) an event, condition or other circumstance arising after the Closing Date or ( ii ) an event, condition or other circumstance existing on the Closing Date to the extent the Administrative Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, Eligible In-Transit Inventory in any material respect as determined by the Administrative Agent in the exercise of its Permitted Discretion. Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change. Upon delivery of the notice of such change pursuant to the foregoing sentence, the Administrative Agent shall be available to discuss the proposed change, and the applicable Loan Party may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion.
“ Eligible Inventory ”: all Inventory of the Loan Parties, except for any Inventory:
(a) that is obsolete, damaged, work-in-progress, unfit for sale or does not meet all standards imposed by any Governmental Authority, having regulatory authority over such goods, regarding their use or sale;
(b) that is not of a type held for sale by any of the Loan Parties in the ordinary course of business as is being conducted by each such party;
(c) that is not subject to a valid and perfected first priority Lien (subject only to Permitted Prior Liens and, without duplication, Liens for Canadian Priority Payables that are unregistered and that secure amounts that are not yet due and payable) in favor of the ABL Collateral Agent pursuant to a Security Document (as and to the extent provided therein (it being agreed that in no event shall any Excluded Assets be deemed to be Eligible Inventory hereunder));
(d) that is not owned by any of the Loan Parties (including, without limitation, any Inventory consigned to such Loan Party that is included in the books and records of such Loan Party as Inventory of such Loan Party);
(e) that is placed on consignment (including with customers, but excluding arrangements described under clause (f) below); provided that consigned Inventory shall not be excluded by virtue of this clause (e) if ( i ) such Loan Party has a perfected purchase money security interest in such Inventory and such security interest is assigned to the Administrative Agent and ( ii ) such Inventory is segregated at the consignee’s location; provided further that ( x ) the conditions set forth in clause (i) of this clause (e) shall not be
 
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required to be satisfied with respect to consigned Inventory ( A ) not in excess of the Dollar Equivalent of $3,000,000 at any one location and ( B ) not in excess of $35,000,000 in the aggregate for all locations described in the immediately preceding clause (A) and ( y ) the conditions set forth in clause (i) of this clause (e) shall be waived for the first 120 days following the Closing Date (or such longer period as may be agreed by the Administrative Agent in its reasonable discretion); provided , that Inventory included as Eligible Inventory pursuant to this clause (e) shall not exceed the Dollar Equivalent of $100,000,000 at any one time;
(f) that is held at a processor, converter or printer; provided that Inventory held at a processor, converter or printer shall not be excluded by virtue of this clause (f) if ( i ) such Inventory is segregated at such processor, converter or printer and ( ii ) such processor, converter or printer has executed and delivered to the Administrative Agent a Collateral Access Agreement; provided further that ( x ) the condition set forth in clause (ii) of this clause (f) shall not be required to be satisfied with respect to Inventory held at a processor, converter or printer not in excess of the Dollar Equivalent of $1,500,000 at any one location and ( y ) the condition set forth in clause (ii) of this clause (f) shall be waived for the first 120 days following the Closing Date (or such longer period as may be agreed by the Administrative Agent in its reasonable discretion); provided further that Inventory deemed to be Eligible Inventory pursuant to this clause (f) shall not exceed the Dollar Equivalent of $50,000,000 at any one time;
(g) that consists of work-in-progress, raw materials, display items, samples, prototypes or packing or shipping materials, packaging, manufacturing supplies, chemicals not held for resale, or replacement or spare parts not considered for sale in the ordinary course of business;
(h) that consists of goods which have been returned by the buyer, other than goods that are undamaged or that are resaleable in the ordinary course of business;
(i) that does not comply in all material respects with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents;
(j) that is covered by negotiable document of title, unless such document has been delivered to the Administrative Agent;
(k) that is bill and hold Inventory;
(l) that is located outside the United States of America (with respect to the Eligible U.S. Inventory) or Canada (with respect to the Eligible Canadian Inventory);
(m) that is In-Transit Inventory or Letter of Credit Inventory;
(n) that is located in a public warehouse or in possession of a bailee or in a facility leased by a Loan Party, provided that no Inventory shall be excluded by virtue of this clause (n) ( i ) if ( x ) the warehouseman, or the bailee or the lessor has delivered to the Administrative Agent a Collateral Access Agreement in form and substance reasonably
 
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satisfactory to the Administrative Agent or ( y ) an Availability Reserve for rents or storage charges (in an amount for any location not to exceed at any time 3 months’ rent or storage charges plus any then unpaid rent or storage charges owing with respect to such location or such lower amount as the Administrative Agent deems appropriate in its reasonable commercial judgment exercised in good faith) has been established for Inventory at that location, or ( ii ) if the Administrative Agent has requested neither a collateral access agreement nor a rent reserve for Inventory at that location; provided further that the condition set forth in clause (i) of this clause (n) shall be waived for the first 120 days following the Closing Date (or such longer period as may be agreed by the Administrative Agent in its reasonable discretion);
(o) that contains or bears any other Intellectual Property rights licensed to a Loan Party by any Person pursuant to a royalty-bearing license, if the Administrative Agent is not satisfied that it may sell or otherwise dispose of such Inventory in accordance with the terms of the applicable Security Agreement and this Agreement without infringing the rights of the licensor of such Intellectual Property rights or violating any contract with such licensor (and without payment of any royalties other than any royalties due with respect to the sale or disposition of such Inventory pursuant to the existing license agreement), and, as to which such Loan Party has not delivered to the Administrative Agent a consent or sublicense agreement from such licensor in form and substance acceptable to the Administrative Agent if requested;
(p) that is not reflected in the details of a current perpetual inventory report or a detailed inventory listing;
(q) that is a mill return; or
(r) that consists of Materials of Environmental Concern that can be transported or sold only with licenses that are not readily available.
Notwithstanding the foregoing, the Administrative Agent may, from time to time, in the exercise of its Permitted Discretion, on not less than 10 Business Days’ prior notice to the Borrower Representative, change the criteria for Eligible Inventory as reflected on the Borrowing Base Certificate based on either (i) an event, condition or other circumstance arising after the Closing Date or (ii) an event, condition or other circumstance existing on the Closing Date to the extent the Administrative Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, Eligible Inventory in any material respect as determined by the Administrative Agent in the exercise of its Permitted Discretion. Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change. Upon delivery of the notice of such change pursuant to the foregoing sentence, the Administrative Agent shall be available to discuss the proposed change, and the applicable Loan Party may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion.
 
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“ Eligible Letter of Credit Inventory ”: Letter of Credit Inventory owned or to be owned by a Loan Party and which is (a) when applicable, fully insured and subject to a valid and perfected first priority Lien (subject only to Permitted Prior Liens and, without duplication, Liens for Canadian Priority Payables that are unregistered and that secure amounts that are not yet due and payable) in favor of the ABL Collateral Agent pursuant to a Security Document (as and to the extent provided therein), (b) subject to a Letter of Credit with an expiry date that is not more than 60 days from the date of the most recently delivered Borrowing Base Certificate and ( c ) Inventory that, when received, would otherwise satisfy all of the requirements of Eligible Inventory hereunder. For the avoidance of doubt, Eligible Letter of Credit Inventory is without duplication of Eligible In-Transit Inventory.
“ Eligible U.S. Accounts ”: the Eligible Accounts owned by the U.S. Borrowers and the U.S. Subsidiary Guarantors.
“ Eligible U.S. Credit Card Receivables ”: the Eligible Credit Card Receivables owned by the U.S. Borrowers and the U.S. Subsidiary Guarantors.
“ Eligible U.S. In-Transit Inventory ”: the Eligible In-Transit Inventory owned by the U.S. Borrowers and the U.S. Subsidiary Guarantors.
“ Eligible U.S. Inventory ”: the Eligible Inventory owned by the U.S. Borrowers and the U.S. Subsidiary Guarantors.
“ Eligible U.S. Letter of Credit Inventory ”: the Eligible Letter of Credit Inventory owned by the U.S. Borrowers and the U.S. Subsidiary Guarantors.
“ Environmental Costs ”: any and all costs or expenses (including attorney’s and consultant’s fees, investigation and laboratory fees, response costs, court costs and litigation expenses, fines, penalties, damages, settlement payments, judgments and awards), of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way relating to, any actual or alleged violation of, noncompliance with or liability under any Environmental Laws. Environmental Costs include any and all of the foregoing, without regard to whether they arise out of or are related to any past, pending or threatened proceeding of any kind.
“ Environmental Laws ”: any and all U.S., Canadian or foreign federal, state, provincial, territorial, local or municipal laws, rules, orders, enforceable guidelines, orders-in-council, regulations, statutes, ordinances, codes, decrees and such requirements of any Governmental Authority properly promulgated and having the force and effect of law or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of human health (as it relates to exposure to Materials of Environmental Concern) or the environment, including those relating to the Release or threatened Release of Materials of Environmental Concern, as have been, or now or at any relevant time hereafter are, in effect.
“ Environmental Permits ”: any and all permits, licenses, registrations, notifications, exemptions and any other authorization required under any Environmental Law.
 
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“ Equity Offering ”: a sale of Capital Stock (x) that is a sale of Capital Stock of the Parent Borrower (other than Disqualified Stock) or (y) the proceeds of which are contributed to the equity capital of the Parent Borrower or any of its Restricted Subsidiaries.
“ ERISA ”: the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ Eurocurrency Base Rate ”: the per annum rate of interest (rounded up, if necessary, to the nearest 1/8th of 1.0%) determined by the Administrative Agent at or about 11:00 a.m. (London time) two Business Days prior to an Interest Period, for a term equivalent to such period, equal to the London Interbank Offered Rate, or comparable or successor rate approved by Agent, as published on the applicable Reuters screen page (or other commercially available source designated by the Administrative Agent from time to time); provided , that any such comparable or successor rate shall be applied by the Administrative Agent, if administratively feasible, in a manner consistent with market practice.
“ Eurocurrency Loans ”: Loans the rate of interest applicable to which is based upon the Eurocurrency Rate.
“ Eurocurrency Rate ”: with respect to each day during each Interest Period pertaining to a Eurocurrency Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1.0%):

	 	Eurocurrency Base Rate	 		
	 	1.00 – Eurocurrency Reserve Requirements	 		
“ Eurocurrency Reserve Requirements ”: for any day as applied to a Eurodollar Loan, the average maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the United States Federal Reserve System in New York City with deposits exceeding $1,000,000,000 against “Eurocurrency liabilities” (as such term is used in Regulation D). Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and to be subject to such reserve requirements without benefit of or credit for proration, exceptions or offsets which may be available from time to time to any Lender under Regulation D.
“ Event of Default ”: any of the events specified in Section 9 , provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied.
“ Excess Availability ”: at the date of determination thereof by the Administrative Agent, (x) the Maximum Borrowing Amount minus (y) the Aggregate Credit Extensions.
“ Exchange Act ”: the Securities Exchange Act of 1934, as amended from time to time.
“ Excluded Accounts ”: (a) deposit accounts the balance of which consists exclusively of and used exclusively for (i) withheld income taxes and federal, provincial, territorial, state or local employment taxes in such amounts as are required in the reasonable judgment of the Parent Borrower to be paid to the Internal Revenue Service or state or local government agencies or the
 
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Canada Revenue Agency or provincial, territorial or local government agencies within the following two months with respect to employees of any of the Loan Parties and (ii) amounts required to be paid over to a Plan pursuant to Department of Labor Regulation Section 2510.3-102 on behalf of or for the benefit of employees of one or more Loan Parties, (b) deposit accounts constituting (and the balance of which consists solely of funds set aside to be used in connection with) taxes accounts and payroll accounts and (c) petty cash accounts established (or otherwise maintained) by the Parent Borrower and its Subsidiaries that do not have cash balances at any time exceeding $1,000,000 in the aggregate for all such petty cash accounts.
“ Excluded Assets ”: as defined in the U.S. Guarantee and Collateral Agreement and the Canadian Guarantee and Collateral Agreement.
“ Excluded Subsidiary ”: any ( a ) Special Purpose Subsidiary, ( b ) Subsidiary of a Foreign Subsidiary other than any Canadian or U.S. Subsidiary of a Canadian Subsidiary, ( c ) Unrestricted Subsidiary, ( d ) Immaterial Subsidiary, ( e ) Dormant Subsidiary, ( f ) Captive Insurance Subsidiary, ( g ) Domestic Subsidiary or Canadian Subsidiary that, at the time such Subsidiary becomes a Restricted Subsidiary (and for so long as such restriction or any replacement or renewal thereof is in effect), is prohibited by any applicable Contractual Obligation or Requirement of Law from guaranteeing or granting Liens to secure the Obligations hereunder or if guaranteeing, or granting Liens to secure the Obligations hereunder would require governmental (including regulatory) consent, approval, license or authorization unless such consent, approval, license or authorization has been received, ( h ) joint venture or Subsidiary that is not a Wholly-Owned Subsidiary, ( i ) Subsidiary formed solely for the purpose of ( x ) becoming a Parent, or ( y ) merging with the Parent Borrower or the OpCo Borrower in connection with another Subsidiary becoming a Parent, in each case to the extent such entity becomes a Parent or is merged with the Parent Borrower or the OpCo Borrower or any Parent within 60 days of the formation thereof, or otherwise creating or forming a Parent or ( j ) Domestic Subsidiary or Canadian Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent (confirmed in writing by notice to the Borrower Representative), the cost or other consequences (including any adverse tax consequences) of providing a Guarantee of the Obligations hereunder shall be excessive in view of the benefits to be obtained by the Lenders therefrom; provided that any Subsidiary that fails to meet the requirement in clause (d) as of the last day of the most recent four consecutive fiscal quarters for which consolidated financial statements of the Parent Borrower are available shall continue to be deemed an Excluded Subsidiary hereunder until the date that is 60 days following the date on which such financial statements were required to be delivered pursuant to subsection 7.1 with respect to such period.
“ Excluded Taxes ”: any (a) Taxes measured by or imposed upon the net income of any Agent, Issuing Lender, or Lender or its applicable lending office, or any branch or affiliate thereof, (b) franchise Taxes, branch Taxes, Taxes on doing business or Taxes measured by or imposed upon the overall capital or net worth of any Agent, Issuing Lender or Lender or its applicable lending office, or any branch or affiliate thereof, in each case imposed by the jurisdiction under the laws of which such Agent, Issuing Lender, or Lender, applicable lending office, branch or affiliate is organized or is located, or in which its principal executive office is located, or any nation within which such jurisdiction is located or any political subdivision thereof, (c) Taxes imposed by reason of any connection between the jurisdiction imposing such
 
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Tax and any Agent, Issuing Lender, or Lender, applicable lending office, branch or affiliate other than a connection arising solely from such Agent, Issuing Lender, or Lender having executed, delivered or performed its obligations under, or received payment under or enforced, this Agreement or any other Loan Document and (d) Taxes imposed under FATCA.
“ Existing Commitment ”: as defined in subsection 2.7(a) .
“ Existing Letters of Credit ”: Letters of Credit issued prior to, and outstanding on, the Closing Date and disclosed on Schedule 1.1E .
“ Existing Loans ”: as defined in subsection 2.7(a) .
“ Existing Tranche ”: as defined in subsection 2.7(a) .
“ Extended Commitments ”: as defined in subsection 2.7(a) .
“ Extended Loans ”: as defined in subsection 2.7(a) .
“ Extending Lender ”: as defined in subsection 2.7(b) .
“ Extension Amendment ”: as defined in subsection 2.7(c) .
“ Extension Date ”: as defined in subsection 2.7(d) .
“ Extension Election ”: as defined in subsection 2.7(b) .
“ Extension of Credit ”: as to any Lender, the making of, or, in the case of subsection 2.4(d)(ii) , participation in, a Loan by such Lender or the issuance of, or participation in, a Letter of Credit by such Lender.
“ Extension Request ”: as defined in subsection 2.7(a) .
“ Facility ”: each of the ABL Facility (including the Commitments and the Extensions of Credit made hereunder) and any other committed facility hereunder.
“ Fair Market Value ”: with respect to any asset or property, the fair market value of such asset or property as determined in good faith by a Responsible Officer of the Parent Borrower, whose determination will be conclusive.
“ FATCA ”: means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with any of the foregoing and any fiscal or regulatory legislation, rules or practices adopted pursuant to any such intergovernmental agreement.
“ Federal Funds Effective Rate ”: (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal
 
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funds brokers on the applicable Business Day (or on the preceding Business Day, if the applicable day is not a Business Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded up, if necessary, to the nearest 1/8 of 1%) charged to the Administrative Agent on the applicable day on such transactions, as determined by the Administrative Agent.
“ FILO Tranche ”: as defined in subsection 2.6(d)(ii) .
“ Financing Disposition ”: any sale, transfer, conveyance or other disposition of, or creation or incurrence of any Lien on, property or assets that are not ABL Priority Collateral (i) by the Parent Borrower or any Subsidiary thereof to or in favor of any Special Purpose Entity, or by any Special Purpose Subsidiary, in each case in connection with the Incurrence by a Special Purpose Entity of Indebtedness, or obligations to make payments to the obligor on Indebtedness, which may be secured by a Lien in respect of such property or assets or (ii) by the Parent Borrower or any Subsidiary thereof to or in favor of any Special Purpose Entity that is not a Special Purpose Subsidiary.
“ FIRREA ”: the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time.
“ First Draw ”: the initial draw under this facility all or part of which will be used to finance the Special Payment.
“ Flood Program ”: shall mean the National Flood Insurance Program created by the U.S. Congress pursuant to the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, the National Flood Insurance Reform Act of 1994 and the Flood Insurance Reform Act of 2004, in each case as amended from time to time, and any successor statutes.
“ Flood Zone ”: shall mean areas having special flood hazards as described in the National Flood Insurance Act of 1968, as amended from time to time, and any successor statute.
“ Foreign Pension Plan ”: a registered pension plan, other than a Canadian Pension Plan, which is subject to applicable pension legislation other than ERISA or the Code, which a Subsidiary of the Parent Borrower sponsors or maintains, or to which it makes or is obligated to make contributions.
“ Foreign Plan ”: each Foreign Pension Plan, deferred compensation or other retirement or superannuation plan, fund, program, agreement, commitment or arrangement whether oral or written, funded or unfunded, sponsored, established, maintained or contributed to, or required to be contributed to, or with respect to which any liability is borne, outside the United States of America or Canada, by the Parent Borrower or any of its Subsidiaries, other than any such plan, fund, program, agreement or arrangement sponsored by a Governmental Authority.
“ Foreign Subsidiary ”: (i) any Restricted Subsidiary of the Parent Borrower that is not organized under the laws of the United States of America or any state thereof or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary and (ii) any Foreign Subsidiary Holdco.
 
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“ Foreign Subsidiary Holdco ”: any Restricted Subsidiary of the Parent Borrower all or substantially all of whose assets consist of securities or Indebtedness of one or more Foreign Subsidiaries (or Subsidiaries thereof), intellectual property relating to such Foreign Subsidiaries (or Subsidiaries thereof) and other assets relating to an ownership interest in any such securities, Indebtedness, intellectual property or Subsidiaries.
“ GAAP ”: generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession, and subject to subsection 1.3 and the following: If at any time the SEC permits or requires U.S. domiciled companies subject to the reporting requirements of the Exchange Act to use IFRS in lieu of GAAP for financial reporting purposes, the Borrower may elect by written notice to the Administrative Agent to so use IFRS in lieu of GAAP and, upon any such notice, references herein to GAAP shall thereafter be construed to mean (a) for periods beginning on and after the date specified in such notice, IFRS as in effect from time to time and (b) for prior periods, GAAP as defined in the first sentence of this definition. All ratios and computations based on GAAP contained in this Agreement shall be computed in conformity with GAAP.
“ Georgia-Pacific ”: Georgia-Pacific LLC, or any successor in interest thereto.
“ Governmental Authority ”: any nation or government, any state, province, territory or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the European Union.
“ Guarantee ”: any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.
“ Guarantee Obligation ”: as to any Person (the “ guaranteeing person ”), any obligation of ( a ) the guaranteeing person or ( b ) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “ primary obligations ”) of any other third Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including any such obligation of the guaranteeing person, whether or not contingent, ( i ) to purchase any such primary obligation or any property constituting direct or indirect security therefor, ( ii ) to advance or supply funds ( A ) for the purchase or payment of any such primary obligation or ( B ) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, ( iii ) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or ( iv ) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided , however , that the term Guarantee Obligation shall not include endorsements of instruments for
 
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deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of ( a ) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and ( b ) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower Representative in good faith.
“ Guarantors ”: the collective reference to Holding, each Canadian Subsidiary Guarantor (solely with respect to the obligations of the Canadian Borrower hereunder and under each other Loan Document) and each U.S. Subsidiary Guarantor, in each case that is from time to time party to the U.S. Guarantee and Collateral Agreement or the Canadian Guarantee and Collateral Agreement, as applicable; individually, a “ Guarantor .”
“ Hedge Termination Value ”: in respect of any one or more Qualified Secured Bank Product Obligations, after taking into account the effect of any legally enforceable netting agreement relating to such Qualified Secured Bank Product Obligations, ( a ) for any date on or after the date such Qualified Secured Bank Product Obligations have been closed out and termination value(s) determined in accordance therewith, such termination value(s) to the extent not yet paid, and ( b ) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Qualified Secured Bank Product Obligations, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Qualified Secured Bank Product Obligations (which may include a Lender or any Affiliate or branch of a Lender).
“ Hedging Obligations ”: with respect to any Loan Party, the Indebtedness and other obligations of such Loan Party pursuant to any Interest Rate Agreement, Currency Agreement or Commodities Agreement.
“ Holding ”: ( i ) prior to the Parent Merger, SpinCo and ( ii ) following the Parent Merger, SpinCo as surviving corporation of the Parent Merger, and in each case any successor in interest thereto.
“ Holding Parent ”: as defined in the recitals hereto.
“ IFRS ”: International Financial Reporting Standards and applicable accounting requirements set by the International Accounting Standards Board or any successor thereto (or the Financial Accounting Standards Board, the Accounting Principles Board of the American Institute of Certified Public Accountants, or any successor to either such Board, or the SEC, as the case may be), as in effect from time to time.
“ Immaterial Subsidiary ”: ( i ) any Subsidiary of the Parent Borrower existing on the Closing Date with the consent of the Administrative Agent and ( ii ) any Subsidiary of the Parent Borrower organized or acquired after the Closing Date, in the case of each of (i) and (ii) designated by the Parent Borrower to the Administrative Agent in writing that had ( a ) total
 
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consolidated revenues of less than 2.5% of the total consolidated revenues of the Parent Borrower and its Subsidiaries during the most recently completed period of four consecutive fiscal quarters of the Parent Borrower and ( b ) total consolidated assets of less than 2.5% of the total consolidated assets of the Parent Borrower and its Subsidiaries as of the last day of such period; provided that ( x ) for purposes of subsection 7.9 , any Special Purpose Subsidiary shall be deemed to be an “Immaterial Subsidiary,” and ( y ) Immaterial Subsidiaries (other than any Special Purpose Subsidiary) shall not, in the aggregate, ( 1 ) have had revenues in excess of 10% of the total consolidated revenues of the Parent Borrower and its Subsidiaries during the most recently completed period of four consecutive fiscal quarters or ( 2 ) have had total assets in excess of 10% of the total consolidated assets of the Parent Borrower and its Subsidiaries as of the last day of such period. Any Subsidiary so designated as an Immaterial Subsidiary that fails to meet the foregoing as of the last day of any such four consecutive fiscal quarter period shall continue to be deemed an “Immaterial Subsidiary” hereunder until the date that is 60 days following the delivery of annual or quarterly financial statements pursuant to subsection 7.1 with respect to the last quarter of such four consecutive fiscal quarter period.
“ Incremental ABL Term Loans ”: as defined in subsection 2.6(a) .
“ Incremental Commitment Amendment ”: as defined in subsection 2.6(f)(ii) .
“ Incremental Facility ” and “ Incremental Facilities ”: as defined in subsection 2.6(a) .
“ Incremental Facility Increase ”: as defined in subsection 2.6(a) .
“ Incremental Indebtedness ”: Indebtedness incurred by any Borrower pursuant to and in accordance with subsection 2.6 .
“ Incremental Revolving Commitment Effective Date ”: as defined in subsection 2.6(f)(i) .
“ Incremental Revolving Commitments ”: as defined in subsection 2.6(a) .
“ Incur ”: issue, assume, enter into any Guarantee of, incur or otherwise become liable for; and the terms “ Incurs ,” “ Incurred ” and “ Incurrence ” shall have correlative meanings; provided that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and the payment of dividends on Capital Stock constituting Indebtedness in the form of additional shares of the same class of Capital Stock, will not be deemed to be an Incurrence of Indebtedness. Any Indebtedness issued at a discount (including Indebtedness on which interest is payable through the issuance of additional Indebtedness) shall be deemed Incurred at the time of original issuance of the Indebtedness at the initial accreted amount thereof.
“ Indebtedness ”: with respect to any Person on any date of determination (without duplication):
(i) the principal of indebtedness of such Person for borrowed money,
 
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(ii) the principal of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all reimbursement obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (the amount of such obligations being equal at any time to the aggregate then undrawn and unexpired amount of such letters of credit, bankers’ acceptances or other instruments plus the aggregate amount of drawings thereunder that have not then been reimbursed),
(iv) all obligations of such Person to pay the deferred and unpaid purchase price of property (except Trade Payables), which purchase price is due more than one year after the date of placing such property in final service or taking final delivery and title thereto,
(v) all Capitalized Lease Obligations of such Person,
(vi) the redemption, repayment or other repurchase amount of such Person with respect to any Disqualified Stock of such Person or (if such Person is a Subsidiary of the Parent Borrower other than a Subsidiary Borrower or a Subsidiary Guarantor) any Preferred Stock of such Subsidiary, but excluding, in each case, any accrued dividends (the amount of such obligation to be equal at any time to the maximum fixed involuntary redemption, repayment or repurchase price for such Capital Stock, or if less (or if such Capital Stock has no such fixed price), to the involuntary redemption, repayment or repurchase price therefor calculated in accordance with the terms thereof as if then redeemed, repaid or repurchased, and if such price is based upon or measured by the fair market value of such Capital Stock, such fair market value shall be the Fair Market Value or the fair market value as determined in good faith by the board of directors or other governing body of the issuer of such Capital Stock),
(vii) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided that the amount of Indebtedness of such Person shall be the lesser of ( A ) the Fair Market Value of such asset at such date of determination and ( B ) the amount of such Indebtedness of such other Persons,
(viii) all Guarantees by such Person of Indebtedness of other Persons, to the extent so Guaranteed by such Person, and
(ix) to the extent not otherwise included in this definition, net Hedging Obligations of such Person (the amount of any such obligation to be equal at any time to the termination value of such agreement or arrangement giving rise to such Hedging Obligation that would be payable by such Person at such time);
provided that Indebtedness shall not include Contingent Obligations Incurred in the ordinary course of business.
 
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The amount of Indebtedness of any Person at any date shall be determined as set forth above or otherwise provided in this Agreement, or otherwise shall equal the amount thereof that would appear as a liability on a balance sheet of such Person (excluding any notes thereto) prepared in accordance with GAAP.
“ Indemnified Liabilities ”: as defined in subsection 11.5 .
“ Indemnitee ”: as defined in subsection 11.5 .
“ Insolvency ”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.
“ Intellectual Property ”: as defined in subsection 5.9 .
“ Intercreditor Agreement ”: the Base Intercreditor Agreement or any Other Intercreditor Agreement, as applicable.
“ Interest Payment Date ”: ( a ) as to any ABR Loan, the first day of each January, April, July and October to occur while such Loan is outstanding, and the final maturity date of such Loan, ( b ) as to any Eurocurrency Loan or BA Equivalent Loan having an Interest Period of three months or less, the last day of such Interest Period and ( c ) as to any Eurocurrency Loan or BA Equivalent Loan having an Interest Period longer than three months, ( i ) each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and ( ii ) the last day of such Interest Period.
“ Interest Period ”: with respect to any Eurocurrency Loan or BA Equivalent Loan:
(a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurocurrency Loan or BA Equivalent Loan and ending two weeks (in the case of BA Equivalent Loans), one month, two months, three months or six months, or, if available to all relevant Lenders, one week, nine months or 12 months, as selected by the Borrower Representative in their respective notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurocurrency Loan or BA Equivalent Loan and ending two weeks (in the case of BA Equivalent Loans), one month, two months, three months or six months, or, if available to all relevant Lenders, one week, nine months or 12 months, as selected by the Borrower Representative by irrevocable notice to the Administrative Agent , not less than three Business Days prior to the last day of the then current Interest Period with respect thereto;
provided that all of the foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;
 
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(ii) any Interest Period that would otherwise extend beyond the Maturity Date shall end on the Maturity Date;
(iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower Representative shall select Interest Periods so as not to require a scheduled payment of any Eurocurrency Loan or BA Equivalent Loan during an Interest Period for such Loan.
“ Interest Rate Agreement ”: with respect to any Person, any interest rate protection agreement, future agreement, option agreement, swap agreement, cap agreement, collar agreement, hedge agreement or other similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is party or a beneficiary.
“ International Paper ”: as defined in the recitals hereto.
“ In-Transit Inventory ”: Inventory located outside of (with respect to Eligible U.S. In-Transit Inventory) the United States or (with respect to Eligible Canadian In-Transit Inventory) Canada or in transit from a location outside of the United States or Canada, as applicable, to a Loan Party from vendors and suppliers that has not yet been received into a distribution center or store of such Person.
“ Inventory ”: inventory (as such term is defined in Article 9 of the UCC) or (to the extent governed thereby) the PPSA as in effect from time to time.
“ Investment ”: with respect to any Person by any other Person, any direct or indirect advance, loan or other extension of credit (other than to customers, dealers, licensees, franchisees, suppliers, consultants, directors, officers or employees of any Person in the ordinary course of business) or capital contribution (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others) to, or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person. For purposes of the definition of “Unrestricted Subsidiary” and subsection 8.5 only,
(i) “Investment” shall include the portion (proportionate to the Parent Borrower’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Parent Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary, provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Parent Borrower shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to ( x ) the Parent Borrower’s “Investment” in such Subsidiary at the time of such redesignation less ( y ) the portion (proportionate to the Parent Borrower’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation,
 
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(ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, and
(iii) for purposes of subsection 8.5(a)(3)(C) the amount resulting from the redesignation of any Unrestricted Subsidiary as a Restricted Subsidiary shall be the Fair Market Value of the Investment in such Unrestricted Subsidiary at the time of such redesignation (excluding the amount of such Investment then outstanding pursuant to clause (q) or (u) of the definition of the term “Permitted Investments” or clause (iv) or (vii) of subsection 8.5(b) .
Guarantees shall not be deemed to be Investments. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at the Parent Borrower’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment; provided that, to the extent that the amount of Restricted Payments outstanding at any time pursuant to subsection 8.5(a) is so reduced by any portion of any such amount or value that would otherwise be included in the calculation of Consolidated Net Income, such portion of such amount or value shall not be so included for purposes of calculating the amount of Restricted Payments that may be made pursuant to subsection 8.5(a) .
“ Investment Company Act ”: the Investment Company Act of 1940, as amended from time to time.
“ Investment Grade Rating ”: a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or any equivalent rating by any other Rating Agency.
“ Investment Grade Securities ”: ( i ) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents); ( ii ) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the Parent Borrower and its Subsidiaries; ( iii ) investments in any fund that invests exclusively in investments of the type described in clauses (i) and (ii), which fund may also hold immaterial amounts of cash pending investment or distribution; and ( iv ) corresponding instruments in countries other than the United States customarily utilized for high quality investments.
“ Investors ”: ( i ) Bain Capital Investors and Georgia-Pacific and ( ii ) any of their respective legal successors.
“ ISP ”: the International Standby Practices (1998), International Chamber of Commerce Publication No. 590.
“ Issuing Lender ”: any Canadian Facility Issuing Lender or any U.S. Facility Issuing Lender.
 
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“ Joinder Agreement ”: a joinder in substantially the form of Exhibit B hereto, to be executed by each Borrower designated as such after the Closing Date.
“ Judgment Conversion Date ”: as defined in subsection 11.8(a) .
“ Judgment Currency ”: as defined in subsection 11.8(a) .
“ L/C Facing Fee ”: as defined in subsection 3.3(a) .
“ L/C Fee ”: as defined in subsection 3.3(a) .
“ L/C Fee Payment Date ”: with respect to any Letter of Credit, the first day of each January, April, July and October to occur after the date of issuance thereof to and including the first such day to occur on or after the date of expiry thereof.
“ L/C Obligations ”: the U.S. Facility L/C Obligations and the Canadian Facility L/C Obligations, collectively.
“ L/C Participants ”: the U.S. Facility L/C Participants and the Canadian Facility L/C Participants.
“ Lead Arrangers ”: Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, N.A., and SunTrust Robinson Humphrey, Inc., as Joint Lead Arrangers and Joint Bookrunners under this Agreement.
“ Lender Default ”: ( a ) the refusal (which may be given verbally or in writing and has not been retracted) or failure of any Lender (including any Agent in its capacity as Lender) to make available its portion of any incurrence of Loans or reimbursement obligations, which refusal or failure is not cured within one Business Day after the date of such refusal or failure, ( b ) the failure of any Lender (including any Agent in its capacity as Lender) to pay over to the Administrative Agent, any Issuing Lender or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, ( c ) a Lender (including any Agent in its capacity as Lender) has notified the Parent Borrower or the Administrative Agent, verbally or in writing, that it does not intend to comply with its funding obligations hereunder, ( d ) a Lender (including any Agent in its capacity as Lender) has failed, within 10 Business Days after request by the Administrative Agent, to confirm that it will comply with its funding obligations hereunder or ( e ) an Agent or a Lender has admitted in writing that it is insolvent or such Agent or Lender becomes subject to a Lender-Related Distress Event.
“ Lender Joinder Agreement ”: as defined in subsection 2.6(e)(i) .
“ Lender-Related Distress Event ”: with respect to any Lender or any Person that directly or indirectly controls such Lender (each, a “ Distressed Person ”), a voluntary or involuntary case or proceeding with respect to such Distressed Person under any debt relief law, or a custodian, conservator, receiver, interim receiver, trustee, monitor or similar official is appointed for such Distressed Person or any substantial part of such Distressed Person’s assets, or such Distressed Person makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or
 
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determined by any Governmental Authority having regulatory authority over such Distressed Person to be, insolvent or bankrupt; provided that a Lender-Related Distress Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any equity interests in any Lender or any person that directly or indirectly controls such Lender by a Governmental Authority or an instrumentality thereof.
“ Lenders ”: the several banks and other financial institutions from time to time party to this Agreement acting in their capacity as lenders, together with, in each case, any affiliate or branch of any such bank or financial institution through which such bank or financial institution elects, by written notice to the Administrative Agent and the Borrower Representative, to make any Loans or Swing Line Loans available to any Borrower or issue Letters of Credit; provided that for all purposes of voting or consenting with respect to ( a ) any amendment, supplementation or modification of any Loan Document, ( b ) any waiver of any of the requirements of any Loan Document or any Default or Event of Default and its consequences or ( c ) any other matter as to which a Lender may vote or consent pursuant to subsection 11.1 , the bank or financial institution making such election shall be deemed the “Lender” rather than such affiliate or branch, which shall not be entitled to so vote or consent.
“ Letter of Credit Inventory ”: Inventory the purchase of which is financed with Letters of Credit hereunder, ( a ) which Inventory does not constitute Eligible Inventory or Eligible In-Transit Inventory and for which no document of title has been issued and ( b ) which Inventory, when purchased, would otherwise constitute Eligible Inventory or Eligible In-Transit Inventory.
“ Letter of Credit Request ”: a letter of credit request substantially in the form of Exhibit F-2 or in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to open a Letter of Credit, and accompanied by an application and agreement for the issuance or amendment of a Letter of Credit in such form as the Issuing Lender may reasonably specify from time to time consistent with the terms hereof (it being understood that in the event of any express conflict, the terms hereof shall control).
“ Letters of Credit ” or “ L/Cs ”: the U.S. Facility Letters of Credit and the Canadian Facility Letters of Credit.
“ Liabilities ”: collectively, any and all claims, obligations, liabilities, causes of actions, actions, suits, proceedings, investigations, judgments, decrees, losses, damages, fees, costs and expenses (including interest, penalties and fees and disbursements of attorneys, accountants, investment bankers and other professional advisors), in each case whether incurred, arising or existing with respect to third parties or otherwise at any time or from time to time.
“ Lien ”: any mortgage, pledge, security interest, hypothec, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).
“ Limited Condition Acquisition ”: any acquisition of any assets, business or Person permitted by this Agreement whose consummation is not conditioned on the availability of, or on obtaining, third party financing.
 
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“ Loan ”: a Revolving Credit Loan, an Agent Advance or a Swing Line Loan, as the context shall require; collectively, the “ Loans .”
“ Loan Documents ”: collectively, this Agreement, any Notes, the Base Intercreditor Agreement (if entered into), the U.S. Guarantee and Collateral Agreement, the Canadian Guarantee and Collateral Agreement, any other Security Documents and any other document to which a Loan Party is a party which expressly states that it is to be treated as a “Loan Document” hereunder, each as amended, supplemented, waived or otherwise modified from time to time.
“ Loan Parties ”: Holding, the Parent Borrower, any other Borrower hereunder and each Subsidiary Guarantor that is a party to a Loan Document as a Guarantor or pledgor under any of the Security Documents; individually, a “Loan Party.” No Excluded Subsidiary shall be a Loan Party.
“ Management Advances ”: ( 1 ) loans or advances made to directors, officers, employees or consultants of any Parent, the Parent Borrower or any Restricted Subsidiary ( x ) in respect of travel, entertainment or moving-related expenses incurred in the ordinary course of business, ( y ) in respect of moving-related expenses incurred in connection with any closing or consolidation of any facility or ( z ) in the ordinary course of business and (in the case of this clause (z)) not exceeding $15,000,000 in the aggregate outstanding at any time, ( 2 ) promissory notes of Management Investors acquired in connection with the issuance of Management Stock to such Management Investors, ( 3 ) Management Guarantees or ( 4 ) other Guarantees of borrowings by Management Investors in connection with the purchase of Management Stock, which Guarantees are permitted under subsection 8.1 .
“ Management Agreements ”: collectively, any agreements primarily providing for indemnification and/or contribution for the benefit of any Permitted Holder in respect of Liabilities resulting from, arising out of or in connection with, based upon or relating to ( a ) any management, consulting, financial advisory, financing, underwriting or placement services or other investment banking activities, ( b ) any offering of securities or other financing activity or arrangement of or by any Parent or any of its Subsidiaries or ( c ) any action or failure to act of or by any Parent or any of its Subsidiaries (or any of their respective predecessors); in each case as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof and of this Agreement.
“ Management Guarantees ”: guarantees ( x ) of up to an aggregate principal amount outstanding at any time of $25,000,000 of borrowings by Management Investors in connection with their purchase of Management Stock or ( y ) made on behalf of, or in respect of loans or advances made to, directors, officers, employees or consultants of any Parent, the Parent Borrower or any Restricted Subsidiary ( 1 ) in respect of travel, entertainment and moving-related expenses incurred in the ordinary course of business, or ( 2 ) in the ordinary course of business and (in the case of this clause (2)) not exceeding $10,000,000 in the aggregate outstanding at any time.
“ Management Indebtedness ”: Indebtedness Incurred to any Management Investor to finance the repurchase or other acquisition of Capital Stock of the Parent Borrower or any Parent (including any options, warrants or other rights in respect thereof) from any Management Investor, which repurchase or other acquisition of Capital Stock is permitted by subsection 8.5 .
 
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“ Management Investors ”: the officers, directors, employees and other members of the management of any Parent, the Parent Borrower or any of their respective Subsidiaries, or family members or relatives thereof ( provided that, solely for purposes of the definition of “Permitted Holders,” such family members or relatives shall include only those Persons who are or become Management Investors in connection with estate planning for or inheritance from other Management Investors, as determined in good faith by the Parent Borrower, which determination shall be conclusive), or trusts, partnerships or limited liability companies for the benefit of any of the foregoing, or any of their heirs, executors, successors and legal representatives, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of the Parent Borrower or any Parent.
“ Management Stock ”: Capital Stock of the Parent Borrower or any Parent (including any options, warrants or other rights in respect thereof) held by any of the Management Investors.
“ Mandatory Revolving Loan Borrowing ”: as defined in subsection 2.4(c) .
“ Market Capitalization ”: for any fiscal year, an amount equal to ( i ) the total number of issued and outstanding shares of Capital Stock of Holding or any Parent on the last day of such fiscal year multiplied by ( ii ) the arithmetic mean of the closing prices per share of such Capital Stock for the last 30 trading days of such fiscal year.
“ Material Adverse Effect ”: any event, circumstance or condition that has had or would reasonably be expected to have a material and adverse effect on ( a ) the business or financial condition of the Parent Borrower and the Restricted Subsidiaries, taken as a whole, ( b ) the ability of the Borrowers and the Guarantors, taken as a whole, to perform their payment obligations under the Loan Documents or ( c ) the rights and remedies of the Administrative Agent and the Lenders under the Loan Documents, taken as a whole.
“ Material Restricted Subsidiary ”: any Restricted Subsidiary other than one or more Restricted Subsidiaries designated by the Parent Borrower that in the aggregate do not constitute Material Subsidiaries.
“ Material Subsidiary ”: any Subsidiary of the Parent Borrower that is not an Immaterial Subsidiary.
“ Materials of Environmental Concern ”: any chemicals, substances, materials, wastes, pollutants, contaminants or compounds in any form or regulated under, or which may give rise to liability under, any applicable Environmental Law, including gasoline, petroleum (including crude oil or any fraction thereof), petroleum products or by-products, asbestos, toxic mold, polychlorinated biphenyls and urea-formaldehyde insulation.
“ Maturity Date ”: July [ — ], 2019.
“ Maximum Borrowing Amount ”: at any time of determination, the lesser of ( 1 ) the Borrowing Base and ( 2 ) the aggregate Commitments hereunder, at such time.
 
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“ Merger ”: the collective reference to the Parent Merger and the Subsidiary Merger.
“ Merger Agreement ”: as defined in the recitals hereto.
“ Minimum Extension Condition ”: as defined in subsection 2.7(g) .
“ Moody’s ”: Moody’s Investors Service, Inc. and its successors.
“ Mortgaged Properties ”: the collective reference to the Real Properties owned in fee by the Loan Parties described on Schedule 5.8 , including all buildings, improvements, structures and fixtures now or subsequently located thereon and owned by any such Loan Party and each owned Real Property, if any, which shall become subject to a mortgage pursuant to subsection 7.9(a) .
“ Mortgages ”: collectively, the mortgages, charges and deeds of trust, if any, for the Mortgaged Properties, executed and delivered by any Loan Party to the Administrative Agent and the ABL Collateral Agent, as applicable, substantially in the form of Exhibit G , as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Multiemployer Plan ”: a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“ Net Cash Proceeds ”: with respect to any issuance or sale of any securities or Indebtedness of the Parent Borrower or any Subsidiary by the Parent Borrower or any Subsidiary, or any capital contribution, the cash proceeds of such issuance, sale or contribution net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance, sale or contribution and net of taxes paid or payable as a result thereof.
“ Net Orderly Liquidation Value ”: the orderly liquidation value (net of costs and expenses estimated to be incurred in connection with such liquidation) of the Loan Parties’ Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory expressed as a percentage of the net book value thereof, such percentage to be as determined from time to time by reference to the most recent Inventory appraisal completed by a qualified third-party appraisal company (approved by the Administrative Agent in its Permitted Discretion) delivered to the Administrative Agent.
“ New Revolving Commitments ”: as defined in subsection 2.6(a) .
“ New York Process Agent ”: as defined in subsection 11.13(f) .
“ Non-ABL Priority Collateral ”: as defined in the Base Intercreditor Agreement.
“ Non-Consenting Lender ”: as defined in subsection 11.1(f) .
“ Non-Defaulting Lender ”: any Lender other than a Defaulting Lender.
“ Non-Excluded Taxes ”: all Taxes other than Excluded Taxes.
 
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“ Non-Extended Commitments ”: as defined in subsection 2.7(a) .
“ Non-Extended Loans ”: as defined in subsection 2.7(a) .
“ Non-Extending Lender ”: as defined in subsection 2.7(e) .
“ Non-Loan Party ”: each Subsidiary of the Parent Borrower that is not a Loan Party.
“ Notes ”: the collective reference to the Revolving Notes and the Swing Line Note.
“ Not Otherwise Applied ”: the Available Equity Amount that was not previously applied pursuant to subsections 8.5(a) and  8.5(b)(iv) , clause (c)(y) of the definition of “Permitted Acquisition” and clause (t) of the definition of “Permitted Investments”.
“ Obligation Currency ”: as defined in subsection 11.8(a) .
“ Obligations ”: with respect to any Indebtedness, any principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Parent Borrower or any Restricted Subsidiary whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, Guarantees of such Indebtedness (or of Obligations in respect thereof), other monetary obligations of any nature and all other amounts payable thereunder or in respect thereof; provided that, when used with respect to the Facility hereunder, “Obligations” shall include Secured Bank Product Obligations.
“ Obligor ”: any purchaser of goods or services or other Person obligated to make payment to the Parent Borrower or any of its Subsidiaries (other than to any Special Purpose Subsidiaries and the Foreign Subsidiaries (other than Canadian Subsidiaries)) in respect of a purchase of such goods or services.
“ OFAC ”: as defined in subsection 5.19 .
“ OpCo Borrower ”: as defined in the preamble hereto and shall include any successor in interest thereto.
“ Other Intercreditor Agreement ”: an intercreditor agreement in form and substance reasonably satisfactory to the Borrower Representative and the ABL Collateral Agent (and approved by the Required Lenders).
“ Other Representatives ”: each of the Lead Arrangers and each other institution set forth on the cover page hereto as a Joint Bookrunner in its capacity as such hereunder.
“ Parent ”: any of Holding or any Other Parent and any other Person that is a Subsidiary of Holding or any Other Parent and of which the Parent Borrower is a Subsidiary. As used herein, “ Other Parent ” means a Person of which the Parent Borrower becomes a Subsidiary after the Closing Date, provided, that either ( x ) immediately after the Parent Borrower first becomes a Subsidiary of such Person, more than 50.0% of the Voting Stock of such Person shall be held by one or more Persons that held more than 50.0% of the Voting Stock of a Parent of the Parent
 
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Borrower immediately prior to the Parent Borrower first becoming such Subsidiary or ( y ) such Person shall be deemed not to be an Other Parent for the purpose of determining whether a Change of Control shall have occurred by reason of the Parent Borrower first becoming a Subsidiary of such Person.
“ Parent Borrower ”: initially, xpedx Intermediate, LLC, and, on and after the consummation of the Subsidiary Merger, Unisource Worldwide, Inc. and in each case shall include any successor in interest thereto.
“ Parent Expenses ”: ( i ) costs (including all professional fees and expenses) incurred by any Parent in connection with maintaining its existence or in connection with its reporting obligations under, or in connection with compliance with, applicable laws or applicable rules of any governmental, regulatory or self-regulatory body or stock exchange, this Agreement or any other agreement or instrument relating to Indebtedness of the Parent Borrower or any Restricted Subsidiary, including in respect of any reports filed with respect to the Securities Act, the Exchange Act or the respective rules and regulations promulgated thereunder, ( ii ) expenses incurred by any Parent in connection with the acquisition, development, maintenance, ownership, prosecution, protection and defense of its intellectual property and associated rights (including but not limited to trademarks, service marks, trade names, trade dress, patents, copyrights and similar rights, including registrations and registration or renewal applications in respect thereof; inventions, processes, designs, formulae, trade secrets, know-how, confidential information, computer software, data and documentation, and any other intellectual property rights; and licenses of any of the foregoing) to the extent such intellectual property and associated rights relate to the business or businesses of the Parent Borrower or any Subsidiary thereof, ( iii ) indemnification obligations of any Parent owing to directors, officers, employees or other Persons under its charter or by-laws or pursuant to written agreements with or for the benefit of any such Person (including the Management Agreements), or obligations in respect of director and officer insurance (including premiums therefor), ( iv ) other administrative and operational expenses of any Parent incurred in the ordinary course of business, and ( v ) fees and expenses incurred by any Parent in connection with any offering of Capital Stock or Indebtedness, ( w ) which offering is not completed, or ( x ) where the net proceeds of such offering are intended to be received by or contributed or loaned to the Parent Borrower or a Restricted Subsidiary, or ( y ) in a prorated amount of such expenses in proportion to the amount of such net proceeds intended to be so received, contributed or loaned, or ( z ) otherwise on an interim basis prior to completion of such offering so long as any Parent shall cause the amount of such expenses to be repaid to the Parent Borrower or the relevant Restricted Subsidiary out of the proceeds of such offering promptly if completed.
“ Parent Merger ”: the merger of UWWH with and into Spinco, with Spinco being the surviving corporation.
“ Participant ”: as defined in subsection 11.6(c) .
“ Participant Register ”: as defined in subsection 11.6(c)(iv) .
“ Patriot Act ”: as defined in subsection 11.18 .
 
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“ Payment Condition ”: at any time of determination, with respect to a Specified Payment, means that ( a ) no Specified Default has occurred and is continuing or would exist as a result of making the subject Specified Payment and ( b ) either ( x ) after giving pro forma effect to the subject Specified Payment (as if such Specified Payment, if applicable to such calculation, had been made as of the first day of the period taken into account to determine whether or not a 10% Liquidity Event has occurred and is continuing), no 10% Liquidity Event has occurred and is continuing and the Parent Borrower is in compliance with the covenant set forth in subsection 8.9 for the then applicable Test Period after giving pro forma effect to such Specified Payment (as if such Specified Payment, if applicable to such calculation, had been made as of the first day of such period), whether or not such covenant is otherwise then applicable to the Parent Borrower under such subsection at such time or ( y ) after giving pro forma effect to the subject Specified Payment (as if such Specified Payment, if applicable to such calculation, had been made as of the first day of the period taken into account to determine whether or not a 15% Liquidity Event has occurred and is continuing), no 15% Liquidity Event has occurred and is continuing. For purposes hereof:
(i) a 10% Liquidity Event shall have occurred if Specified Availability is less than the 10% Trigger for two consecutive Business Days and shall continue until Specified Availability exceeds or is equal to the 10% Trigger for 30 consecutive days; and
(ii) a 15% Liquidity Event shall have occurred if Specified Availability is less than the 15% Trigger for two consecutive Business Days and shall continue until Specified Availability exceeds or is equal to the 15% Trigger for 30 consecutive days.
“ Payment Office ”: initially, the office of the Administrative Agent as set forth in subsection 11.2 , or any other office as the Administrative Agent shall designate from time to time.
“ PBGC ”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor thereto).
“ Pension Event ”: solely with respect to Canadian Pension Plans, ( a ) the whole or partial withdrawal of a Loan Party or any of its Subsidiaries from a Canadian Pension Plan during a plan year; or ( b ) the filing of a notice of proposal to terminate in whole or in part a Canadian Pension Plan or the treatment of a Canadian Pension Plan amendment as a termination or partial termination; or ( c ) the issuance of a notice of proposal by any Governmental Authority to terminate in whole or in part or have an administrator or like body appointed to administer a Canadian Pension Plan; or ( d ) any other event or condition which would reasonably be expected to result in the termination of, winding up or partial termination or winding up of or the appointment of a trustee to administer, any Canadian Pension Plan.
“ Permitted Acquisition ”: any acquisition in a transaction that satisfies each of the following requirements:
(a) the business of the acquired company shall be substantially similar to, or ancillary, complementary or related to the Business, or the assets so acquired shall be used or useful in or otherwise relate to, the Business; provided that up to 20% of the gross sales revenue of an acquired company may be from lines of business that are not similar, ancillary, complementary or related to the Business;
 
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(b) the acquired company and its Subsidiaries will become Guarantors or Borrowers and pledge their Collateral to the Administrative Agent to the extent required by subsections 7.9(b) and 7.9(c) ; and
(c) in the case of an acquisition by a Loan Party of an acquired company that will not become a Loan Party, the Acquisition Consideration consists solely of any combination of ( x ) Capital Stock of any Parent or Holding, and/or (y) amounts not to exceed the Available Equity Amount Not Otherwise Applied, and/or (z) additional cash and other property (excluding cash and other property covered in subclauses (x) and (y) of this clause (c)) and Indebtedness (whether incurred or assumed); provided , unless the Payment Condition is satisfied at the time of such Permitted Acquisition (or, at the option of the Borrower Representative if such Permitted Acquisition is a Limited Condition Acquisition, as of the date definitive agreements for such Limited Condition Acquisition are entered into), that the aggregate amount of such cash consideration paid pursuant to this clause (c)(z) and all other cash consideration paid for Permitted Acquisitions consummated during any fiscal year in reliance on this clause (c)(z) is less than or equal to $50,000,000 during any fiscal year, provided , further , that amounts unused in any fiscal year may be carried forward and used to make Permitted Acquisitions in succeeding fiscal years.
“ Permitted Cure Securities ”: common equity securities of any Parent or other equity securities of any Parent on terms and conditions reasonably satisfactory to the Administrative Agent that do not constitute Disqualified Stock.
“ Permitted Discretion ”: the commercially reasonable judgment of the Administrative Agent, exercised in good faith in accordance with customary business practices for comparable asset-based lending transactions, as to any factor which such Agent reasonably determines: ( a ) will or reasonably could be expected to adversely affect in any material respect the value of any Eligible Inventory, Eligible In-Transit Inventory, Eligible Letter of Credit Inventory, Eligible Credit Card Receivables or Eligible Accounts, the enforceability or priority of the applicable Agent’s Liens thereon or the amount which any Agent, the Lenders or any Issuing Lender would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation of such Eligible Inventory, Eligible In-Transit Inventory, Eligible Letter of Credit Inventory, Eligible Credit Card Receivables or Eligible Accounts; or ( b ) is evidence that any collateral report or financial information delivered to such Agent by any Person on behalf of the applicable Borrower is incomplete, inaccurate or misleading in any material respect. In exercising such judgment, such Agent may consider, without duplication, such factors already included in or tested by the definition of Eligible Inventory, Eligible In-Transit Inventory, Eligible Letter of Credit Inventory, Eligible Credit Card Receivables or Eligible Accounts as well as any of the following: ( i ) changes after the Closing Date in any material respect in demand for, pricing of, or product mix of Inventory; ( ii ) changes after the Closing Date in any
 
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material respect in any concentration of risk with respect to Accounts; and ( iii ) any other factors arising after the Closing Date that change in any material respect the credit risk of lending to the Borrowers on the security of the Eligible Inventory, Eligible In-Transit Inventory, Eligible Letter of Credit Inventory, Eligible Credit Card Receivables or Eligible Accounts.
“ Permitted Holder ”: any of the following: ( i ) any of the Investors or Management Investors, and any of their respective Affiliates; ( ii ) any investment fund or vehicle managed or sponsored by Bain Capital or any Affiliate thereof, and any Affiliate of or successor to any such investment fund or vehicle; ( iii ) any limited or general partners of, or other investors in, any Bain Capital Investor or any Affiliate thereof, or any such investment fund or vehicle (as to any such limited partner or other investor, solely to the extent of any Capital Stock of the Parent Borrower or any Parent actually received by way of dividend or distribution from any such Investor, Affiliate, or investment fund or vehicle); ( iv ) any “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) of which any of the Persons specified in clause (i), (ii) or (iii) above is a member ( provided that (without giving effect to the existence of such “group” or any other “group”) one or more of such Persons collectively have beneficial ownership, directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Parent Borrower or any Parent held by such “group”), and any other Person that is a member of such “group”, and ( v ) any Person acting in the capacity of an underwriter in connection with a public or private offering of Capital Stock of any Parent or the Parent Borrower.
“ Permitted Investments ”: (a) Investments in accounts, payment intangibles and chattel paper (each as defined in the UCC or, if applicable, the PPSA), notes receivable, extensions of trade credit and similar items arising or acquired in the ordinary course of business of the Parent Borrower and its Restricted Subsidiaries;
(b) Investments in cash, Cash Equivalents, Temporary Cash Investments and Investment Grade Securities;
(c) Investments in existence on the Closing Date and set forth on Schedule 1.1P ;
(d) ( i ) Investments by any Loan Party in any other Loan Party (other than Holding) or in any Captive Insurance Subsidiary; provided , however , that if any such Investment is in the form of intercompany Indebtedness, such Indebtedness shall not be secured by any Lien and ( ii ) Investments in Holding in amounts and for purposes for which dividends are permitted under subsection 8.5 ;
(e) Investments received in settlement amounts due to the Parent Borrower or any Restricted Subsidiary of the Parent Borrower effected in the ordinary course of business;
(f) Investments by any Non-Loan Party in any other Non-Loan Party;
(g) Investments by Loan Parties in any Non-Loan Parties; provided , however , that the aggregate outstanding amount at any time of all intercompany Investments made pursuant to this clause (g) shall not exceed, at the time of incurrence thereof and after giving pro forma effect thereto, the greater of $50,000,000 and [ — ]% of Consolidated EBITDA for the previous fiscal year;
 
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(h) Investments by any Non-Loan Party in any Loan Party (other than Holding); provided , however , that if any such Investment is in the form of intercompany Indebtedness, such Indebtedness shall not be secured by any Lien;
(i) ( 1 ) Investments by any Loan Party in any Restricted Subsidiary to the extent that, substantially concurrent with such Investment, a corresponding cash Investment or Restricted Payment in the same amount is made from such Restricted Subsidiary, directly or indirectly, to a Loan Party within 10 Business Days of the initiation of such transaction, ( 2 ) Investments by Loan Parties in Restricted Subsidiaries so long as such Investments are part of a series of transactions that result in the proceeds of such intercompany Investments ultimately being invested in (or distributed to) a Loan Party within 10 Business Days of the initiation of such transaction, ( 3 ) intercompany Investments, reorganizations and related activities related to tax planning and reorganization ( i ) contemplated as of the Closing Date and set forth on Schedule 1.1P or ( ii ) so long as after giving effect thereto, the security interest of the Lenders in the Collateral, taken as a whole, is not impaired in any material respect (it being understood that the contribution of the equity interests of one or more “first-tier” foreign subsidiaries to a newly created “first-tier” foreign subsidiary shall be permitted) and ( 4 ) Investments by the Parent Borrower or any of its Subsidiaries in the Parent Borrower or any of its Subsidiaries constituting intercompany loans, advances, or Indebtedness having a term not exceeding 364 days, inclusive of any rollover or extensions of terms (and made in the ordinary course of business) in an amount not to exceed the greater of $20,000,000 and [ — ]% of Consolidated Total Assets at any time; provided , that the transactions described in clauses (1) and (2) above shall only be permitted to the extent that ( x ) after giving effect thereto, the validity, perfection and priority of the security interest of the Lenders in the Collateral is not impaired by or in connection with such transaction and ( y ) five Business Days prior to giving effect to such transaction (or such shorter period as the Administrative Agent shall agree), the Administrative Agent shall have received a reasonably detailed description of such transaction and drafts of the documentation relating thereto as the Administrative Agent may reasonably request;
(j) any Investment constituting, or acquired in connection with, a Permitted Acquisition, including any Investment in the form of a capital contribution or intercompany Indebtedness among Holding, the Parent Borrower and their respective Subsidiaries for the purpose of consummating a Permitted Acquisition, so long as ( a ) the Payment Condition is satisfied at the time of such Permitted Acquisition (or, at the option of the Borrower Representative if such Permitted Acquisition is a Limited Condition Acquisition, as of the date definitive agreements for such Limited Condition Acquisition are entered into) or ( b ) the aggregate amount of such Investments outstanding pursuant to this clause (j)(b), taken together with the aggregate outstanding amount of Investments in joint ventures made pursuant to clause (q) below, Investments made pursuant to clause (u) below and Guarantee Obligations incurred pursuant to subsection 8.1(c)(xi) do not exceed the greater of $75,000,000 and [ — ]% of Consolidated Total Assets;
 
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(k) Investments made in connection with the Transactions;
(l) loans and advances (and guarantees of loans and advances by third parties) made to officers, directors or employees of any Parent or Holding, the Parent Borrower or any of its Restricted Subsidiaries, and Guarantee Obligations of the Parent Borrower or any of its Restricted Subsidiaries in respect of obligations of officers, directors or employees of any Parent, Holding, the Parent Borrower or any of its Restricted Subsidiaries, in each case ( i ) in the ordinary course of business, ( ii ) existing on the Closing Date and described on Schedule 1.1P , ( iii ) made for other purposes in an aggregate principal amount not to exceed $15,000,000 at any time, ( iv ) relating to indemnification or reimbursement of any officers, directors or employees in respect of liabilities relating to their serving in any such capacity or ( v ) made to sales representatives in connection with changes to sales commission procedures; provided , however , that with respect to any employee of any Parent, no such loans or advances shall be permitted unless the activities of such employee relate primarily to the Parent Borrower and its Restricted Subsidiaries;
(m) loans and advances (and guarantees of loans and advances by third parties) made to Management Investors in connection with the purchase by such Management Investors of Capital Stock of Holding or any Parent (so long as, in the case of any purchase of Capital Stock of Holding or any Parent, Holding or such Parent, as applicable, applies an amount equal to the net cash proceeds of such purchases to, directly or indirectly, make capital contributions to, or purchase Capital Stock of, the Parent Borrower or applies such proceeds to pay Holding or Parent Expenses) of up to $15,000,000 outstanding at any one time and promissory notes of Management Investors acquired in connection with the issuance of Management Stock to such Management Investors;
(n) ( i ) Investments of the Parent Borrower and its Restricted Subsidiaries under Interest Rate Agreements, Currency Agreements or Commodities Agreements permitted hereunder and ( ii ) any Investment by any Captive Insurance Subsidiary in connection with its provision of insurance to the Parent Borrower or any of its Subsidiaries which Investment is made in the ordinary course of business of such Captive Insurance Subsidiary, or by reason of applicable law, rule, regulation or order, or that is required or approved by any regulatory authority having jurisdiction over such Captive Insurance Subsidiary or its business, as applicable;
(o) ( i ) Investments in the nature of pledges or deposits ( x ) with respect to leases or utilities provided to third parties in the ordinary course of business or ( y ) otherwise described in the definition of “Permitted Prior Liens” or ( ii ) Investments in the nature of or resulting from Liens permitted under subsection 8.2 ;
(p) Investments representing non-cash consideration received by the Parent Borrower or any of its Restricted Subsidiaries in connection with any asset disposition, provided that any such non-cash consideration received by the Parent Borrower or any other Loan Party is pledged to the ABL Collateral Agent for the benefit of the Secured Parties pursuant to the Security Documents as and to the extent provided for therein;
 
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(q) Investments by the Parent Borrower or any of its Restricted Subsidiaries in a Person in connection with a joint venture or similar arrangement; provided that ( i ) the aggregate amount of such Investments outstanding pursuant to this clause (q) do not exceed $75,000,000, when taken together with the aggregate outstanding amount of Permitted Acquisitions made pursuant to clause (j)(b) above, Investments made pursuant to clause (u) below and Guarantee Obligations incurred pursuant to subsection 8.1(c)(xi) at any time and ( ii ) the Parent Borrower or such Restricted Subsidiary complies with the provisions of subsections 7.9(b) and 7.9(c) hereof, if applicable, with respect to such ownership interest;
(r) Investments in industrial development or revenue bonds or similar obligations secured by assets leased to and operated by the Parent Borrower or any of its Restricted Subsidiaries that were issued in connection with the financing of such assets, so long as the Parent Borrower or any such Restricted Subsidiary may obtain title to such assets at any time by optionally canceling such bonds or obligations, paying a nominal fee and terminating such financing transaction;
(s) Investments representing evidences of Indebtedness, securities or other property received from another Person by the Parent Borrower or any of its Restricted Subsidiaries in connection with any bankruptcy proceeding or other reorganization of such other Person or as a result of foreclosure, perfection or enforcement of any Lien or exchange for evidences of Indebtedness, securities or other property of such other Person held by the Parent Borrower or any of its Restricted Subsidiaries; provided that any such securities or other property received by the Parent Borrower or any other Loan Party is pledged to the ABL Collateral Agent for the benefit of the Secured Parties pursuant to the Security Documents as and to the extent required thereby;
(t) any Investment to the extent not exceeding the Available Equity Amount Not Otherwise Applied;
(u) Investments by the Parent Borrower and its Restricted Subsidiaries in an aggregate amount outstanding at any time, when taken together with the aggregate outstanding amount of Permitted Acquisitions made pursuant to clause (j)(b) above, Investments in joint ventures made pursuant to clause (q) above and Guarantee Obligations incurred pursuant to subsection 8.1(c)(xi) , not to exceed the greater of $75,000,000 and [ — ]% of Consolidated Total Assets; and
(v) any Investment to the extent made using Capital Stock of Holding (other than Disqualified Stock) as consideration.
For purposes of determining compliance with subsection 8.5 , ( i ) in the event that any Investment meets the criteria of more than one of the types of Investments described in clauses (a) through (v) above, the Parent Borrower, in its sole discretion, shall classify such item of Investment and may include the amount and type of such Investment in one or more of such clauses (including in part under one such clause and in part under another such clause) and ( ii ) the amount of any Investment made or outstanding at any time under clauses (g), (j), (l), (m), (q) and (u) shall be the original cost of such Investment, reduced (at the Parent Borrower’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment.
 
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“ Permitted Liens ”: as defined in subsection 8.2 .
“ Permitted Payment ”: as defined in subsection 8.5(b) .
“ Permitted Prior Liens ”:
(a) Liens for taxes, assessments or other governmental charges not yet delinquent or the nonpayment of which in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Parent Borrower and its Restricted Subsidiaries or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Parent Borrower or a Subsidiary thereof, as the case may be, in accordance with GAAP;
(b) carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business in respect of obligations that are not overdue for a period of more than 60 days or that are bonded or that are being contested in good faith and by appropriate proceedings;
(c) pledges, deposits or Liens in connection with workers’ compensation, unemployment insurance and other social security and other similar legislation or other insurance-related obligations (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements);
(d) pledges, deposits or Liens to secure the performance of bids, tenders, trade, government or other contracts (other than for borrowed money), obligations for utilities, leases, licenses, statutory obligations, completion guarantees, surety, judgment, appeal or performance bonds, other similar bonds, instruments or obligations, and other obligations of a like nature incurred in the ordinary course of business;
(e) easements (including reciprocal easement agreements), rights-of-way, building, zoning and similar restrictions, utility agreements, covenants, reservations, restrictions, encroachments, charges, and other similar encumbrances or title defects incurred, or leases or subleases granted to others, which do not in the aggregate materially interfere with the ordinary conduct of the business of the Parent Borrower and its Restricted Subsidiaries, taken as a whole;
(f) ( i ) mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any developer, landlord or other third party on real property over which the Parent Borrower or any Restricted Subsidiary has easement rights or on any leased property and subordination or similar agreements relating thereto and ( ii ) any condemnation or eminent domain proceedings affecting any real property;
(g) Liens arising out of judgments, decrees, orders or awards (other than judgments, decrees or awards constituting Events of Default under subsection 9(h) ) in
 
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respect of which the Parent Borrower or any Restricted Subsidiary shall in good faith be prosecuting an appeal or proceedings for review, which appeal or proceedings shall not have been finally terminated or if the period within which such appeal or proceedings may be initiated shall not have expired; and
(h) Liens ( i ) arising by operation of law (or by agreement to the same effect) in the ordinary course of business, ( ii ) on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third party relating to such property or assets, ( iii ) on cash set aside at the time of the Incurrence of any Indebtedness or government securities purchased with such cash, in either case to the extent that such cash or government securities pre-fund the payment of interest on such Indebtedness and are held in an escrow account or similar arrangement to be applied for such purpose, ( iv ) securing or arising by reason of any netting or set-off arrangement entered into in the ordinary course of banking or other trading activities (including in connection with purchase orders and other agreements with customers), ( v ) Liens in favor of any Borrower or any Subsidiary Guarantor, ( vi ) arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business, ( vii ) relating to pooled deposit or sweep accounts to permit satisfaction of overdraft, cash pooling or similar obligations incurred in the ordinary course of business, ( viii ) attaching to commodity trading or other brokerage accounts incurred in the ordinary course of business or ( ix ) arising in connection with repurchase agreements permitted under subsection 8.1 .
“ Person ”: any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
“ Plan ”: at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Parent Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of ERISA.
“ PPSA ”: the Personal Property Security Act (Ontario) (or any successor statute) or similar legislation of any other Canadian jurisdiction, including the Civil Code of Québec , the laws of which are required by such legislation to be applied in connection with the issue, perfection, enforcement, opposability, validity or effect of security interests.
“ Preferred Stock ”: as applied to the Capital Stock of any corporation, Capital Stock of any class or classes (however designated) that by its terms is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation.
“ Prime Rate ”: as defined in the definition of “ABR.”
“ Purchase ”: as defined in the definition of “Consolidated Coverage Ratio.”
 
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“ Purchase Money Obligations ”: any Indebtedness Incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets, and whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock of any Person owning such property or assets, or otherwise.
“ Qualified Secured Bank Product Obligations ”: those Secured Bank Product Obligations that are Hedging Obligations.
“ Quebec Security Documents ”: collectively, each movable hypothec executed and delivered to the ABL Collateral Agent, substantially in the form of Exhibit D-2 , as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Rating Agency ”: Moody’s or S&P, or, if Moody’s or S&P or both shall not make a rating of the Facilities publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Parent Borrower which shall be substituted for Moody’s or S&P or both, as the case may be.
“ Real Property ”: land, buildings, structures and other improvements located thereon, fixtures attached thereto, and rights, privileges, easements and appurtenances related thereto, and related property interests.
“ Receivable ”: a right to receive payment pursuant to an arrangement with another Person pursuant to which such other Person is obligated to pay, as determined in accordance with GAAP.
“ refinance ”: refinance, refund, replace, renew, repay, modify, restate, defer, substitute, supplement, reissue, resell or extend (including pursuant to any defeasance or discharge mechanism); and the terms “ refinances ,” “ refinanced ” and “ refinancing ” as used for any purpose in this Agreement shall have correlative meanings.
“ Refinancing Indebtedness ”: Indebtedness that is Incurred to refinance any Indebtedness existing on the Closing Date or Incurred in compliance with this Agreement (including Indebtedness of the Parent Borrower that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of the Parent Borrower or another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness; provided that
(1) if the Indebtedness being refinanced is Subordinated Obligations, the Refinancing Indebtedness shall have a final Stated Maturity at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the final Stated Maturity of the Indebtedness being refinanced (or if shorter, the Loans);
(2) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of ( x ) the aggregate principal amount then outstanding of the Indebtedness being refinanced, plus ( y ) fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such Refinancing Indebtedness; and
(3) Refinancing Indebtedness shall not include ( x ) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Borrower or Subsidiary Guarantor that refinances Indebtedness of a Borrower or a Subsidiary Guarantor that could not have been initially Incurred by such Restricted Subsidiary pursuant to subsection 8.1 or ( y ) Indebtedness of the Parent Borrower or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary.
 
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“ Refunded Swing Line Loans ”: as defined in subsection 2.4(c) .
“ Refunding Capital Stock ”: as defined in subsection 8.5(b)(i) .
“ Register ”: as defined in subsection 11.6(b)(v) .
“ Regulation S-X ”: Regulation S-X promulgated by the SEC, as in effect on the Closing Date.
“ Regulation T ”: Regulation T of the Board as in effect from time to time.
“ Regulation U ”: Regulation U of the Board as in effect from time to time.
“ Regulation X ”: Regulation X of the Board as in effect from time to time.
“ Reimbursement Obligations ”: the obligation of the applicable Borrower to reimburse the applicable Issuing Lender pursuant to subsection 3.5(a) for amounts drawn under the applicable Letters of Credit.
“ Related Parties ”: with respect to any Person, such Person’s affiliates and the partners, officers, directors, trustees, employees, shareholders, members, attorneys and other advisors, agents and controlling persons of such person and of such person’s affiliates and “Related Party” shall mean any of them.
“ Related Taxes ”: ( x ) any taxes, charges or assessments, including but not limited to sales, use, transfer, rental, ad valorem, value-added, stamp, property, consumption, franchise, license, capital, net worth, gross receipts, excise, occupancy, intangibles or similar taxes, charges or assessments (other than federal, state, foreign, provincial or local taxes measured by income, and federal, state, foreign, provincial or local withholding imposed by any government or other taxing authority on payments made by any Parent other than to another Parent), required to be paid by any Parent by virtue of its being incorporated or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than the Parent Borrower, any of its Subsidiaries or any Parent), or being a holding company of the Parent Borrower, any of its Subsidiaries or any Parent or receiving dividends from or other distributions in respect of the Capital Stock of the Parent Borrower, any of its Subsidiaries or any Parent, or having guaranteed any obligations of the Parent Borrower or any Subsidiary thereof, or having made any payment in respect of any of the items for which the Parent Borrower or any
 
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of its Subsidiaries is permitted to make payments to any Parent pursuant to the covenant described under subsection 8.5 , or acquiring, developing, maintaining, owning, prosecuting, protecting or defending its intellectual property and associated rights (including but not limited to receiving or paying royalties for the use thereof) relating to the business or businesses of the Parent Borrower or any Subsidiary thereof, ( y ) any taxes of a Parent attributable to any taxable period (or portion thereof) ending on or prior to the Closing Date, incurred in connection with the Transactions or attributable to any Parent’s receipt of (or entitlement to) any payment in connection with the Transactions, including any payment received after the Closing Date pursuant to any agreement related to the Transactions or ( z ) any other federal, state, foreign, provincial or local taxes measured by income for which any Parent is liable up to an amount not to exceed, with respect to federal taxes, the amount of any such taxes that the Parent Borrower and its Subsidiaries would have been required to pay on a separate company basis, or on a consolidated basis as if the Parent Borrower had filed a consolidated return on behalf of an affiliated group (as defined in Section 1504 of the Code or an analogous provision of state, foreign, provincial or local law) of which it were the common parent, or with respect to state, foreign, provincial or local taxes, the amount of any such taxes that the Parent Borrower and its Subsidiaries would have been required to pay on a separate company basis, or on a combined basis as if the Parent Borrower had filed a combined return on behalf of an affiliated group consisting only of the Parent Borrower and its Subsidiaries (in each case, reduced by any such taxes paid directly by the Parent Borrower or its Subsidiaries). Related Taxes include all interest, penalties and additions relating thereto.
“ Release ”: any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Materials of Environmental Concern in, into, onto or through the environment.
“ Reorganization ”: with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.
“ Reportable Event ”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under PBGC Reg. § 4043 or any successor regulation thereto.
“ Reports ”: as defined in subsection 10.16 .
“ Repurchase Debt ”: unsecured Indebtedness issued by the Parent Borrower or any of its Restricted Subsidiaries to finance all or any part of a repurchase, redemption, acquisition, cancellation or other retirement for value of its Capital Stock permitted under subsection 8.5(b)(v) .
“ Required Lenders ”: Non-Defaulting Lenders the Total Credit Percentages of which aggregate greater than 50.0%.
“ Requirement of Law ”: as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, statute, ordinance, code, decree, treaty, rule or regulation or determination of an arbitrator or a court or other
 
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Governmental Authority, in each case applicable to or binding upon such Person or any of its material property or to which such Person or any of its material property is subject, including laws, ordinances and regulations pertaining to zoning, occupancy and subdivision of real properties; provided that the foregoing shall not apply to any non-binding recommendation of any Governmental Authority.
“ Responsible Officer ”: as to any Person, any of the following officers of such Person: ( a ) the chief executive officer or the president of such Person and, with respect to financial matters, the chief financial officer, the treasurer or the controller of such Person, ( b ) any vice president of such Person or, with respect to financial matters, any assistant treasurer or assistant controller of such Person, who has been designated in writing to the Administrative Agent as a Responsible Officer by such chief executive officer or president of such Person or, with respect to financial matters, such chief financial officer of such Person, ( c ) with respect to subsection 7.7 and without limiting the foregoing, the general counsel of such Person, ( d ) with respect to ERISA matters, the senior vice president—human resources (or substantial equivalent) of such Person and (e) any other individual designated as a “Responsible Officer” for the purposes of this Agreement by the Board of Directors or equivalent body of such Person.
“ Restricted Payment ”: as defined in subsection 8.5(a) .
“ Restricted Payment Transaction ”: any Restricted Payment permitted pursuant to subsection 8.5 , any Permitted Payment, any Permitted Investment or any transaction specifically excluded from the definition of the term “Restricted Payment” (including pursuant to the exception contained in clause (i) and the parenthetical exclusions contained in clauses (ii) and (iii) of such definition).
“ Restricted Subsidiary ”: any Subsidiary of the Parent Borrower other than an Unrestricted Subsidiary.
“ Retained Amount ”: an amount not to exceed $25,000 on deposit in any DDA and, when aggregated with all other amounts remaining on deposit in all DDAs at any time, not exceeding $1,000,000.
“ Revolving Credit Loan ”: each U.S. Facility Revolving Credit Loan and each Canadian Facility Revolving Credit Loan.
“ Revolving Lender ”: any Lender having a Commitment hereunder and/or a Revolving Credit Loan outstanding hereunder.
“ Revolving Note ”: as defined in subsection 2.1(h) .
“ S&P ”: Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and its successors.
“ Sale ”: as defined in the definition of “Consolidated Coverage Ratio.”
“ Sale and Leaseback Transaction ”: any arrangement with any Person providing for the leasing by the Parent Borrower or any of its Subsidiaries of real or personal property that has
 
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been or is to be sold or transferred by the Parent Borrower or any such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Parent Borrower or such Subsidiary.
“ SEC ”: the Securities and Exchange Commission.
“ Secured Bank Product Obligations ”: Bank Product Obligations and Hedging Obligations owing to a Secured Bank Product Provider and evidenced by one or more Bank Products Agreements, Interest Rate Agreements, Currency Agreements or Commodities Agreements that the Borrower Representative on behalf of any Loan Party, in a written notice to the Administrative Agent, has expressly requested be treated as Secured Bank Product Obligations and/or a Qualified Secured Bank Product Obligation for purposes hereof, it being understood that such Bank Product Obligations or Hedging Obligations shall only constitute Secured Bank Product Obligations up to the maximum amount (or, in the case of Qualified Secured Bank Product Obligations, the Hedge Termination Value thereunder) specified by such provider and the Borrower Representative in writing to the Administrative Agent, which amount may be established and increased or decreased by further written notice from such provider to the Administrative Agent from time to time.
“ Secured Bank Product Provider ”: ( a ) Bank of America, N.A. or any of its Affiliates or branches; and ( b ) any other Person that is providing a Bank Product and that, when the written notice set forth below is delivered to the Administrative Agent, is a Lender or Affiliate or branch of a Lender, provided that such provider and the Borrower Representative shall deliver a written notice to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent, by the later of the Closing Date or 10 Business Days (or such later time as the Administrative Agent and the Borrower Representative may agree in their reasonable discretion) following the later of the creation of the Bank Product or such Secured Bank Product Provider (or its Affiliate or branch) becoming a Lender hereunder, ( i ) describing the Bank Product and setting forth the maximum amount of the related Secured Bank Product Obligations (and, if all or any portion of such Secured Bank Product Obligations are to constitute Qualified Secured Bank Product Obligations, the Hedge Termination Value of such Qualified Secured Bank Product Obligations) that are to be secured by the Collateral (which amount may be increased or decreased by further written notice from such provider from time to time) and the methodology to be used in calculating such amount(s) (if applicable) and ( ii ) if such provider is not a Lender, agreeing to be bound by subsection 10.18 .
“ Secured Parties ”: the reference to the Canadian Secured Parties, the U.S. Secured Parties, or the collective reference thereto, as applicable.
“ Securities Act ”: the Securities Act of 1933, as amended from time to time.
“ Security Documents ”: the collective reference to the Canadian Security Documents and the U.S. Security Documents.
“ Set ”: the collective reference to Eurocurrency Loans or BA Equivalent Loans, as applicable, of a single Tranche, the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).
 
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“ Settlement Service ”: as defined in subsection 11.6(b) .
“ Single Employer Plan ”: any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan.
“ Solvent ” and “ Solvency ”: with respect to the Parent Borrower and its Subsidiaries on a consolidated basis after giving effect to the Transactions on the Closing Date: ( i ) the Fair Value and Present Fair Salable Value of the assets of the Parent Borrower and its Subsidiaries taken as a whole exceed their Stated Liabilities and Identified Contingent Liabilities, ( ii ) the Parent Borrower and its Subsidiaries taken as a whole do not have Unreasonably Small Capital and ( iii ) the Parent Borrower and its Subsidiaries taken as a whole will be able to pay their Stated Liabilities and Identified Contingent Liabilities as they mature (all capitalized terms used in this definition (other than “Parent Borrower” and “Subsidiary”, which have the meanings set forth in this Agreement) shall have the meaning assigned to such terms in the form of solvency certificate attached hereto as Exhibit K ).
“ Special Payment ”: as defined in the Contribution Agreement.
“ Special Purpose Entity ”: ( x ) any Special Purpose Subsidiary or ( y ) any other Person that is engaged in the business of ( i ) acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code or the PPSA, as applicable, as in effect in any jurisdiction from time to time), other accounts and/or other receivables and/or related assets and/or ( ii ) acquiring, selling, leasing, financing or refinancing Real Property acquired after the Closing Date and/or related rights (including under leases and insurance policies) and/or assets (including managing, exercising and disposing of any such rights and/or assets).
“ Special Purpose Financing ”: any financing or refinancing of assets consisting of or including Receivables (other than ABL Priority Collateral of the Loan Parties) and/or Real Property (in the case of Real Property acquired after the Closing Date) of the Parent Borrower or any Restricted Subsidiary that have been transferred to a Special Purpose Entity or made subject to a Lien in a Financing Disposition (including any financing or refinancing in respect of Capital Stock of a Special Purpose Subsidiary held by another Special Purpose Subsidiary).
“ Special Purpose Financing Expense ”: for any period, ( a ) the aggregate interest expense for such period on any Indebtedness of any Special Purpose Subsidiary that is a Restricted Subsidiary, which Indebtedness is not recourse to the Parent Borrower or any Restricted Subsidiary that is not a Special Purpose Subsidiary (other than with respect to Special Purpose Financing Undertakings), and ( b ) Special Purpose Financing Fees.
“ Special Purpose Financing Fees ”: distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Special Purpose Financing.
 
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“ Special Purpose Financing Undertakings ”: representations, warranties, covenants, indemnities, guarantees of performance and (subject to clause (y) of the proviso below) other agreements and undertakings entered into or provided by the Parent Borrower or any of its Restricted Subsidiaries that the Parent Borrower determines in good faith (which determination shall be conclusive) are customary or otherwise necessary or advisable in connection with a Special Purpose Financing or a Financing Disposition; provided that ( x ) it is understood that Special Purpose Financing Undertakings may consist of or include ( i ) reimbursement and other obligations in respect of notes, letters of credit, surety bonds and similar instruments provided for credit enhancement purposes, ( ii ) Hedging Obligations, or other obligations relating to Interest Rate Agreements, Currency Agreements or Commodities Agreements entered into by the Parent Borrower or any Restricted Subsidiary, in respect of any Special Purpose Financing or Financing Disposition or ( iii ) any Guarantee in respect of customary recourse obligations (as determined in good faith by the Parent Borrower) in connection with any collateralized mortgage backed securitization or any other Special Purpose Financing or Financing Disposition in respect of Real Property acquired after the Closing Date, including in respect of Liabilities in the event of any involuntary case commenced with the collusion of any Special Purpose Subsidiary or any Affiliate thereof, or any voluntary case commenced by any Special Purpose Subsidiary, under any applicable Bankruptcy Law, and ( y ) subject to the preceding clause (x), any such other agreements and undertakings shall not include any Guarantee of Indebtedness of a Special Purpose Subsidiary by the Parent Borrower or a Restricted Subsidiary that is not a Special Purpose Subsidiary.
“ Special Purpose Subsidiary ”: ( a ) ( i ) a Subsidiary of the Parent Borrower (other than a U.S. or Canadian Subsidiary) that is engaged solely in ( x ) the business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code or the PPSA, as applicable, as in effect in any jurisdiction from time to time) and other accounts and receivables (including any thereof constituting or evidenced by chattel paper, instruments or general intangibles), all proceeds thereof and all rights (contractual and other), collateral and other assets relating thereto, in each case other than ABL Priority Collateral of the Loan Parties and ( y ) any business or activities incidental or related to such business, and ( ii ) a Subsidiary of the Parent Borrower that is engaged solely in ( x ) the business of ( A ) acquiring, selling, leasing, financing or refinancing Real Property acquired after the Closing Date and/or related rights (including under leases and insurance policies) and/or assets (including managing, exercising and disposing of any such rights and/or assets), all proceeds thereof and all rights (contractual and other), collateral and/or other assets relating thereto, and/or ( B ) owning or holding Capital Stock of any Special Purpose Subsidiary and/or engaging in any financing or refinancing in respect thereof and ( y ) any business or activities incidental or related to such business, and ( b ) in each case, such Subsidiary is designated in writing to the Administrative Agent as a “Special Purpose Subsidiary” by the Parent Borrower.
“ Specified Availability ”: as of any date of determination, without duplication of amounts calculated thereunder, the sum of the Excess Availability plus Specified Unrestricted Cash (but excluding therefrom the cash proceeds of any Specified Equity Contribution) (determined as a the date as of which the Borrowing Base component of Excess Availability is determined for purposes of this calculation of Specified Availability) plus Specified Suppressed Availability as at such date. For purposes of the definition of “Payment Condition”, the Specified Availability shall be calculated on a pro forma basis to include the borrowing or repayment of any Loans or
 
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issuance or cancellation of any Letters of Credit in connection with the proposed transaction; provided , that Unrestricted Cash deposited in accounts in Canada shall not constitute Specified Unrestricted Cash to the extent such Unrestricted Cash is not subject to a valid and perfected first priority Lien (subject only to Liens that constitute Permitted Prior Liens under clause (a), (g), (h)(i), (h)(iv), (h)(v), (h)(vii) or (h)(viii) of the definition thereof and, without duplication, Liens for Canadian Priority Payables that are unregistered and that secure amounts that are not yet due and payable) in favor of the ABL Collateral Agent.
“ Specified Default ”: the occurrence of any Event of Default specified in subsection 9(a) , (solely with respect to an Event of Default arising as result of the inaccuracy in a material respect of a representation or warranty in a Borrowing Base Certificate) subsection 9(b) , (solely with respect to an Event of Default arising as a result of the failure of the Parent Borrower to comply with the terms of subsections 4.16(b) and 4.16(c) or with subsection 7.2(f) ) subsection 9(c) or subsection 9(f) .
“ Specified Equity Contribution ”: any cash contribution made to any Parent or the Parent Borrower in exchange for Permitted Cure Securities, which cash contribution, if made to such Parent, is contributed to the Parent Borrower; provided that ( a ) ( i ) such cash contribution is made to any Parent or the Parent Borrower and ( ii ) to the extent required by the foregoing, the contribution of any proceeds therefrom to the Parent Borrower occurs, in each case, ( x ) after the Closing Date and on or prior to the date that is 10 Business Days after the later of ( 1 ) the first day of the applicable Compliance Period and ( 2 ) the date on which financial statements are required to be delivered for the applicable fiscal quarter (or year) as of the end of which compliance with subsection 8.9 is desired to be effected through the use of such contribution or ( y ) on the date a Borrowing Base Certificate is delivered in accordance with subsection 7.2(f) , ( b ) the Parent Borrower identifies such contribution as a “Specified Equity Contribution”, ( c ) in each four consecutive fiscal quarter period, there shall be no more than two Specified Equity Contributions, ( d ) the amount of any Specified Equity Contribution included in the calculation of Consolidated EBITDA hereunder shall be limited to the amount required to effect or continue compliance with subsection 8.9 hereof, whether or not a Compliance Period is in effect, and such amount shall be added to Consolidated EBITDA solely when calculating Consolidated EBITDA for purposes of determining compliance with subsection 8.9 , ( e ) during the term of the ABL Facility, there shall be no more than five Specified Equity Contributions, ( f ) Consolidated Total Indebtedness shall be decreased for purposes of determining compliance with subsection 8.9 solely to the extent proceeds of the Specified Equity Contribution are actually applied to prepay any Indebtedness, and such reduction in Consolidated Total Indebtedness shall not be given pro forma effect, provided that actual reduction in interest expense incurred shall be reflected in determining compliance with the Consolidated Fixed Charge Coverage Ratio in subsequent fiscal quarters, and ( g ) except as set forth in clause (f) above, all proceeds of Specified Equity Contributions shall be disregarded for purposes of determining the Applicable Margin, satisfaction of the Payment Condition, and any baskets or ratios with respect to the other covenants contained in the Loan Documents (including for purposes of determining whether any Specified Payment, incurrence of Indebtedness, or other action or transaction is permitted hereunder).
“ Specified Existing Commitment ”: as defined in subsection 2.7(a) .
 
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“ Specified Payment ”: ( i ) any incurrence of Indebtedness pursuant to subsection 8.1 , ( ii ) any merger, consolidation or amalgamation permitted pursuant to subsection 8.3(a) , ( iii ) any termination or reduction of Commitments pursuant to subsection 2.3(b ), ( iv ) any Restricted Payment pursuant to subsection 8.5 or ( v ) any designation of a Restricted Subsidiary as an “Unrestricted Subsidiary” or the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary pursuant to the definition of “Unrestricted Subsidiary.”
“ Specified Representations ”: the representations set forth in subsections 5.2(a) , 5.3(a) , 5.3(b) , 5.4 , 5.5 (only with respect to organizational documents), 5.11 , 5.13 , 5.14 , and 5.19 .
“ Specified Suppressed Availability ”: as of any date of determination, an amount, if positive, by which ( i ) the Borrowing Base exceeds ( ii ) the Commitments hereunder; provided that if Excess Availability is less than the lesser of ( 1 ) 5% of the Maximum Borrowing Amount and ( 2 ) $50,000,000, such Specified Suppressed Availability shall be zero.
“ Specified Unrestricted Cash ”: as of any date of determination, an amount equal to all Unrestricted Cash of the Loan Parties that (in the case of cash) is deposited in ( i ) DDAs, ( ii ) Concentration Accounts, or ( iii ) other accounts in the United States or Canada, with respect to which a control agreement is in place between the applicable Loan Party, the applicable depositary institution and the Administrative Agent or the ABL Collateral Agent (or over which any such Agent has “control” whether or not pursuant to a control agreement) or that (in the case of Cash Equivalents) ( a ) are in a securities account in respect of which the applicable Loan Party has entered into a “control agreement” with the applicable broker or securities intermediary for purposes of perfecting a security interest in favor of the ABL Collateral Agent and ( b ) are subject to the laws of any state, commonwealth, province or territory of the United States of America or Canada; provided that Unrestricted Cash deposited in accounts in Canada shall not constitute Specified Unrestricted Cash to the extent such Unrestricted Cash is not subject to a valid and perfected first priority Lien (subject only to Liens that constitute Permitted Prior Liens under clause (a), (g), (h)(i), (h)(iv), (h)(v), (h)(vii) or (h)(viii) of the definition thereof and, without duplication, Liens for Canadian Priority Payables that are unregistered and that secure amounts that are not yet due and payable) in favor of the ABL Collateral Agent.
“ Spinco ”: as defined in the recitals hereto.
“ Spinco Material Adverse Effect ”: as defined in the Merger Agreement, it being understood that the determination as to whether or not a Spinco Material Adverse Effect has occurred shall be governed by the law governing the Merger Agreement.
“ Spot Rate of Exchange ”: means the exchange rate, as determined by the Administrative Agent, that is applicable to conversion of one currency into another currency, which is ( a ) the exchange rate reported by Bloomberg (or other commercially available source designated by the Administrative Agent) as of the end of the preceding business day in the financial market for the first currency; or ( b ) if such report is unavailable for any reason, the spot rate for the purchase of the first currency with the second currency as in effect during the preceding business day in the Administrative Agent’s principal foreign exchange trading office for the first currency.
“ Standby Letter of Credit ”: as defined in subsection 3.1(a) .
 
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“ Stated Maturity ”: with respect to any Indebtedness, the date specified in such Indebtedness as the fixed date on which the payment of principal of such Indebtedness is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase or repayment of such Indebtedness at the option of the holder thereof upon the happening of any contingency).
“ Subordinated Obligations ”: any Indebtedness of a Loan Party (whether outstanding on the Closing Date or thereafter Incurred) that is expressly subordinated in right of payment to the Obligations hereunder and under the Loan Documents pursuant to a written agreement.
“ Subsection 2.7 Additional Amendment ”: as defined in subsection 2.7(c) .
“ Subsidiary ”: with regard to any Person, any corporation, association, partnership, or other business entity of which more than 50.0% of the total voting power of shares of Capital Stock or other equity interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly by ( i ) such Person or ( ii ) one or more Subsidiaries of such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Parent Borrower.
“ Subsidiary Borrower ”: any Subsidiary (other than the Canadian Borrower or a Canadian Subsidiary) that becomes a Borrower pursuant to a Joinder Agreement, together with their respective successors and assigns.
“ Subsidiary Guarantee ”: the guarantee of the obligations of the Borrowers under the Loan Document provided pursuant to the U.S. Guarantee and Collateral Agreement or Canadian Guarantee and Collateral Agreement.
“ Subsidiary Guarantor ”: any U.S. Subsidiary Guarantor or Canadian Subsidiary Guarantor.
“ Subsidiary Merger ”: the merger of xpedx Intermediate with and into Unisource with Unisource being the surviving corporation.
“ Successor Company ”: as defined in subsection 8.3(a)(i) .
“ Supermajority Lenders ”: Non-Defaulting Lenders the Total Credit Percentages of which aggregate at least 66 2/3%.
“ Swing Line Commitment ”: the Swing Line Lender’s obligation to make Swing Line Loans pursuant to subsection 2.4 .
“ Swing Line Exposure ”: the participations purchased from the Swing Line Lender by each U.S. Facility Lender in outstanding Swing Line Loans in accordance with subsection 2.4(d) .
“ Swing Line Lender ”: Bank of America, N.A., in its capacity as provider of the Swing Line Loans.
 
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“ Swing Line Loan Participation Certificate ”: a certificate substantially in the form of Exhibit H .
“ Swing Line Loans ”: as defined in subsection 2.4(a) .
“ Swing Line Note ”: as defined in subsection 2.4(b) .
“ Syndication Agent ”: the institution set forth on the cover page hereto as the syndication agent, provided that no entity shall become a Syndication Agent prior to it or one of its affiliates becoming a Lender.
“ Taxes ”: any and all present or future income, stamp or other taxes, levies, imposts, duties, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority.
“ Tax Matters Agreement ”: the Tax Matters Agreement, dated as of January 28, 2014, among International Paper, SpinCo and UWWH, as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Tax Receivable Agreement ”: the Tax Receivable Agreement, dated as of January 28, 2014, among Holding and UWWH, as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Temporary Cash Investments ”: any of the following: ( i ) any investment in ( x ) direct obligations of the United States of America, Canada, a member state of the European Union (other than direct obligations of Portugal, Italy, Ireland, Greece, Spain or direct obligations of any other member state of the European Union that are not rated at least “A” by S&P or at least “A-1” by Moody’s) or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Parent Borrower or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any thereof or obligations Guaranteed by the United States of America, Canada or a member state of the European Union or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Parent Borrower or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any of the foregoing, or obligations guaranteed by any of the foregoing or ( y ) direct obligations of any foreign country recognized by the United States of America rated at least “A” by S&P or “A-1” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), ( ii ) overnight bank deposits, and investments in time deposit accounts, certificates of deposit, bankers’ acceptances and money market deposits (or, with respect to foreign banks, similar instruments) maturing not more than one year after the date of acquisition thereof issued by ( x ) any bank or other institutional lender under a Credit Facility or any affiliate thereof, ( y ) [ — ], or any of their respective affiliates or ( z ) a bank or trust company that is organized under the laws of the United States of America, any state thereof, Canada, any province or territory thereof, or any foreign country recognized by the United States of America having capital and surplus aggregating in excess of $250,000,000 (or the foreign currency equivalent thereof) and whose long term debt is rated at least “A” by S&P or “A-1” by Moody’s
 
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(or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization) at the time such Investment is made, ( iii ) repurchase obligations for underlying securities or instruments of the types described in clause (i) or (ii) above entered into with a bank meeting the qualifications described in clause (ii) above, ( iv ) Investments in commercial paper, maturing not more than 24 months after the date of acquisition, issued by a Person (other than that of the Parent Borrower or any of its Subsidiaries), with a rating at the time as of which any Investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or higher) according to S&P (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), ( v ) Investments in securities maturing not more than 24 months after the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, any province or territory of Canada, or by any political subdivision or taxing authority of any thereof, and rated at least “BBB-” by S&P or “Baa3” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), ( vi ) Indebtedness or Preferred Stock (other than of the Parent Borrower or any of its Subsidiaries) having a rating of “A” or higher by S&P or “A2” or higher by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), ( vii ) investment funds investing 95% of their assets in securities of the type described in clauses (i) through (vi) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution), ( viii ) any money market deposit accounts issued or offered by a domestic commercial bank or a commercial bank organized and located in a country recognized by the United States of America or Canada, in each case, having capital and surplus in excess of $250,000,000 (or the foreign currency equivalent thereof), or investments in money market funds subject to the risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act of 1940, as amended, and ( ix ) similar investments approved by the Parent Borrower in the ordinary course of business.
“ Test Period ”: at any date of determination, the most recently completed four consecutive fiscal quarters of the Parent Borrower ending on or prior to such date for which financial statements have been (or were required to have been) delivered pursuant to subsection 7.1(a) or 7.1(b) ; provided that prior to the first date financial statements have been delivered pursuant to subsection 7.1(a) or 7.1(b) , the Test Period in effect shall be the period of four consecutive fiscal quarters of the Company ended [March 31, 2014].
“ Total Credit Percentage ”: as to any Lender at any time, the percentage of the aggregate Incremental ABL Term Loans and Commitments (or, in the case of the termination or expiration of the Commitments, the Aggregate Credit Extension) then constituted by such Lender’s Incremental ABL Term Loans and Commitments (or, in the case of the termination or expiration of the Commitments, such Lender’s Canadian Facility Lender Exposure and/or U.S. Facility Lender Exposure).
“ Trade Payables ”: with respect to any Person, any accounts payable or any indebtedness or monetary obligation to trade creditors created, assumed or guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods or services.
 
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“ Tranche ”: with respect to Loans or commitments, whether such Loans or commitments are ( i ) Loans or Commitments, ( ii ) Incremental ABL Term Loans or Incremental Revolving Commitments or New Revolving Commitments with the same terms and conditions made on the same day, or ( iii ) Extended Loans or Extended Commitments.
“ Tranche A Canadian Borrowing Base ”: at any time, the sum of ( a ) 85.0% of the lesser of ( i ) Net Orderly Liquidation Value of Eligible Canadian Inventory and ( ii ) Value of Eligible Canadian Inventory, in each case at such time, plus ( b ) 85.0% of the lesser of (i) Net Orderly Liquidation Value of Eligible Canadian In-Transit Inventory and ( ii ) Value of Eligible Canadian In-Transit Inventory, plus ( c ) 85.0% of the lesser of (i) Net Orderly Liquidation Value of Eligible Canadian Letter of Credit Inventory and ( ii ) Value of Eligible Canadian Letter of Credit Inventory, in each case at such time, plus ( d ) 85.0% of Eligible Canadian Accounts at such time, plus ( e ) 90.0% of Eligible Canadian Credit Card Receivables, minus ( f ) the amount of all applicable Availability Reserves, in each case at such time.
“ Tranche A Canadian Facility Commitment ”: as to any Tranche A Canadian Facility Lender, its obligation to make Loans to, and/or participate in Letters of Credit issued on behalf of, and/or participate in Agent Advances made to, in each case the Borrowers in an aggregate amount not to exceed at any one time outstanding the amount set forth opposite such Lender’s name in Schedule A under the heading “Tranche A Canadian Facility Commitment” or, in the case of any Lender that is an Assignee, the amount of the assigning Lender’s Tranche A Canadian Facility Commitment assigned to such Assignee pursuant to subsection 11.6(b) (in each case as such amount may be adjusted from time to time as provided herein); collectively, as to all the Canadian Facility Lenders, the “ Tranche A Canadian Facility Commitments .”
“ Tranche A Canadian Facility Commitment Percentage ”: of any Tranche A Canadian Facility Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the Tranche A Canadian Facility Commitment of such Tranche A Canadian Facility Lender at such time and the denominator of which is the aggregate Tranche A Canadian Facility Commitment of the Tranche A Canadian Facility Lenders at such time, provided that for purposes of subsection 4.17 , “Tranche A Canadian Facility Commitment Percentage” shall mean the percentage of the Aggregate Tranche A Canadian Facility Commitment (disregarding the Tranche A Canadian Facility Commitment of any Defaulting Lender) represented by such Tranche A Canadian Facility Lender’s Tranche A Canadian Facility Commitment; provided , further , that if any such determination is to be made after the termination of the Tranche A Canadian Facility Commitments, the determination of such percentages shall be made immediately before giving effect to such termination.
“ Tranche A Canadian Facility Lender ”: each financial institution or combination of financial institutions which has a Tranche A Canadian Facility Commitment (without giving effect to any termination thereof if there are any outstanding Canadian Facility L/C Obligations) or which has any outstanding Tranche A Canadian Facility Revolving Credit Loans (or a Tranche A Canadian Facility Commitment Percentage in any then outstanding Canadian Facility L/C Obligations); provided that each Tranche A Canadian Facility Lender shall be both ( a ) a Canadian Qualified Lender, unless an Event of Default under subsection 9(a) or 9(f) shall have occurred and be continuing and ( b ) a Person with capacity to lend to ( i ) the Canadian Borrower in Dollars and Canadian Dollars and ( ii ) the U.S. Borrowers in Dollars such that all payments from the U.S. Borrowers to such Person or its applicable lending office for the U.S. Borrowers shall be made free and clear of U.S. withholding tax.
 
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“ Tranche A Canadian Facility Lender Exposure ”: of any Tranche A Canadian Facility Lender at any time shall be an amount equal to its Tranche A Canadian Facility Commitment Percentage of the Dollar Equivalent of the sum of ( a ) the Canadian Facility L/C Obligations then outstanding and ( b ) the outstanding Tranche A Canadian Facility Revolving Credit Loans (including Agent Advances, if any, made as Tranche A Canadian Facility Revolving Credit Loans), in each case as at such time.
“ Tranche A Canadian Facility Revolving Credit Loan ”: as defined in subsection 2.1(b) .
“ Tranche A U.S. Borrowing Base ”: the sum of, at any time, ( a ) 85.0% of the lesser of (i) Net Orderly Liquidation Value of Eligible U.S. Inventory and ( ii ) Value of Eligible U.S. Inventory, in each case at such time, plus (b) 85.0% of the lesser of ( i ) Net Orderly Liquidation Value of Eligible U.S. In-Transit Inventory and ( ii ) Value of Eligible U.S. In-Transit Inventory, plus ( c ) 85.0% of the lesser of ( i ) Net Orderly Liquidation Value of Eligible U.S. Letter of Credit Inventory and ( ii ) Value of Eligible U.S. Letter of Credit Inventory, in each case at such time, plus ( d ) 85.0% of Eligible U.S. Accounts at such time, plus ( e ) 90.0% of Eligible U.S. Credit Card Receivables, minus ( f ) the amount of all applicable Availability Reserves, in each case at such time.
“ Tranche A U.S. Facility Commitment ”: as to any Tranche A U.S. Facility Lender, its obligation to make Loans to, and/or make Swing Line Loans made to, and/or participate in Letters of Credit issued on behalf of, and/or participate in Agent Advances made to, in each case the U.S. Borrowers in an aggregate amount not to exceed at any one time outstanding the amount set forth opposite such Lender’s name in Schedule A under the heading “Tranche A U.S. Facility Commitment” or, in the case of any Lender that is an Assignee, the amount of the assigning Lender’s Tranche A U.S. Facility Commitment assigned to such Assignee pursuant to subsection 11.6(b) (in each case as such amount may be adjusted from time to time as provided herein); collectively, as to all the Tranche A U.S. Facility Lenders, the “ Tranche A U.S. Facility Commitments .”
“ Tranche A U.S. Facility Commitment Percentage ”: of any Tranche A U.S. Facility Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the Tranche A U.S. Facility Commitment of such Tranche A U.S. Facility Lender at such time and the denominator of which is the aggregate Tranche A U.S. Facility Commitments of the Tranche A U.S. Facility Lenders at such time; provided that for purposes of subsection 4.17 , “Tranche A U.S. Facility Commitment Percentage” shall mean the percentage of the aggregate Tranche A U.S. Facility Commitments (disregarding the Tranche A U.S. Facility Commitment of any Defaulting Lender) represented by such Tranche A U.S. Facility Commitment; provided , further , that if any such determination is to be made after the termination of the Tranche A U.S. Facility Commitments, the determination of such percentages shall be made immediately before giving effect to such termination.
“ Tranche A U.S. Facility Lender ”: each Lender which has a Tranche A U.S. Facility Commitment (without giving effect to any termination thereof if there are any outstanding U.S.
 
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Facility L/C Obligations or Swing Line Loans) or which has any outstanding Tranche A U.S. Facility Revolving Credit Loans (or a Tranche A U.S. Facility Commitment Percentage in any then outstanding U.S. Facility L/C Obligations).
“ Tranche A U.S. Facility Lender Exposure ”: of any Tranche A U.S. Facility Lender at any time shall be an amount equal to its Tranche A U.S. Facility Commitment Percentage of the sum of ( a ) the U.S. Facility L/C Obligations then outstanding, ( b ) the outstanding Tranche A U.S. Facility Revolving Credit Loans (including Agent Advances, if any, made as Tranche A U.S. Facility Revolving Credit Loans) and ( c ) the outstanding Swing Line Loans, in each case as at such time.
“ Tranche A U.S. Facility Revolving Credit Loan ”: as provided in subsection 2.1(a) .
“ Tranche A-1 Canadian Borrowing Base ”: the sum of, at any time, ( a ) 5.0% of the lesser of ( i ) Net Orderly Liquidation Value of Eligible Canadian Inventory and ( ii ) Value of Eligible Canadian Inventory, in each case at such time, plus ( b ) 5.0% of the lesser of ( i ) Net Orderly Liquidation Value of Eligible Canadian In-Transit Inventory and ( ii ) Value of Eligible Canadian In-Transit Inventory, in each case at such time, plus ( c ) 5.0% of the lesser of ( i ) Net Orderly Liquidation Value of Eligible Canadian Letter of Credit Inventory and ( ii ) Value of Eligible Canadian Letter of Credit Inventory, in each case at such time, plus ( d ) 5.0% of Eligible Canadian Accounts at such time, plus ( e ) 5.0% of Eligible Canadian Credit Card Receivables at such time.
“ Tranche A-1 Canadian Facility Commitment ”: as to any Tranche A-1 Canadian Facility Lender, its obligation to make Loans to the Borrowers in an aggregate amount not to exceed at any one time outstanding the amount set forth opposite such Lender’s name in Schedule A under the heading “Tranche A-1 Canadian Facility Commitment” or, in the case of any Lender that is an Assignee, the amount of the assigning Lender’s Tranche A-1 Canadian Facility Commitment assigned to such Assignee pursuant to subsection 11.6(b) (in each case as such amount may be adjusted from time to time as provided herein); collectively, as to all the Canadian Facility Lenders, the “ Tranche A-1 Canadian Facility Commitments .”
“ Tranche A-1 Canadian Facility Commitment Percentage ”: of any Tranche A-1 Canadian Facility Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the Tranche A-1 Canadian Facility Commitment of such Tranche A-1 Canadian Facility Lender at such time and the denominator of which is the aggregate Tranche A-1 Canadian Facility Commitment of the Tranche A-1 Canadian Facility Lenders at such time; provided , that if any such determination is to be made after the termination of the Tranche A-1 Canadian Facility Commitments, the determination of such percentages shall be made immediately before giving effect to such termination.
“ Tranche A-1 Canadian Facility Lender ”: each financial institution or combination of financial institutions which has a Tranche A-1 Canadian Facility Commitment or which has any outstanding Tranche A-1 Canadian Facility Revolving Credit Loans; provided that each Tranche A-1 Canadian Facility Lender shall be both (a) a Canadian Qualified Lender, unless an Event of Default under subsection 9(a) or 9(f) shall have occurred and be continuing and ( b ) a Person with capacity to lend to ( i ) the Canadian Borrower in Dollars and Canadian Dollars and ( ii ) the U.S.
 
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Borrowers in Dollars such that all payments from the U.S. Borrowers to such Person or its applicable lending office for the U.S. Borrowers shall be made free and clear of U.S. withholding tax.
“ Tranche A-1 Canadian Facility Lender Exposure ”: of any Tranche A-1 Canadian Facility Lender at any time shall be an amount equal to its Tranche A-1 Canadian Facility Commitment Percentage of the Dollar Equivalent of the outstanding Tranche A-1 Canadian Facility Revolving Credit Loans, in each case as at such time.
“ Tranche A-1 Canadian Facility Revolving Credit Loan ”: as defined in subsection 2.1(b) .
“ Tranche A-1 U.S. Borrowing Base ”: the sum of, at any time, ( a ) 5.0% of the lesser of ( i ) Net Orderly Liquidation Value of Eligible U.S. Inventory and ( ii ) Value of Eligible U.S. Inventory, in each case at such time, plus ( b ) 5.0% of the lesser of ( i ) Net Orderly Liquidation Value of Eligible U.S. In-Transit Inventory and ( ii ) Value of Eligible U.S. In-Transit Inventory, in each case at such time, plus ( c ) 5.0% of the lesser of ( i ) Net Orderly Liquidation Value of Eligible U.S. Letter of Credit Inventory and (ii) Value of Eligible U.S. Letter of Credit Inventory, in each case at such time, plus ( d ) 5.0% of Eligible U.S. Accounts at such time, plus ( e ) 5.0% of Eligible U.S. Credit Card Receivables at such time.
“ Tranche A-1 U.S. Facility Commitment ”: as to any Tranche A-1 U.S. Facility Lender, its obligation to make Loans to the U.S. Borrowers in an aggregate amount not to exceed at any one time outstanding the amount set forth opposite such Lender’s name in Schedule A under the heading “Tranche A-1 U.S. Facility Commitment” or, in the case of any Lender that is an Assignee, the amount of the assigning Lender’s Tranche A-1 U.S. Facility Commitment assigned to such Assignee pursuant to subsection 11.6(b) (in each case as such amount may be adjusted from time to time as provided herein); collectively, as to all the Tranche A-1 U.S. Facility Lenders, the “ Tranche A-1 U.S. Facility Commitments .”
“ Tranche A-1 U.S. Facility Commitment Percentage ”: of any Tranche A-1 U.S. Facility Lender at any time shall be that percentage which is equal to a fraction (expressed as a percentage) the numerator of which is the Tranche A-1 U.S. Facility Commitment of such Tranche A-1 U.S. Facility Lender at such time and the denominator of which is the aggregate Tranche A-1 U.S. Facility Commitments of the Tranche A-1 U.S. Facility Lenders at such time; provided that if any such determination is to be made after the termination of the Tranche A-1 U.S. Facility Commitments, the determination of such percentages shall be made immediately before giving effect to such termination.
“ Tranche A-1 U.S. Facility Lender ”: each Lender which has a Tranche A-1 U.S. Facility Commitment or which has any outstanding Tranche A-1 U.S. Facility Revolving Credit Loans.
“ Tranche A-1 U.S. Facility Lender Exposure ”: of any Tranche A-1 U.S. Facility Lender at any time shall be an amount equal to its Tranche A-1 U.S. Facility Commitment Percentage of the outstanding Tranche A-1 U.S. Facility Revolving Credit Loans, in each case as at such time.
“ Tranche A-1 U.S. Facility Revolving Credit Loan ”: as provided in subsection 2.1(a) .
 
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“ Transaction Agreement ”: each agreement listed on Schedule 1.1T .
“ Transactions ”: collectively, the transactions contemplated by the Merger Agreement, the Contribution Agreement and the other Transaction Agreements, including ( i ) the Parent Merger and the Subsidiary Merger, ( ii ) the making of the Special Payment (as defined in the Contribution Agreement) to International Paper, ( iii ) the entry into this Agreement and the incurrence of Indebtedness hereunder and ( iv ) all other transactions relating to any of the foregoing (including payment of fees and expenses related to any of the foregoing).
“ Transferee ”: any Participant or Assignee.
“ Treasury Capital Stock ”: as defined in subsection 8.5(b)(i) .
“ Type ”: the type of Loan determined based on the interest option applicable thereto, with there being two Types of Loans hereunder, namely ABR Loans and Eurocurrency Loans.
“ UCC ”: the Uniform Commercial Code as in effect in the State of New York from time to time.
“ Underfunding ”: the excess of the present value of all accrued benefits under a Single Employer Plan (based on those assumptions used to fund such Single Employer Plan), determined as of the most recent annual valuation date, over the value of the assets of such Single Employer Plan allocable to such accrued benefits.
“ Uniform Customs ”: the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600, as the same may be amended from time to time.
“ Unisource ”: as defined in the recitals hereto.
“ Unrestricted Cash ”: cash, Cash Equivalents and Temporary Cash Investments, other than ( i ) as disclosed in the consolidated financial statements of the Parent Borrower as a line item on the balance sheet as “restricted cash” and ( ii ) cash, Cash Equivalents and Temporary Cash Investments of a Captive Insurance Subsidiary to the extent such cash, Cash Equivalents and Temporary Cash Investments are not permitted by applicable law or regulation to be dividended, distributed or otherwise transferred to the Borrower or any Restricted Subsidiary that is not a Captive Insurance Subsidiary.
“ Unrestricted Subsidiary ”: ( i ) any Subsidiary of the Parent Borrower that at the time of determination is an Unrestricted Subsidiary, as designated by the Parent Borrower in the manner provided below and ( ii ) any Subsidiary of an Unrestricted Subsidiary. The Parent Borrower may designate any Subsidiary of the Parent Borrower (including any newly acquired or newly formed Subsidiary of the Parent Borrower) to be an Unrestricted Subsidiary or redesignate any Unrestricted Subsidiary as a Restricted Subsidiary; provided that either ( A ) the Subsidiary to be so designated has total assets of the Dollar Equivalent of $1,000 or less or ( B ) ( x ) immediately before and after such designation, no Event of Default shall have occurred and be continuing and ( y ) the Payment Condition shall be satisfied. Any such designation by the Parent Borrower shall be evidenced to the Administrative Agent by promptly delivering to the Administrative Agent a certificate signed by a Responsible Officer of the Parent Borrower certifying that such designation complied with the foregoing provisions.
 
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“ U.S. Borrowers ”: the Parent Borrower and the Subsidiary Borrowers.
“ U.S. Core Concentration Account ”: as defined in subsection 4.16(d)(i) .
“ U.S. Facility Commitment ”: as to any Lender, its Tranche A U.S. Facility Commitment and its Tranche A-1 U.S. Facility Commitment. The original amount of the aggregate U.S. Facility Commitments of the U.S. Facility Lenders is $1,250,000,000.
“ U.S. Facility Issuing Lender ”: as the context may require, ( i ) Bank of America, N.A., or any Affiliate thereof, in its capacity as issuer of any Letter of Credit and/or ( ii ) any other U.S. Facility Lender that may become a U.S. Facility Issuing Lender under subsection 3.9 .
“ U.S. Facility L/C Obligations ”: at any time, an amount equal to the sum of ( a ) the aggregate then undrawn and unexpired amount of the then outstanding U.S. Facility Letters of Credit (including in the case of outstanding U.S. Facility Letters of Credit in Canadian Dollars, the Dollar Equivalent of the aggregate then undrawn and unexpired amount thereof) and ( b ) the aggregate amount of drawings under U.S. Facility Letters of Credit which have not then been reimbursed pursuant to subsection 3.5(a) (including in the case of U.S. Facility Letters of Credit in Canadian Dollars, the Dollar Equivalent of the unreimbursed aggregate amount of drawings thereunder, to the extent that such amount has not been converted into Dollars in accordance with subsection 3.5(a) ).
“ U.S. Facility L/C Participants ”: the Tranche A U.S. Facility Lenders.
“ U.S. Facility Lender ”: any Tranche A U.S. Facility Lender and/or any Tranche A-1 U.S. Facility Lender, as applicable.
“ U.S. Facility Lender Exposure ”: of any U.S. Facility Lender at any time shall be an amount equal to the sum of its Tranche A U.S. Facility Lender Exposure and its Tranche A-1 U.S. Facility Lender Exposure.
“ U.S. Facility Letters of Credit ”: Letters of Credit (including Existing Letters of Credit) issued by the U.S. Facility Issuing Lender to, or for the account of, the U.S. Borrowers, pursuant to subsection 3.1 .
“ U.S. Facility Revolving Credit Loan ”: as defined in subsection 2.1(a) .
“ U.S. Guarantee and Collateral Agreement ”: the U.S. Guarantee and Collateral Agreement delivered to the ABL Collateral Agent as of the date hereof, substantially in the form of Exhibit C , as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ U.S. Loan Party ”: each U.S. Borrower and each U.S. Subsidiary Guarantor.
 
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“ U.S. Secured Parties ”: the “Secured Parties” as defined in the U.S. Guarantee and Collateral Agreement.
“ U.S. Security Documents ”: the collective reference to each Mortgage related to any Mortgaged Property, the U.S. Guarantee and Collateral Agreement and all other similar security documents hereafter delivered to the ABL Collateral Agent granting a Lien on any asset or assets of any Person to secure the obligations and liabilities of the Loan Parties hereunder and/or under any of the other Loan Documents or to secure any guarantee of any such obligations and liabilities, including any security documents executed and delivered or caused to be delivered to the ABL Collateral Agent pursuant to subsection 7.9 , in each case, as amended, supplemented, waived or otherwise modified from time to time.
“ U.S. Subsidiary Guarantor ”: any Domestic Subsidiary (other than any Excluded Subsidiary) of the Parent Borrower that executes and delivers a Subsidiary Guarantee, in each case, unless and until such time as the respective Subsidiary Guarantor ceases to constitute a Domestic Subsidiary of the Borrower or is released from all of its obligations under the Subsidiary Guarantee in accordance with the terms and provisions thereof.
“ U.S. Tax Compliance Certificate ”: as defined in subsection 4.11(a) .
“ UWWH ”: as defined in the recitals hereto.
“ UWWH Material Adverse Effect ”: as defined in the Merger Agreement, it being understood that the determination as to whether or not a UWWH Material Adverse Effect has occurred shall be governed by the law governing the Merger Agreement.
“ Value ”: with reference to the value of Inventory, value determined on the basis of the cost of such Inventory, with such cost calculated on a first-in, first-out basis, determined in accordance with GAAP.
“ Voting Stock ”: shares of Capital Stock entitled to vote generally in the election of directors.
“ Wholly-Owned Subsidiary ”: as to any Person, any Subsidiary of such Person of which such Person owns, directly or indirectly, through one or more Wholly-Owned Subsidiaries, all of the Capital Stock of such Subsidiary, other than directors, qualifying shares or shares held by nominees.
“ xpedx ”: xpedx, LLC, and any successor in interest thereto.
“ xpedx Business ”: the Spinco Business (as defined in the Contribution Agreement).
“ xpedx Intermediate ”: xpedx Intermediate, LLC, and any successor in interest thereto.
 
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1.2 Other Definitional Provisions .
(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any Notes, any other Loan Document or any certificate or other document made or delivered pursuant hereto.
(b) As used herein and in any Notes and any other Loan Document, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1 , to the extent not defined, shall have the respective meanings given to them under GAAP.
(c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” if not expressly followed by such phrase or the phrase “but not limited to.”
(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
(e) For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: ( i ) “or” is not exclusive; and ( ii ) references to sections of, or rules under, the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time.
(f) For purposes of any assets, liabilities or entities located in the Province of Québec and for all other purposes pursuant to which the interpretation or construction of this Agreement may be subject to the laws of the Province of Québec or a court or tribunal exercising jurisdiction in the Province of Québec, ( a ) “personal property” shall be deemed to include “movable property,” ( b ) “real property” shall be deemed to include “immovable property,” ( c ) “tangible property” shall be deemed to include “corporeal property,” ( d ) “intangible property” shall be deemed to include “incorporeal property,” ( e ) “security interest,” “mortgage” and “lien” shall be deemed to include a “hypothec,” “prior claim” and a “resolutory clause,” ( f ) all references to filing, registering or recording under the UCC or the PPSA shall be deemed to include publication under the Civil Code of Québec , ( g ) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to an “opposable” or “set up” Lien as against third parties, ( h ) any “right of offset,” “right of setoff” or similar expression shall be deemed to include a “right of compensation,” ( i ) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, ( j ) an “agent” shall be deemed to include a “mandatary,” ( k ) “construction liens” shall be deemed to include “legal hypothecs,” ( l ) “joint and several” shall be deemed to include “solidary,” ( m ) “gross negligence or wilful misconduct” shall be deemed to be “intentional or gross fault,” ( n ) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary,” ( o ) “easement” shall be deemed to include “servitude,” ( p ) “priority” shall be deemed to include “prior claim,” ( q ) “survey” shall be deemed to include “certificate of location and plan,” and ( r ) “fee simple title” shall be deemed to include “absolute ownership.”
 
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(g) In connection with any action being taken in connection with a Limited Condition Acquisition, for purposes of determining compliance with any provision of this Agreement which requires that no Default, Event of Default, Specified Default or specified Event of Default, as applicable, has occurred, is continuing or would result from any such action, as applicable, such condition shall, at the option of the Borrower Representative, be deemed satisfied, so long as no Default, Event of Default, Specified Default or specified Event of Default, as applicable, exists on the date the definitive agreements for such Limited Condition Acquisition are entered into. For the avoidance of doubt, if the Borrower Representative has exercised its option under the first sentence of this clause (g), and any Default or Event of Default occurs following the date the definitive agreements for the applicable Limited Condition Acquisition were entered into and prior to the consummation of such Limited Condition Acquisition, any such Default or Event of Default shall be deemed to not have occurred or be continuing for purposes of determining whether any action being taken in connection with such Limited Condition Acquisition is permitted hereunder.
(h) In connection with any action being taken in connection with a Limited Condition Acquisition, for purposes of:
(i) determining compliance with any provision of this Agreement which requires the calculation of the Consolidated Coverage Ratio and the Consolidated Secured Leverage Ratio; or
(ii) testing baskets set forth in this Agreement (including baskets measured as a percentage of Consolidated Total Assets or Consolidated EBITDA);
in each case, at the option of the Borrower Representative (the Borrower Representative’s election to exercise such option in connection with any Limited Condition Acquisition, an “ LCA Election ”), the date of determination of whether any such action is permitted hereunder, shall be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the “ LCA Test Date ”), and if, after giving pro forma effect to the Limited Condition Acquisition and the other transactions to be entered into in connection therewith (including any Incurrence of Indebtedness and the use of proceeds thereof) as if they had occurred at the beginning of the most recent four consecutive fiscal quarters ending prior to the LCA Test Date for which consolidated financial statements of the Borrower Representative are available, the Borrower Representative could have taken such action on the relevant LCA Test Date in compliance with such ratio or basket, such ratio or basket shall be deemed to have been complied with. For the avoidance of doubt, if the Borrower Representative has made an LCA Election and any of the ratios or baskets for which compliance was determined or tested as of the LCA Test Date are exceeded as a result of fluctuations in any such ratio or basket, including due to fluctuations in Consolidated EBITDA or Consolidated Total Assets of the Borrower Representative or the Person subject to such Limited Condition Acquisition, at or prior to the consummation of the relevant transaction or action, such baskets or ratios will not be deemed to have been exceeded as a result of such fluctuations.
 
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1.3 Accounting Terms .
(a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, as in effect from time to time.
(b) If at any time any change in GAAP or the application thereof would affect the computation or interpretation of any financial ratio, basket, requirement or other provision set forth in any Loan Document, and either a Borrower or the Required Lenders shall so request, the Administrative Agent and the Borrower Representative shall negotiate in good faith to amend such ratio, basket, requirement or other provision to preserve the original intent thereof in light of such change in GAAP or the application thereof (and the Lenders hereby irrevocably authorize the Administrative Agent to enter into any such amendment); provided that, until so amended, ( i ) ( A ) such ratio, basket, requirement or other provision shall continue to be computed or interpreted in accordance with GAAP or the application thereof prior to such change therein and ( B ) the Borrower Representative shall provide to the Administrative Agent and the Lenders a written reconciliation in form and substance reasonably satisfactory to the Administrative Agent, between calculations of such ratio, basket, requirement or other provision made before and after giving effect to such change in GAAP or the application thereof or ( ii ) the Borrower Representative may elect to fix GAAP (for purposes of such ratio, basket, requirement or other provision) as of another later date notified in writing to the Administrative Agent from time to time.
(c) Notwithstanding anything to the contrary contained herein, all such financial statements shall be prepared, and all financial covenants contained herein or in any other Loan Document shall be calculated, in each case, without giving effect to any election under FASB ASC 825 (or any similar accounting principle) permitting a Person to value its financial liabilities at the fair value thereof.
1.4 Exchange Rates; Currency Equivalents; Borrowing Base .
(a) The Administrative Agent shall determine the Spot Rate of Exchange as of each applicable date of determination for components of the Borrowing Base or credit exposure to be used for calculating the Dollar Equivalent of each component of the Borrowing Base or credit exposure not originally stated in Dollars. Such Spot Rates of Exchange shall become effective as of such date and shall be the Spot Rate of Exchange employed in converting any amounts between the applicable currencies until the next applicable date of determination. Where the permissibility of a transaction or a representation, warranty or covenant depends upon compliance with, or is determined by reference to, amounts stated in Dollars, any amount stated in another currency shall be translated to the Dollar Equivalent of such amount at the applicable time of determination hereunder and the permissibility of actions taken under Section 8 shall not be affected by
 
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subsequent fluctuations in exchange rates. Further, if Indebtedness is incurred to refinance Indebtedness in a transaction otherwise permitted hereunder and such refinanced Indebtedness is denominated in a currency that is different from the currency of the Indebtedness being incurred, such refinancing shall be deemed not to have exceeded the principal amount of the refinanced Indebtedness so long as the principal amount of such refinancing Indebtedness incurred does not exceed ( i ) the outstanding committed or principal amount (whichever is higher) of such Indebtedness being refinanced determined at the Spot Rate of Exchange as of the applicable date of determination plus ( ii ) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing.
(b) At any given time, the Borrowing Base, the Tranche A U.S. Borrowing Base, the Tranche A-1 U.S. Borrowing Base, the Tranche A Canadian Borrowing Base and the Tranche A-1 Canadian Borrowing Base shall be determined based on the Borrowing Base Certificate last delivered.
 
SECTION 2.	AMOUNT AND TERMS OF COMMITMENTS .	
2.1 Commitments .
(a) Subject to the terms and conditions hereof, ( A ) each Tranche A U.S. Facility Lender with a Tranche A U.S. Facility Commitment severally agrees to make to the U.S. Borrowers (on a joint and several basis as between the U.S. Borrowers), at any time and from time to time during the Commitment Period, a revolving credit loan or revolving credit loans (each a “ Tranche A U.S. Facility Revolving Credit Loan ” and, collectively, the “ Tranche A U.S. Facility Revolving Credit Loans ”) in an aggregate principal amount equal to such Tranche A U.S. Facility Lender’s Tranche A U.S. Facility Commitment and ( B ) each Tranche A-1 U.S. Facility Lender with a Tranche A-1 U.S. Facility Commitment severally agrees to make to the U.S. Borrowers (on a joint and several basis as between the U.S. Borrowers), at any time and from time to time during the Commitment Period, a revolving credit loan or revolving credit loans (each a “ Tranche A-1 U.S. Facility Revolving Credit Loan ” and, collectively, the “ Tranche A-1 U.S. Facility Revolving Credit Loans ”, and together with the Tranche A U.S. Facility Revolving Credit Loans, the “ U.S. Facility Revolving Credit Loans ”) in an aggregate principal amount equal to such Tranche A-1 U.S. Facility Lender’s Tranche A-1 U.S. Facility Commitment; provided that:
(i) no Tranche A U.S. Facility Lender shall have any obligations to make a Tranche A U.S. Facility Revolving Credit Loan to the extent that such Tranche A U.S. Facility Revolving Credit Loan would result in ( A ) the Tranche A U.S. Facility Lender Exposure of such Tranche A U.S. Facility Lender exceeding its Tranche A U.S. Facility Commitment or ( B ) the Aggregate Tranche A U.S. Borrower Credit Extensions exceeding the Tranche A U.S. Borrowing Base;
(ii) no Tranche A-1 U.S. Facility Lender shall have any obligations to make a Tranche A-1 U.S. Facility Revolving Credit Loan to the extent that such Tranche A-1 U.S. Facility Revolving Credit Loan would result in ( A ) the Tranche A-1
 
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U.S. Facility Lender Exposure of such Tranche A-1 U.S. Facility Lender exceeding its Tranche A-1 U.S. Facility Commitment or ( B ) the Aggregate Tranche A-1 U.S. Borrower Credit Extensions exceeding the Tranche A-1 U.S. Borrowing Base; and
(iii) except for Agent Advances pursuant to subsection 2.1(d) and Mandatory Revolving Loan Borrowings pursuant to subsection 2.4(c) , all U.S. Facility Revolving Credit Loans made hereunder ( x ) shall be made as Tranche A-1 U.S. Facility Revolving Credit Loans unless and until the aggregate outstanding principal amount of U.S. Facility Revolving Credit Loans equals the lesser of ( 1 ) the Tranche A-1 U.S. Facility Commitments and ( 2 ) the Tranche A-1 U.S. Borrowing Base, and ( y ) thereafter, shall be made as Tranche A U.S. Facility Revolving Credit Loans.
A single Borrowing Request may consist of both Tranche A U.S. Facility Revolving Credit Loans and Tranche A-1 U.S. Facility Revolving Credit Loans. Such U.S. Facility Revolving Credit Loans shall be made in Dollars and may from time to time be ( i ) ABR Loans, ( ii ) Eurocurrency Loans or ( iii ) a combination thereof, as determined by the applicable Borrower and notified to the Administrative Agent in accordance with subsections 2.2 and 4.2 ; provided that no Loan shall be made as a Eurocurrency Loan after the day that is one month prior to the Maturity Date.
(b) Subject to the terms and conditions hereof, ( A ) each Tranche A Canadian Facility Lender with a Tranche A Canadian Facility Commitment severally agrees to make to ( i ) the Canadian Borrower and ( ii ) the U.S. Borrowers (on a joint and several basis as between the U.S. Borrowers with respect to such revolving credit loans made to the U.S. Borrowers), at any time and from time to time during the Commitment Period, a revolving credit loan or revolving credit loans (each a “ Tranche A Canadian Facility Revolving Credit Loan ” and, collectively, the “ Tranche A Canadian Facility Revolving Credit Loans ”) in an aggregate principal amount equal to such Tranche A Canadian Facility Lender’s Tranche A Canadian Facility Commitment and ( B ) each Tranche A-1 Canadian Facility Lender with a Tranche A-1 Canadian Facility Commitment severally agrees to make to the Canadian Borrower, at any time and from time to time during the Commitment Period, a revolving credit loan or revolving credit loans (each a “ Tranche A-1 Canadian Facility Revolving Credit Loan ” and, collectively, the “ Tranche A-1 Canadian Facility Revolving Credit Loans ”, and together with the Tranche A Canadian Facility Revolving Credit Loans, the “ Canadian Facility Revolving Credit Loans ”) in an aggregate principal amount equal to such Tranche A-1 Canadian Facility Lender’s Tranche A-1 Canadian Facility Commitment; provided that:
(i) no Tranche A Canadian Facility Lender shall have any obligations to make a Tranche A Canadian Facility Revolving Credit Loan to the extent that such Tranche A Canadian Facility Revolving Credit Loan would result in ( A ) the Tranche A Canadian Facility Lender Exposure of such Tranche A Canadian Facility Lender exceeding the Dollar Equivalent of its Tranche A Canadian Facility Commitment, ( B ) in the case of Tranche A Canadian Facility Revolving Credit Loans made to the Canadian Borrower, the Aggregate Tranche A Canadian
 
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Borrower Credit Extensions exceeding the sum of ( a ) the Dollar Equivalent of the Tranche A Canadian Borrowing Base plus ( b ) the difference, if positive, between the Tranche A U.S. Borrowing Base and the Aggregate Tranche A U.S. Facility Extensions or (C) in the case of Tranche A Canadian Facility Revolving Credit Loans made to the U.S. Borrowers, the Aggregate Tranche A U.S. Borrower Credit Extensions exceeding the Tranche A U.S. Borrowing Base;
(ii) no Tranche A-1 Canadian Facility Lender shall have any obligations to make a Tranche A-1 Canadian Facility Revolving Credit Loan to the extent that such Tranche A-1 Canadian Facility Revolving Credit Loan would result in ( A ) the Tranche A-1 Canadian Facility Lender Exposure of such Tranche A-1 Canadian Facility Lender exceeding the Dollar Equivalent of its Tranche A-1 Canadian Facility Commitment or ( B ) the Aggregate Tranche A-1 Canadian Borrower Credit Extensions exceeding the Dollar Equivalent of the Tranche A-1 Canadian Borrowing Base; and
(iii) except for Agent Advances pursuant to subsection 2.1(d) , all Canadian Facility Revolving Credit Loans hereunder made to the Canadian Borrower ( x ) shall be made as Tranche A-1 Canadian Facility Revolving Credit Loans unless and until the aggregate outstanding principal amount of Canadian Facility Revolving Credit Loans equals the lesser of ( 1 ) the Tranche A-1 Canadian Facility Commitments and ( 2 ) the Tranche A-1 Canadian Borrowing Base, and ( y ) thereafter, shall be made as Tranche A Canadian Facility Revolving Credit Loans. Canadian Facility Revolving Credit Loans made under subsection 2.1(b)(A)(ii) shall be made as Tranche A Canadian Facility Revolving Credit Loans.
A single Borrowing Request may consist of both Tranche A Canadian Facility Revolving Credit Loans and Tranche A-1 Canadian Facility Revolving Credit Loans. Such Canadian Facility Revolving Credit Loans shall be denominated in Canadian Dollars or in Dollars and may from time to time be ( x ) in the case of the Canadian Facility Revolving Credit Loans denominated in Canadian Dollars (in the case of the Canadian Borrower) and in Dollars (in the case of the U.S. Borrowers), ( i ) ABR Loans, ( ii ) BA Equivalent Loans or ( iii ) a combination thereof, and ( y ) in the case of the Canadian Facility Revolving Credit Loans denominated in Dollars, ( i ) ABR Loans, ( ii ) Eurocurrency Loans or ( iii ) a combination thereof, in each case as determined by the applicable Borrower and notified to the Administrative Agent in accordance with subsections 2.2 and 4.2 ; provided that no Loan shall be made as a Eurocurrency Loan or BA Equivalent Loan after the day that is one month prior to the Maturity Date.
(c) Notwithstanding anything to the contrary in subsection 2.1(a) or 2.1(b) or elsewhere in this Agreement, the Administrative Agent shall have the right to establish Availability Reserves in such amounts, and with respect to such matters, as the Administrative Agent in its Permitted Discretion shall deem necessary or appropriate, against the Tranche A U.S. Borrowing Base and/or the Tranche A Canadian Borrowing Base, as applicable, including reserves with respect to ( i ) sums that the respective Borrowers are or will be required to pay (such as taxes (including payroll and sales taxes), assessments, insurance premiums, or, in the case of leased assets, rents or other
 
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amounts payable under such leases) and have not yet paid and ( ii ) amounts owing by the respective Borrowers or, without duplication, their respective Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the ABL Priority Collateral, which Lien or trust, in the Permitted Discretion of the Administrative Agent is capable of ranking senior in priority to or pari passu with one or more of the Liens granted in the Security Documents (such as Canadian Priority Payables, Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem , excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral; provided that the Administrative Agent shall have provided the Borrower Representative at least five Business Days’ prior written notice of any such establishment and provided , further , that the Administrative Agent may only establish an Availability Reserve after the date hereof based on an event, condition or other circumstance arising after the Closing Date or based on facts not known to the Administrative Agent as of the Closing Date. The amount of any Availability Reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition or other matter that is the basis for the Availability Reserve. Upon delivery of such notice, the Administrative Agent shall be available to discuss the proposed Availability Reserve, and the applicable Borrower may take such action as may be required so that the event, condition or matter that is the basis for such Availability Reserve or increase no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent in the exercise of its Permitted Discretion. In no event shall such notice and opportunity limit the right of the Administrative Agent to establish such Availability Reserve, unless the Administrative Agent shall have determined in its Permitted Discretion that the event, condition or other matter that is the basis for such new Availability Reserve no longer exists or has otherwise been adequately addressed by the applicable Borrower. Notwithstanding anything herein to the contrary, Availability Reserves shall not duplicate eligibility criteria contained in the definition of “Eligible Accounts,” “Eligible Credit Card Receivables,” “Eligible Inventory,” “Eligible In-Transit Inventory,” or “Eligible Letter of Credit Inventory,” as the case may be, and vice versa, or reserves or criteria deducted in computing the Value of Eligible Inventory, Eligible In-Transit Inventory or Eligible Letter of Credit Inventory, as the case may be, or the Net Orderly Liquidation Value of Eligible Inventory, Eligible In-Transit Inventory or Eligible Letter of Credit Inventory, as the case may be, and vice versa. In addition to the foregoing, the Administrative Agent shall have the right, subject to subsection 7.6 , to have the Loan Parties’ Inventory reappraised by a qualified appraisal company selected by the Administrative Agent from time to time after the Closing Date for the purpose of redetermining the Net Orderly Liquidation Value of the Eligible Inventory, Eligible In-Transit Inventory and Eligible Letter of Credit Inventory and, as a result, redetermining the Tranche A U.S. Borrowing Base, the Tranche A-1 U.S. Borrowing Base, the Tranche A Canadian Borrowing Base or the Tranche A-1 Canadian Borrowing Base.
(d) In the event the U.S. Borrowers are, or the Canadian Borrower is, as applicable, unable to comply with ( i ) the borrowing base limitations set forth in subsection 2.1(a) or 2.1(b) , as applicable, or ( ii ) the conditions precedent to the making of Loans or the issuance of Letters of Credit set forth in Section 6 , ( x ) the U.S. Facility Lenders authorize the Administrative Agent, for the account of the U.S. Facility Lenders,
 
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to make U.S. Facility Revolving Credit Loans to the U.S. Borrowers and ( y ) the Canadian Facility Lenders authorize the Administrative Agent (acting through its Canada branch), for the account of the Canadian Facility Lenders, to make Canadian Facility Revolving Credit Loans to the Canadian Borrower, which, in each case, shall be made ( 1 ) in the case of any U.S. Facility Revolving Credit Loan to the U.S. Borrowers, as Tranche A U.S. Facility Revolving Credit Loans and ( 2 ) in the case of any Canadian Facility Revolving Credit Loan to the Canadian Borrower, as Tranche A Canadian Facility Revolving Credit Loans, and which, in each case, may only be made as ABR Loans (each, an “ Agent Advance ”) for a period commencing on the date the Administrative Agent first receives a Borrowing Request requesting an Agent Advance until the earliest of ( i ) the 30th Business Day after such date, ( ii ) the date the respective Borrowers or Borrower is again able to comply with the limitations in the Borrowing Base and the conditions precedent to the making of Loans and issuance of Letters of Credit, or obtains an amendment or waiver with respect thereto and ( iii ) the date the Required Lenders instruct the Administrative Agent to cease making Agent Advances (in each case, the “ Agent Advance Period ”).
(e) The Administrative Agent shall not make any Agent Advance ( A ) in the case of Agent Advances made to the Canadian Borrower, ( I ) to the extent that at such time the amount of such Agent Advance, when added to the aggregate outstanding amount of all other Agent Advances made to the Canadian Borrower at such time, would exceed 5.0% of the Tranche A Canadian Borrowing Base as then in effect or ( II ) to the extent that at such time the amount of such Agent Advance when added to the Aggregate Tranche A Canadian Facility Lender Exposure as then in effect (immediately prior to the incurrence of such Agent Advance), would exceed the Aggregate Tranche A Canadian Facility Commitment at such time, or ( B ) in the case of Agent Advances made to the U.S. Borrowers, ( I ) when added to the aggregate outstanding amount of all other Agent Advances made to the U.S. Borrowers at such time, would exceed 5.0% of the Tranche A U.S. Borrowing Base at such time or ( II ) to the extent that at such time the amount of such Agent Advance when added to the Aggregate Tranche A U.S. Facility Lender Exposure as then in effect (immediately prior to the incurrence of such Agent Advance), would exceed the Aggregate Tranche A U.S. Facility Commitment at such time. It is understood and agreed that, subject to the requirements set forth above, Agent Advances may be made by the Administrative Agent in its discretion to the extent the Administrative Agent deems such Agent Advances necessary or desirable ( x ) to preserve and protect the applicable Collateral, or any portion thereof, ( y ) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other obligations of the Loan Parties hereunder and under the other Loan Documents or ( z ) to pay any other amount chargeable to or required to be paid by the Borrowers pursuant to the terms of any Loan Document, including payments of reimbursable expenses and other sums payable under the Loan Documents, and that the Borrowers shall have no right to require that any Agent Advances be made. At any time that the conditions precedent set forth in subsection 6.2 have been satisfied or waived, the Administrative Agent may request the applicable Lenders to make a Loan to repay an Agent Advance. At any other time, the Administrative Agent may require the applicable Lenders to fund their risk participations described in subsection 2.1(f) or 2.1(g) below.
 
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(f) Upon the making of an Agent Advance by the Administrative Agent (whether before or after the occurrence of a Default or an Event of Default), each Tranche A U.S. Facility Lender shall be deemed, without further action by any party hereto, unconditionally and irrevocably to have purchased from the Administrative Agent, without recourse or warranty, an undivided interest and participation in such Agent Advance in proportion to its Tranche A U.S. Facility Commitment Percentage. From and after the date, if any, on which any Tranche A U.S. Facility Lender is required to fund its participation in any Agent Advance purchased hereunder, the Administrative Agent shall promptly distribute to such Tranche A U.S. Facility Lender its Tranche A U.S. Facility Commitment Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Agent Advance.
(g) Upon the making of an Agent Advance by the Administrative Agent (whether before or after the occurrence of a Default or an Event of Default), each Tranche A Canadian Facility Lender shall be deemed, without further action by any party hereto, unconditionally and irrevocably to have purchased from the Administrative Agent, without recourse or warranty, an undivided interest and participation in such Agent Advance in proportion to its Tranche A Canadian Facility Commitment Percentage. From and after the date, if any, on which any Tranche A Canadian Facility Lender is required to fund its participation in any Agent Advance purchased hereunder, the Administrative Agent shall promptly distribute to such Canadian Facility Lender its Tranche A Canadian Facility Commitment Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Agent Advance.
(h) Each Borrower agrees that, upon the request to the Administrative Agent by any Lender made on or prior to the Closing Date or in connection with any assignment pursuant to subsection 11.6(b) , in order to evidence such Lender’s Loans, such Borrower will execute and deliver to such Lender a promissory note substantially in the form of Exhibit I-1 with appropriate insertions as to payee, date and principal amount (each, as amended, supplemented, replaced or otherwise modified from time to time, a “ Revolving Note ” ), payable to such Lender and representing the obligation of such Borrower to pay the amount of the Commitment of such Lender or, if less, the aggregate unpaid principal amount of all Revolving Credit Loans made by such Lender to such Borrower. Each Note shall ( i ) be dated the Closing Date (or, in the case of an assignment pursuant to subsection 11.6(b) , as of the date of such assignment), ( ii ) be stated to mature on the Maturity Date and ( iii ) provide for the payment of interest in accordance with subsection 4.1 .
(i) Notwithstanding anything to the contrary contained herein, the parties acknowledge and agree that the Canadian Borrower shall not be jointly or jointly and severally liable with the U.S. Borrowers for any liabilities or obligations of the U.S. Borrowers hereunder.
2.2 Procedure for Revolving Credit Borrowing . Each of the Borrowers may borrow under the Commitments during the Commitment Period on any Business Day, provided that the
 
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Borrower Representative shall give the Administrative Agent irrevocable (in the case of any notice except notice with respect to the initial Extension of Credit hereunder, which shall be irrevocable after the funding) notice in substantially the form of Exhibit F-1 or in such other form as may be agreed between the Borrower Representative and the Administrative Agent (each, a “ Borrowing Request ”) (which notice must be received by the Administrative Agent prior to ( a ) 11:00 A.M., New York City time, at least three Business Days prior to the requested Borrowing Date, if all or any part of the requested Revolving Credit Loans are to be initially Eurocurrency Loans or BA Equivalent Loans or ( b ) 11:00 A.M., New York City time, on the requested Borrowing Date, for ABR Loans (or in the case of the initial borrowing hereunder, in each case, 10:00 A.M. one Business Day prior to the date of the initial borrowing hereunder)) specifying ( i ) the identity of a Borrower, ( ii ) the amount to be borrowed, ( iii ) the requested Borrowing Date, ( iv ) whether the borrowing is to be of Eurocurrency Loans or BA Equivalent Loans, ABR Loans or a combination thereof, ( v ) in the case of the Canadian Facility Revolving Credit Loans, if the borrowing is to be entirely or partly of ABR Loans, whether such Loans shall be denominated in Canadian Dollars or Dollars and ( vi ) if the borrowing is to be entirely or partly of Eurocurrency Loans or BA Equivalent Loans, the respective amounts of each such Type of Loan, the respective lengths of the initial Interest Periods therefor. Each borrowing shall be in an amount equal to ( x ) in the case of ABR Loans, except any ABR Loan to be used solely to pay a like amount of outstanding Reimbursement Obligations or Swing Line Loans, in multiples of $1,000,000.00 (or, in the case of Loans denominated in Canadian Dollars, Cdn$1,000,000.00) (or, if the Commitments then available (as calculated in accordance with subsections 2.1(a) and 2.1(b) ) are less than $1,000,000.00 or Cdn$1,000,000.00, respectively, such lesser amount) and ( y ) in the case of Eurocurrency Loans or BA Equivalent Loans, an amount equal to $5,000,000.00 (or, in the case of Loans denominated in Canadian Dollars, Cdn$5,000,000.00) or a whole multiple of $1,000,000.00 (or, in the case of Loans denominated in Canadian Dollars, Cdn$1,000,000.00) in excess thereof. Upon receipt of any such notice from the Borrower Representative, the Administrative Agent shall promptly notify each applicable Revolving Lender thereof. Subject to the satisfaction of the conditions precedent specified in subsection 6.2 , each applicable Revolving Lender will make the amount of its pro rata share of each borrowing of Revolving Credit Loans available to the Administrative Agent for the account of the Borrower identified in such notice at the office of the Administrative Agent specified in subsection 11.2 prior to 3:00 P.M. (or 10:00 A.M., in the case of the initial borrowing hereunder), New York City time, or at such other office of the Administrative Agent or at such other time as to which the Administrative Agent shall notify such Borrower Representative reasonably in advance of the Borrowing Date with respect thereto, on the Borrowing Date requested by such Borrower in Dollars or Canadian Dollars and in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Canadian Borrower by the Administrative Agent, crediting the account of such Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.
2.3 Termination or Reduction of Commitments .
(a) The Borrower Representative (on behalf of any Borrower) shall have the right, upon not less than one Business Day’s notice to the Administrative Agent (which will promptly notify the Lenders thereof), to terminate the Tranche A U.S. Facility Commitments or the Tranche A Canadian Facility Commitments, respectively, or, from
 
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time to time, to reduce the amount of the Tranche A U.S. Facility Commitments or Tranche A Canadian Facility Commitments, respectively; provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Credit Loans and Swing Line Loans made on the effective date thereof, the Aggregate Tranche A U.S. Facility Lender Exposure or the Aggregate Tranche A Canadian Facility Lender Exposure, as the case may be, would exceed the applicable Commitments then in effect. Any such reduction shall be in an amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and shall reduce permanently the applicable Commitments then in effect.
(b) The Borrower Representative (on behalf of any Borrower) shall have the right, upon not less than one Business Day’s notice to the Administrative Agent (which will promptly notify the Lenders thereof), to terminate the Tranche A-1 U.S. Facility Commitments or the Tranche A-1 Canadian Facility Commitments, respectively, or, from time to time, to reduce the amount of the Tranche A-1 U.S. Facility Commitments or Tranche A-1 Canadian Facility Commitments, respectively, and, notwithstanding anything in this Agreement to the contrary, in connection with such termination or reduction, to prepay the Tranche A-1 U.S. Facility Revolving Credit Loans and the Tranche A-1 Canadian Facility Revolving Credit Loans without first repaying the Tranche A U.S. Facility Revolving Credit Loans and the Tranche A Canadian Facility Revolving Credit Loans; provided that ( x ) no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Credit Loans made on the effective date thereof, the Aggregate Tranche A-1 Canadian Facility Lender Exposure or the Aggregate Tranche A-1 U.S. Facility Lender Exposure, as the case may be, would exceed the applicable Commitments then in effect and ( y ) after giving pro forma effect to such termination or reduction and prepayment and any reallocation pursuant to clause (c) of this subsection 2.3 , the Payment Condition is satisfied. Any such reduction shall be in an amount equal to $[ — ] or a whole multiple of $[ — ] in excess thereof and shall, except as provided in clause (c) of this subsection 2.3 , reduce permanently the applicable Commitments then in effect.
(c) (i) At the time of any termination or reduction of the Tranche A-1 U.S. Facility Commitments or the Tranche A-1 Canadian Facility Commitments as set forth in clause (b) of this subsection 2.3 , but without duplication of any increase permitted pursuant to subsection 2.6 , the Tranche A-1 U.S. Facility Commitments or the Tranche A-1 Canadian Facility Commitments so terminated or reduced may be added, in whole or in part, at the Parent Borrower’s option, to the then outstanding Tranche A U.S. Facility Commitments or Tranche A Canadian Facility Commitments, as applicable, in the manner set forth in clause (ii) below.
(ii) ( x ) In the case of Lenders that, as of immediately prior to any such termination or reduction, have (within the same branch and affiliate, as applicable) both Tranche A U.S. Facility Commitments and Tranche A-1 U.S. Facility Commitments and/or both Tranche A Canadian Facility Commitments and Tranche A-1 Canadian Facility Commitments, the Tranche A U.S. Facility Commitments or Tranche A Canadian Facility Commitments, as applicable, of such Lenders whose Tranche A-1 U.S. Facility Commitments or Tranche A-1 Canadian Facility Commitments are being so terminated or reduced
 
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shall be automatically increased by the amount so terminated or reduced, and ( y ) in the case of any Tranche A-1 U.S. Facility Commitments or Tranche A-1 Canadian Facility Commitments being so terminated or reduced that are not automatically reallocated pursuant to the immediately preceding clause (x), the Parent Borrower may seek to obtain like amounts of such Commitments in the form of Tranche A U.S. Facility Commitments or Tranche A Canadian Facility Commitments, as applicable, from existing Lenders or any other Persons; provided , however , that ( 1 ) no Lender shall be obligated to provide any such Commitments as a result of any such request by the Parent Borrower, and ( 2 ) any Additional Lender which is not an existing Lender shall be subject to the approval of the Administrative Agent, the Swing Line Lender, each Issuing Lender and the Borrowers (each such approval not to be unreasonably withheld).
(d) (i) At the time of any termination or reduction of the Tranche A Canadian Facility Commitments as set forth in clause (a) of this subsection 2.3 , but without duplication of any increase permitted pursuant to subsection 2.6 , the Tranche A Canadian Facility Commitments so terminated or reduced may be added, in whole or in part, at the Parent Borrower’s option, to the then outstanding Tranche A U.S. Facility Commitments, in the manner set forth in clause (ii) below.
(ii) ( x ) In the case of Tranche A Canadian Facility Lenders that, as of immediately prior to any such termination or reduction, have (within the same branch and affiliate, as applicable) both Tranche A Canadian Facility Commitments and Tranche A U.S. Facility Commitments, the Tranche A U.S. Facility Commitments of such Tranche A Canadian Facility Lenders whose Tranche A Canadian Facility Commitments are being so terminated or reduced shall be automatically increased by the amount so terminated or reduced, and ( y ) in the case of Tranche A Canadian Facility Lenders that, as of immediately prior to any such termination or reduction, do not have Tranche A U.S. Facility Commitments, the Parent Borrower may seek to obtain like amounts of such Commitments in the form of Tranche A U.S. Facility Commitments from existing Lenders or any other Persons; provided , however , that ( 1 ) no Lender shall be obligated to provide any such Commitments as a result of any such request by the Parent Borrower, and ( 2 ) any Additional Lender which is not an existing Lender shall be subject to the approval of the Administrative Agent, the Swing Line Lender, each Issuing Lender and the Borrowers (each such approval not to be unreasonably withheld).
(e) (i) At the time of any termination or reduction of the Tranche A U.S. Facility Commitments as set forth in clause (a) of this subsection 2.3 , but without duplication of any increase permitted pursuant to subsection 2.6 , the Tranche A U.S. Facility Commitments so terminated or reduced may be added, in whole or in part, at the Parent Borrower’s option, to the then outstanding Tranche A Canadian Facility Commitments, in the manner set forth in clause (ii) below; provided , that no increase to the Tranche A Canadian Facility Commitments pursuant to this clause (e) shall result in the Canadian Facility Commitments exceeding 35% of the aggregate Commitments.
 
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(ii) ( x ) In the case of Tranche A U.S. Facility Lenders that, as of immediately prior to any such termination or reduction, have (within the same branch and affiliate, as applicable) both Tranche A U.S. Facility Commitments and Tranche A Canadian Facility Commitments, the Tranche A Canadian Facility Commitments of such Tranche A U.S. Facility Lenders whose Tranche A U.S. Facility Commitments are being so terminated or reduced shall be automatically increased by the amount so terminated or reduced, and ( y ) in the case of any Tranche A U.S. Facility Commitments being so terminated or reduced that are not automatically reallocated pursuant to the immediately preceding clause (x), the Parent Borrower may seek to obtain like amounts of such Commitments in the form of Tranche A Canadian Facility Commitments from existing Canadian Facility Lenders or any other Persons; provided , however , that ( 1 ) no Canadian Facility Lender shall be obligated to provide any such Commitments as a result of any such request by the Parent Borrower, and ( 2 ) any Additional Lender which is not an existing Canadian Facility Lender shall be subject to the approval of the Administrative Agent, each Canadian Facility Issuing Lender and the Borrowers (each such approval not to be unreasonably withheld).
(f) Any notice of termination delivered by the Borrower Representative pursuant to clauses (a) or (b) of this subsection 2.3 may state that such notice is conditioned upon the occurrence or non-occurrence of any event specified therein (including the effectiveness of other credit facilities), in which case, subject to subsection 4.12 , such notice may be revoked by the Borrower Representative (by written notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.
(g) No more than one reallocation of Commitments pursuant to clause (c), (d) or (e) of this subsection 2.3 may be effected in any fiscal quarter.
(h) All outstanding Commitments shall terminate on the Maturity Date.
2.4 Swing Line Commitments .
(a) Subject to the terms and conditions hereof, the Swing Line Lender agrees to make swing line loans (individually, a “ Swing Line Loan ”; collectively, the “ Swing Line Loans ”) to any U.S. Borrower from time to time during the Commitment Period in an aggregate principal amount at any one time outstanding not to exceed $75,000,000; provided that the Swing Line Lender shall not make any Swing Line Loans if, after doing so, the Aggregate Tranche A U.S. Facility Lender Exposure would exceed the Aggregate Tranche A U.S. Facility Commitment or the Aggregate Tranche A U.S. Borrower Credit Extensions would exceed the applicable limitation set forth in subsection 2.1(a)(i)(B) . Amounts borrowed by any U.S. Borrower under this subsection 2.4 may be repaid and, through but excluding the Maturity Date, reborrowed. All Swing Line Loans made to any U.S. Borrower shall be made in Dollars as ABR Loans and shall not be entitled to be converted into Eurocurrency Loans. The Borrower Representative (on behalf of any U.S. Borrower) shall give the Swing Line Lender irrevocable notice (which notice must be received by the Swing Line Lender prior to 3:00 P.M., New York City time) on the
 
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requested Borrowing Date specifying ( 1 ) the identity of the U.S. Borrower and ( 2 ) the amount of the requested Swing Line Loan, which shall be in a minimum amount of $100,000.00 or whole multiples of $50,000.00 in excess thereof. The proceeds of the Swing Line Loan will be made available by the Swing Line Lender to the U.S. Borrower identified in such notice at an office of the Swing Line Lender by wire transfer to the account of such U.S. Borrower specified in such notice.
(b) Each of the U.S. Borrowers agrees that, upon the request to the Administrative Agent by the Swing Line Lender made on or prior to the Closing Date or in connection with any assignment pursuant to subsection 11.6(b) , in order to evidence the Swing Line Loans such Borrower will execute and deliver to the Swing Line Lender a promissory note substantially in the form of Exhibit I-2 , with appropriate insertions (as the same may be amended, supplemented, replaced or otherwise modified from time to time, the “ Swing Line Note ”), payable to the Swing Line Lender and representing the obligation of such Borrower to pay the amount of the Swing Line Commitment or, if less, the unpaid principal amount of the Swing Line Loans made to such Borrower, with interest thereon as prescribed in subsection 4.1 . The Swing Line Note shall ( i ) be dated the Closing Date, ( ii ) be stated to mature on the Maturity Date and ( iii ) provide for the payment of interest in accordance with subsection 4.1 .
(c) The Swing Line Lender, at any time in its sole and absolute discretion, may, and, at any time as there shall be a Swing Line Loan outstanding for more than five Business Days, the Swing Line Lender shall, on behalf of the Borrower to which the Swing Line Loan has been made (which hereby irrevocably directs and authorizes the Swing Line Lender to act on its behalf), request ( provided that such request shall be deemed to have been automatically made upon the occurrence of an Event of Default under subsection 9(f) ) each Tranche A U.S. Facility Lender, including the Swing Line Lender, to make a Tranche A U.S. Facility Revolving Credit Loan as an ABR Loan (a “ Mandatory Revolving Loan Borrowing ”) in an amount equal to such Tranche A U.S. Facility Lender’s Tranche A U.S. Facility Commitment Percentage of the principal amount of all of the Swing Line Loans (collectively, the “ Refunded Swing Line Loans ”) outstanding on the date such notice is given; provided that the provisions of this subsection 2.4(c) shall not affect the obligations of any U.S. Borrower to prepay Swing Line Loans in accordance with the provisions of subsection 4.4(b) . Unless the Tranche A U.S. Facility Commitments shall have expired or terminated (in which event the procedures of paragraph (d) of this subsection 2.4 shall apply), each Tranche A U.S. Facility Lender hereby agrees to make the proceeds of its Tranche A U.S. Facility Revolving Credit Loan (including any Eurocurrency Loan) available to the Administrative Agent for the account of the Swing Line Lender at the office of the Administrative Agent prior to 12:00 Noon, New York City time, in funds immediately available on the Business Day next succeeding the date such notice is given notwithstanding ( i ) that the amount of the Mandatory Revolving Loan Borrowing may not comply with the minimum amount for Revolving Credit Loans otherwise required hereunder, ( ii ) whether any conditions specified in Section 6 are then satisfied, ( iii ) whether a Default or an Event of Default then exists, ( iv ) the date of such Mandatory Revolving Loan Borrowing and ( v ) the amount of the Tranche A U.S. Facility Commitment of such, or any other, Tranche A U.S. Facility Lender at such time. The
 
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proceeds of such Tranche A U.S. Facility Revolving Credit Loans (including, any Eurocurrency Loan) shall be immediately applied to repay the Refunded Swing Line Loans.
(d) If the Tranche A U.S. Facility Commitments shall expire or terminate at any time while Swing Line Loans are outstanding, each Tranche A U.S. Facility Lender shall, at the option of the Swing Line Lender, exercised reasonably, either ( i ) notwithstanding the expiration or termination of the Tranche A U.S. Facility Commitments, make a Tranche A U.S. Facility Revolving Credit Loan as an ABR Loan (which Tranche A U.S. Facility Revolving Credit Loan shall be deemed a “Tranche A U.S. Facility Revolving Credit Loan” for all purposes of this Agreement and the other Loan Documents) or ( ii ) purchase an undivided participating interest in such Swing Line Loans, in either case in an amount equal to such Tranche A U.S. Facility Lender’s Tranche A U.S. Facility Commitment Percentage determined on the date of, and immediately prior to, expiration or termination of the Tranche A U.S. Facility Commitments of the aggregate principal amount of such Swing Line Loans; provided that, in the event that any Mandatory Revolving Loan Borrowing cannot for any reason be made on the date otherwise required above (including, as a result of the commencement of a proceeding under any bankruptcy, reorganization, dissolution, insolvency, receivership, administration or liquidation or similar law with respect to any Borrower), then each Tranche A U.S. Facility Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Revolving Loan Borrowing would otherwise have occurred, but adjusted for any payments received from such Borrower on or after such date and prior to such purchase) from the Swing Line Lender such participations in such outstanding Swing Line Loans as shall be necessary to cause such Tranche A U.S. Facility Lenders to share in such Swing Line Loans ratably based upon their respective Tranche A U.S. Facility Commitment Percentages; provided , further , that ( x ) all interest payable on the Swing Line Loans shall be for the account of the Swing Line Lender until the date as of which the respective participation is required to be purchased and, to the extent attributable to the purchased participation, shall be payable to the participant from and after such date and ( y ) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing Tranche A U.S. Facility Lender shall be required to pay the Swing Line Lender interest on the principal amount of the participation purchased for each day from and including the day upon which the Mandatory Revolving Loan Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the rate otherwise applicable to Tranche A U.S. Facility Revolving Credit Loans made as ABR Loans. In the event that the Tranche A U.S. Facility Commitments shall expire or terminate in part (and not in full) at any time while Swing Line Loans are outstanding, the applicable Borrower shall repay Swing Line Loans in the amount by which the outstanding Swing Line Loans exceed the continuing Tranche A U.S. Facility Commitments; and in the event that such Borrower fails to do so, the obligations of each Tranche A U.S. Facility Lender pursuant to the prior sentence shall apply with respect to such Lender’s Tranche A U.S. Facility Commitment Percentage (calculated immediately prior to such expiration or termination) of the amount by which the outstanding Swing Line Loans in excess of the continuing Tranche A U.S. Facility Commitments not so repaid. Each Tranche A U.S. Facility Lender will make the proceeds of any Tranche A U.S. Facility Revolving Credit Loan
 
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made pursuant to the immediately preceding sentence available to the Administrative Agent for the account of the Swing Line Lender at the office of the Administrative Agent prior to 12:00 Noon, New York City time, in funds immediately available on the Business Day next succeeding the date on which the Tranche A U.S. Facility Commitments expire or terminate and in the currency in which such Swing Line Loans were made. The proceeds of such Tranche A U.S. Facility Revolving Credit Loans shall be immediately applied to repay the Swing Line Loans outstanding on the date of termination or expiration of the Tranche A U.S. Facility Commitments. In the event that the Tranche A U.S. Facility Lenders purchase undivided participating interests pursuant to the first sentence of this paragraph (d), each Tranche A U.S. Facility Lender shall immediately transfer to the Swing Line Lender, in immediately available funds and in the currency in which such Swing Line Loans were made, the amount of its participation and upon receipt thereof the Swing Line Lender will deliver to such Tranche A U.S. Facility Lender a Swing Line Loan Participation Certificate dated the date of receipt of such funds and in such amount.
(e) Whenever, at any time after the Swing Line Lender has received from any Tranche A U.S. Facility Lender such Tranche A U.S. Facility Lender’s participating interest in a Swing Line Loan, the Swing Line Lender receives any payment on account thereof (whether directly from any Borrower in respect of such Swing Line Loan or otherwise, including proceeds of Collateral applied thereto by the Swing Line Lender), or any payment of interest on account thereof, the Swing Line Lender will, if such payment is received prior to 1:00 P.M., New York City time, on a Business Day, distribute to such Tranche A U.S. Facility Lender its pro rata share thereof prior to the end of such Business Day and otherwise, the Swing Line Lender will distribute such payment on the next succeeding Business Day (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Tranche A U.S. Facility Lender’s participating interest was outstanding and funded); provided , however , that in the event that such payment received by the Swing Line Lender is required to be returned, such Lender will return to the Swing Line Lender any portion thereof previously distributed by the Swing Line Lender to it.
(f) Each Tranche A U.S. Facility Lender’s obligation to make the Tranche A U.S. Facility Revolving Credit Loans and to purchase participating interests with respect to Swing Line Loans in accordance with subsections 2.4(c) and 2.4(d) shall be absolute and unconditional and shall not be affected by any circumstance, including ( i ) any set-off, counterclaim, recoupment, defense or other right that such Tranche A U.S. Facility Lender or any of the Borrowers may have against the Swing Line Lender, any of the Borrowers or any other Person for any reason whatsoever; ( ii ) the occurrence or continuance of a Default or an Event of Default; ( iii ) any adverse change in condition (financial or otherwise) of any of the Borrowers; ( iv ) any breach of this Agreement or any other Loan Document by any of the Borrowers, any other Loan Party or any other Tranche A U.S. Facility Lender; ( v ) any inability of any of the Borrowers to satisfy the conditions precedent to borrowing set forth in this Agreement on the date upon which such Tranche A U.S. Facility Revolving Credit Loan is to be made or participating interest is to be purchased or ( vi ) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.
 
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2.5 Record of Loans .
(a) Each U.S. Borrower hereby unconditionally promises to pay to the Administrative Agent (in the currency in which such Loan is denominated) for the account of: ( i ) each U.S. Facility Lender the then unpaid principal amount of each Revolving Credit Loan of such Lender made to such Borrower, on the Maturity Date (or such earlier date on which the Revolving Credit Loans become due and payable pursuant to Section 9 ); ( ii ) each Canadian Facility Lender the then unpaid principal amount of each Revolving Credit Loan of such Lender made to such Borrower, on the Maturity Date (or such earlier date on which the Revolving Credit Loans become due and payable pursuant to Section 9 ); ( iii ) the Administrative Agent, the then unpaid and principal amount of each Agent Advance made to such Borrower on the Maturity Date (or such earlier date on which the Agent Advances become due and payable pursuant to Section 9 ) and ( iv ) the Swing Line Lender, the then unpaid principal amount of the Swing Line Loans made to such Borrower, on the Maturity Date (or such earlier date on which the Swing Line Loans become due and payable pursuant to Section 9 ). Each U.S. Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans made to such Borrower from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in subsection 4.1 .
(b) The Canadian Borrower hereby unconditionally promises to pay to the Administrative Agent (in the currency in which such Loan is denominated) for the account of each Canadian Facility Lender, the then unpaid principal amount of each Canadian Facility Revolving Credit Loan of such Lender made to the Canadian Borrower, on the Maturity Date (or such earlier date on which the Canadian Facility Revolving Credit Loans became due and payable pursuant to Section 9 ). The Canadian Borrower hereby further agrees to pay interest (which payments shall be in the same currency in which the respective Loan referred to above is denominated) on the unpaid principal amount of such Loans from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in subsection 4.1 .
(c) Each Lender (including the Swing Line Lender) shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of each of the Borrowers to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register pursuant to subsection 11.6(b) , and a subaccount therein for each Lender, in which shall be recorded ( i ) the amount of each Loan made hereunder, the Type thereof, and each Interest Period, if any, applicable thereto and whether such Loans are Tranche A U.S. Facility Revolving Credit Loans, Tranche A-1 U.S. Facility Revolving Credit Loans, Tranche A Canadian Facility Revolving Credit Loans, Tranche A-1 Canadian Facility Revolving Credit Loans or Swing Line Loans, ( ii ) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder and ( iii ) both the amount of any sum received by the Administrative Agent hereunder from each Borrower and each Lender’s share thereof.
(e) The entries made in the Register and the accounts of each Lender maintained pursuant to subsection 2.5(c) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of each Borrower therein recorded; provided , however , that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of any Borrower to repay (with applicable interest) the Loans made to such Borrower by such Lender in accordance with the terms of this Agreement.
 
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2.6 Incremental Facility .
(a) So long as no Specified Default exists or would arise therefrom, the Borrowers shall have the right, at any time and from time to time after the Closing Date, to request (i) an increase of the aggregate amount of the then outstanding Commitments (the “ Incremental Revolving Commitments ”), (ii) commitments under a new revolving facility in favor of the Borrowers or any of their Restricted Subsidiaries, consisting of either (A) a FILO Tranche to be included in this Agreement or (B) revolving commitments extended to a Subsidiary that is not a Domestic Subsidiary or a Canadian Subsidiary (the “ New Revolving Commitments ”) or (iii) one or more term loans (the “ Incremental ABL Term Loans ” and together with the Incremental Revolving Commitments and the New Revolving Commitments, collectively, the “ Incremental Facilities ” and each, an “ Incremental Facility ”). Any request under this subsection 2.6 shall specify (x) in the case of a request for Incremental Revolving Commitments, whether the Tranche A Canadian Facility Commitments, the Tranche A-1 Canadian Facility Commitments, the Tranche A U.S. Facility Commitments or the Tranche A-1 U.S. Facility Commitments (or a combination of the above) are requested to be increased, (y) in the case of a request for New Revolving Commitments, the identity of the borrower thereunder, and whether such New Revolving Commitments will consist of a FILO Tranche or revolving commitments extended to a Subsidiary that is not a Domestic Subsidiary or a Canadian Subsidiary and (z) in the case of a request for Incremental ABL Term Loans, whether such loans will count as Aggregate Tranche A Canadian Borrower Credit Extensions, Aggregate Tranche A-1 Canadian Borrower Credit Extensions, Aggregate Tranche A U.S. Borrower Credit Extensions or Aggregate Tranche A-1 U.S. Borrower Credit Extensions (or a combination of the above). Notwithstanding anything to the contrary herein, after giving effect to any new Incremental Facility, the aggregate principal amount of any Incremental ABL Term Loans, New Revolving Commitments or Incremental Revolving Commitments shall not exceed the Available Incremental Amount at such time, and the aggregate principal amount of the Facilities plus (without duplication) the aggregate outstanding amount of all Incremental Facilities shall not exceed $1,800,000,000 at such time. The Parent Borrower may seek to obtain Incremental Revolving Commitments, New Revolving Commitments or Incremental ABL Term Loans from existing Lenders or any other Persons, as applicable (each an “ Incremental Facility Increase ,” and each Person extending, or Lender extending, Incremental Revolving Commitments or Incremental ABL Term Loans, an “ Additional
 
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Lender ”), provided , however , that (i) no Lender shall be obligated to provide an Incremental Facility Increase as a result of any such request by the Borrowers, and (ii) any Additional Lender which is not an existing Lender shall be subject to the approval of the Administrative Agent, the Swing Line Lender, each Issuing Lender and the Borrowers (each such approval not to be unreasonably withheld).
(b) Any Incremental ABL Term Loans ( A ) (unless such Incremental ABL Term Loans are extended to a Subsidiary that is not a Domestic Subsidiary or a Canadian Subsidiary) may not be guaranteed by any Subsidiaries of the Parent Borrower other than the Guarantors and shall rank pari passu (or, at the option of the Parent Borrower (but subject to the class protection set forth in subsection 11.1(a)(xii) ), junior) in right of (x) priority with respect to the Collateral and (y) payment with respect to the Obligations in respect of the corresponding Tranche A Canadian Facility Commitments, Tranche A-1 Canadian Facility Commitments, Tranche A U.S. Facility Commitments or Tranche A-1 U.S. Facility Commitments and any corresponding existing Incremental ABL Term Loans, ( B ) shall count against the Borrowing Base, ( C ) shall not have a final maturity that is earlier than the Maturity Date (or, if later, the latest final maturity of any Extended Loans or any then-existing Incremental Facility), ( D ) shall not amortize at a rate greater than 2.5% per annum, ( E ) may not be secured by any Collateral or other assets of any Loan Party that do not also secure the Loans and ( F ) shall otherwise be on terms as are reasonably satisfactory to the Administrative Agent. Any Incremental ABL Term Loans extended to a Subsidiary that is not a Domestic Subsidiary or a Canadian Subsidiary ( A ) shall have pricing to be agreed upon (which, for the avoidance of doubt, shall not require any adjustment to the Applicable Margin of other Loans) among the Parent Borrower and the Lenders providing such Incremental ABL Term Loans, ( B ) shall be subject to such collateral and guaranty arrangements as may be agreed among the Parent Borrower and the Lenders providing such Incremental ABL Term Loans, and are reasonably satisfactory to the Administrative Agent (but may not be guaranteed by any Guarantors or secured by any Collateral), ( C ) shall be subject to such borrowing base arrangements as may be agreed among the Parent Borrower and the Lenders providing such Incremental ABL Term Loans, and are reasonably satisfactory to the Administrative Agent, ( D ) shall be in such jurisdictions and currencies as may be agreed among the Parent Borrower and the Lenders providing such Incremental ABL Term Loans, and are reasonably satisfactory to the Administrative Agent, ( E ) shall not amortize at a rate greater than 2.5% per annum and ( F ) shall otherwise be on terms as may be agreed among the Parent Borrower and the Lenders providing such Incremental ABL Term Loans.
(c) Any Incremental Revolving Commitments ( A ) shall be guaranteed by the Guarantors and shall rank pari passu in right of ( x ) priority with respect to the Collateral and ( y ) payment with respect to the Obligations in respect of the corresponding Tranche A Canadian Facility Commitments, Tranche A-1 Canadian Facility Commitments, Tranche A U.S. Facility Commitments or Tranche A-1 U.S. Facility Commitments in effect prior to the Incremental Revolving Commitment Effective Date, ( B ) may not be secured by any Collateral or other assets of any Loan Party that do not also secure the Loans, ( C ) may provide for commitment, arrangement, upfront or similar fees that may be agreed among the Parent Borrower and the Lenders providing such Incremental
 
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Revolving Commitments and ( D ) shall otherwise be on terms and pursuant to the documentation applicable to the existing Commitments; provided that the Applicable Margin relating to the Incremental Revolving Commitments may exceed the Applicable Margin relating to the Commitments in effect prior to the Incremental Revolving Commitment Effective Date so long as the Applicable Margins relating to all Revolving Credit Loans shall be adjusted to be equal to not more than 25 basis points less than the Applicable Margin payable to the Lenders providing such Incremental Revolving Commitments.
(d)
(i) Unless such New Revolving Commitments are extended to a Subsidiary that is not a Domestic Subsidiary or a Canadian Subsidiary, any New Revolving Commitments ( A ) shall be guaranteed by the Guarantors and shall rank pari passu in right of priority with respect to the Collateral, ( B ) may not be guaranteed by any Subsidiaries of the Parent Borrower other than the Guarantors, or secured by any Collateral or other assets of any Loan Party that do not also secure the Loans, ( C ) shall be in the form of a FILO Tranche and ( D ) shall otherwise be on terms as agreed upon among the Parent Borrower and the Lenders providing the New Revolving Commitment, which terms shall be reasonably satisfactory to the Administrative Agent. Any New Revolving Commitments extended to a Subsidiary that is not a Domestic Subsidiary or a Canadian Subsidiary ( A ) shall have pricing to be agreed upon (which, for the avoidance of doubt, shall not require any adjustment to the Applicable Margin of other Loans) among the Parent Borrower and the Lenders providing such New Revolving Commitments, ( B ) shall be subject to such collateral and guaranty arrangements as may be agreed among the Parent Borrower and the Lenders providing such New Revolving Commitments, and are reasonably satisfactory to the Administrative Agent (but may not be guaranteed by any Guarantors or secured by any Collateral), ( C ) shall be subject to such borrowing base arrangements as may be agreed among the Parent Borrower and the Lenders providing such New Revolving Commitments, and are reasonably satisfactory to the Administrative Agent, ( D ) shall be in such jurisdictions and currencies as may be agreed among the Parent Borrower and the Lenders providing such New Revolving Commitments, and are reasonably satisfactory to the Administrative Agent and ( E ) shall otherwise be on terms as may be agreed among the Parent Borrower and the Lenders providing such New Revolving Commitments.
(ii) Any Incremental Facilities consisting of New Revolving Commitments extended to a Subsidiary that is a Domestic Subsidiary or a Canadian Subsidiary shall, and any Incremental ABL Term Loans (unless extended to a Subsidiary that is not a Domestic Subsidiary or a Canadian Subsidiary) may, be in the form of a separate “first-in, last out” tranche (the “ FILO Tranche ”) with a separate borrowing base against the ABL Priority Collateral and interest rate margins in each case to be agreed upon (which, for the avoidance of doubt, shall not require any adjustment to the Applicable Margin of other Loans pursuant to clause (i) above) among the Parent Borrower, the
 
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Administrative Agent and the Lenders providing the FILO Tranche so long as ( 1 ) any loans under the FILO Tranche may not be guaranteed by any Subsidiaries of the Parent Borrower other than the Guarantors, or secured by any Collateral or other assets of any Loan Party that do not also secure the Loans; ( 2 ) if the FILO Tranche availability exceeds $0, any Extension of Credit under the Facility thereafter requested shall be made under the FILO Tranche until the FILO Tranche availability no longer exceeds $0; ( 3 ) as between ( x ) the Facility (other than the FILO Tranche) and the Incremental ABL Term Loans, on the one hand and ( y ) the FILO Tranche, on the other hand, all proceeds from the liquidation or other realization of the Collateral (including ABL Priority Collateral) shall be applied, first to obligations owing under, or with respect to, the Facility (other than the FILO Tranche) and the Incremental ABL Term Loans (unless extended to a Subsidiary that is not a Domestic Subsidiary or a Canadian Subsidiary) and second to the FILO Tranche; ( 4 ) no Borrower may prepay Revolving Credit Loans under the FILO Tranche or terminate or reduce the commitments in respect thereof at any time that other Loans and/or Reimbursement Obligations (unless cash collateralized or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent) or Incremental ABL Term Loans (unless extended to a Subsidiary that is not a Domestic Subsidiary or a Canadian Subsidiary) are outstanding; ( 5 ) the Required Lenders (calculated as including Lenders under any Incremental Facilities that rank pari passu with the existing Commitments) shall, subject to the terms of the Base Intercreditor Agreement, control exercise of remedies in respect of the Collateral and ( 6 ) no changes affecting the priority status of the Facility (other than the FILO Tranche) or the Incremental ABL Term Loans, on the one hand, vis-à-vis the FILO Tranche, on the other hand, may be made without the consent of the Supermajority Lenders (calculated as including Lenders under any Incremental Facility that ranks pari passu with the existing Commitments) under the Facility (and such other Lenders who consent may be required under subsection 11.1(b)(xii) ), other than such changes which affect only the FILO Tranche, or only the Incremental ABL Term Loans, as the case may be.
(e) No Incremental Facility Increase shall become effective unless and until each of the following conditions has been satisfied:
(i) The Borrowers, the Administrative Agent, and any Additional Lender shall have executed and delivered a joinder to the Loan Documents (“ Lender Joinder Agreement ”) in substantially the form of Exhibit O ;
(ii) The Borrowers shall have paid such fees and other compensation to the Additional Lenders and to the Administrative Agent as the applicable Borrowers, the Administrative Agent and such Additional Lenders shall agree;
(iii) The applicable Borrowers shall deliver to the Administrative Agent and the Lenders an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent from counsel to the applicable Borrowers and dated such date;
 
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(iv) A Revolving Note (to the extent requested) will be issued at the applicable Borrowers’ expense, to each such Additional Lender, to be in conformity with requirements of subsection 2.1(h) (with appropriate modification) to the extent necessary to reflect the new Commitment of each Additional Lender;
(v) The Parent Borrower shall deliver on the Incremental Facility Closing Date a certificate certifying that ( A ) (other than with respect to an Incremental Facility Increase in connection with a Permitted Acquisition permitted hereunder or any other Investment not prohibited by the terms of this Agreement, unless required by the Lenders providing such Incremental Facility Increase) the representations and warranties made by the Parent Borrower and its Restricted Subsidiaries contained herein and in the other Loan Documents are true and correct in all material respects on and as of the Incremental Facility Closing Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and ( B ) no Specified Default has occurred and is continuing; and
(vi) The applicable Borrowers and Additional Lenders shall have delivered such other instruments, documents and agreements as the Administrative Agent may reasonably have requested in order to effectuate the documentation of the foregoing.
(f) (i) In the case of any Incremental Facility Increase constituting Incremental Revolving Commitments, the Administrative Agent shall promptly notify each Lender as to the effectiveness of such Incremental Facility Increase (with each date of such effectiveness being referred to herein as an “ Incremental Revolving Commitment Effective Date ”), and at such time ( i ) the Tranche A U.S. Facility Commitments, the Tranche A-1 U.S. Facility Commitments, the Tranche A Canadian Facility Commitments and the Tranche A-1 Canadian Facility Commitments, as applicable, under, and for all purposes of, this Agreement shall be increased by the aggregate amount of such Incremental Revolving Commitments, ( ii )  Schedule A shall be deemed modified, without further action, to reflect the revised Commitments and Commitment Percentages of the Lenders and ( iii ) this Agreement shall be deemed amended, without further action, to the extent necessary to reflect any such Incremental Revolving Commitments.
(ii) In the case of any Incremental Facility Increase, the Administrative Agent, the Additional Lenders and the Borrowers agree to enter into any amendment required to incorporate the addition of the Incremental Revolving Commitments, the New Revolving Commitments and the Incremental ABL Term Loans, the pricing of the Incremental Revolving Commitments, the New Revolving Commitments and the Incremental ABL Term Loans, the maturity date of the Incremental Revolving Commitments, the New Revolving Commitments and the Incremental ABL Term Loans and such other amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrowers in connection therewith, including amendments to provide for the inclusion, as appropriate, of Additional Lenders in any required vote or action
 
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of the Required Lenders, the Supermajority Lenders or of the Lenders of each Facility hereunder and may provide class protection for any additional credit facilities in a manner consistent with those provided the original Facilities pursuant to the provisions of subsection 11.1(a) as originally in effect (each an “ Incremental Commitment Amendment ”). The Lenders hereby irrevocably authorize the Administrative Agent to enter into such amendments.
(g) In connection with the Incremental Facility Increases hereunder, the Lenders and the Borrowers agree that, notwithstanding anything to the contrary in this Agreement, ( i ) the applicable Borrowers shall, in coordination with the Administrative Agent, ( x ) repay applicable outstanding Revolving Credit Loans of certain Lenders, and obtain applicable Revolving Credit Loans from certain other Lenders (including the Additional Lenders), or ( y ) take such other actions as reasonably may be required by the Administrative Agent to the extent necessary so that the Lenders effectively participate in each of the outstanding Loans, as applicable, pro rata on the basis of their respective Commitment Percentages (determined after giving effect to any increase in the applicable Commitments pursuant to this subsection 2.6 ), and ( ii ) the applicable Borrowers shall pay to the applicable Lenders any costs of the type referred to in subsection 4.12 in connection with any repayment and/or Revolving Credit Loans required pursuant to the preceding clause (i). Without limiting the obligations of the Borrowers provided for in this subsection 2.6 , the Administrative Agent and the Lenders agree that they will use commercially reasonable efforts to attempt to minimize the costs of the type referred to in subsection 4.12 which the Borrowers would otherwise incur in connection with the implementation of an increase in the Commitments.
2.7 Extension Amendments .
(a) The Parent Borrower may at any time and from time to time request that all or a portion, including one or more Tranches, of the Commitments (including any Extended Commitments), each existing at the time of such request (each, an “ Existing Commitment ” and any related Loans thereunder, “ Existing Loans ”; each Existing Commitment and related Existing Loans together being referred to as an “ Existing Tranche ”) be converted to extend the termination date thereof and the scheduled maturity date(s) of any payment of principal with respect to all or a portion of any principal amount of Existing Loans related to such Existing Commitments (any such Existing Commitments which have been so extended, “ Extended Commitments ” and any related Existing Loans, “ Extended Loans ”, with the commitments of the Existing Tranche not so extended and any related Loans thereunder being referred to as “ Non-Extended Commitments ” and “ Non-Extended Loans ”, respectively) and to provide for other terms consistent with this subsection 2.7 ; provided that ( i ) any such request shall be made by the Parent Borrower to all Lenders with Existing Commitments with a like maturity date (whether under one or more Tranches) on a pro rata basis, and ( ii ) any Minimum Extension Condition shall be satisfied unless waived by the Parent Borrower. In order to establish any Extended Commitments, the Parent Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Existing Tranche) (an “ Extension Request ”) setting forth the proposed terms of the Extended Commitments to be established, which Extension Request may be
 
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modified, revoked, or revoked and reissued by the Parent Borrower at any time prior to the effectiveness of the Extension Amendment. The terms of the Extended Commitments to be established pursuant to an Extension Request shall be identical to those applicable to the Existing Commitments from which they are to be extended (the “ Specified Existing Commitment ”) except ( x ) all or any of the final maturity dates of such Extended Commitments may be delayed to later dates than the final maturity dates of the Specified Existing Commitments, ( y ) ( A ) the interest margins with respect to the Extended Commitments may be higher or lower than the interest margins for the Specified Existing Commitments and/or ( B ) additional fees may be payable to the Lenders providing such Extended Commitments in addition to or in lieu of any increased margins contemplated by the preceding clause (A) and ( z ) the applicable Commitment Fee Percentage with respect to the Extended Commitments may be higher or lower than the applicable Commitment Fee Percentage for the Specified Existing Commitment, in each case to the extent provided in the applicable Extension Amendment; provided that, notwithstanding anything to the contrary in this subsection 2.7 , ( 1 ) the borrowing and repayment (other than in connection with a permanent repayment and termination of commitments) of Loans with respect to any Extended Commitments and Non-Extended Commitments shall be made on a pro rata basis with all such other outstanding Extended Commitments and Non-Extended Commitments, ( 2 ) assignments and participations of Extended Commitments and Extended Loans shall be governed by the same assignment and participation provisions applicable to Commitments and the Revolving Credit Loans related to such Commitments set forth in subsection 11.6 , and ( 3 ) no termination of Extended Commitments and no repayment of Extended Loans accompanied by a corresponding permanent reduction in Extended Commitments shall be permitted unless such termination or repayment (and corresponding reduction) is accompanied by an at least pro rata termination or permanent repayment (and corresponding permanent reduction), as applicable, of all earlier maturing corresponding Non-Extended Commitments and Revolving Credit Loans related to such earlier maturing corresponding Non-Extended Commitments (or all earlier maturing corresponding Non-Extended Commitments and Revolving Credit Loans related to such corresponding Non-Extended Commitments shall otherwise be or have been terminated and repaid in full). No Lender shall have any obligation to agree to have any of its Existing Loans or Existing Commitments of any Existing Tranche converted into Extended Loans or Extended Commitments pursuant to any Extension Request. Any Extended Commitments shall constitute a separate Tranche of Commitments from the Specified Existing Commitments and from any other Existing Commitments (together with any other Extended Commitments so established on such date); provided that any Extended Commitments or Extended Loans may, to the extent provided in the applicable Extension Amendment, be designated as part of any Tranche of Commitments or Loans, as applicable, established on or prior to the date of such Extension Amendment.
(b) The Parent Borrower shall provide the applicable Extension Request at least 10 Business Days (or such shorter period as may be agreed to by the Administrative Agent) prior to the date on which Lenders under the applicable Existing Tranche or Existing Tranches are requested to respond. Any Lender (an “ Extending Lender ”) wishing to have all or a portion of its Specified Existing Commitments converted into Extended Commitments shall notify the Administrative Agent (an “ Extension Election ”)
 
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on or prior to the date specified in such Extension Request of the amount of its Specified Existing Commitments that it has elected to convert into Extended Commitments. In the event that the aggregate amount of Specified Existing Commitments subject to Extension Elections exceeds the amount of Extended Commitments requested pursuant to the Extension Request, the Specified Existing Commitments subject to Extension Elections shall be converted to Extended Commitments on a pro rata basis based on the amount of Specified Existing Commitments included in each such Extension Election. Notwithstanding the conversion of any Existing Commitment into an Extended Commitment, such Extended Commitment shall be treated identically to all Commitments for purposes of the obligations of a Lender in respect of Letters of Credit under Section 3 and Swing Line Loans under subsection 2.4 , except that the applicable Extension Amendment may provide that the maturity date for Swing Line Loans and/or Letters of Credit may be extended and the related obligations to make Swing Line Loans and issue Letters of Credit may be continued so long as the Swing Line Lender and/or the applicable Issuing Lender, as applicable, have consented to such extensions in their sole discretion (it being understood that no consent of any other Lender shall be required in connection with any such extension).
(c) Extended Commitments shall be established pursuant to an amendment (an “ Extension Amendment ”) to this Agreement (which may include amendments to provisions related to maturity, interest margins or fees referenced in subsection 2.7(a) clauses (x) to (z) and which, except to the extent expressly contemplated by the penultimate sentence of this subsection 2.7(c) and notwithstanding anything to the contrary set forth in subsection 11.1 , shall not require the consent of any Lender other than the Extending Lenders with respect to the Extended Commitments established thereby) executed by the Loan Parties, the Administrative Agent and the Extending Lenders. Notwithstanding anything to the contrary in this Agreement and without limiting the generality or applicability of subsection 11.1 to any Subsection 2.7 Additional Amendments, any Extension Amendment may provide for additional terms and/or additional amendments other than those referred to or contemplated above (any such additional amendment, a “ Subsection 2.7 Additional Amendment ”) to this Agreement and the other Loan Documents; provided that such Subsection 2.7 Additional Amendments do not become effective prior to the time that such Subsection 2.7 Additional Amendments have been consented to (including, without limitation, pursuant to consents applicable to holders of any Extended Commitments provided for in any Extension Amendment) by such of the Lenders, Loan Parties and other parties (if any) as may be required in order for such Subsection 2.7 Additional Amendments to become effective in accordance with subsection 11.1 ; provided , further , that no Extension Amendment may provide for ( a ) any Extended Commitment or Extended Loans to be secured by any Collateral or other assets of any Loan Party that does not also secure the Existing Tranches and ( b ) so long as any Existing Tranches are outstanding, any mandatory or voluntary prepayment provisions that do not also apply to the Existing Tranches (other than Existing Tranches secured on a junior basis by the Collateral or ranking junior in right of payment, which may be subject to junior prepayment provisions) on a pro rata basis (or otherwise provide for more favorable prepayment treatment for Existing Tranches than such Extended Commitments or Extended Loans). It is understood and agreed that each Lender has consented for all purposes requiring its
 
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consent, and shall at the effective time thereof be deemed to consent to each amendment to this Agreement and the other Loan Documents authorized by this subsection 2.7 and the arrangements described above in connection therewith except that the foregoing shall not constitute a consent on behalf of any Lender to the terms of any Subsection 2.7 Additional Amendment. In connection with any Extension Amendment, the Parent Borrower shall deliver an opinion of counsel reasonably acceptable to the Administrative Agent as to the enforceability of such Extension Amendment, this Agreement as amended thereby, and such of the other Loan Documents (if any) as may be amended thereby.
(d) Notwithstanding anything to the contrary contained in this Agreement, ( A ) on any date on which any Existing Tranche is converted to extend the related scheduled maturity date(s) in accordance with clause (a) above (an “ Extension Date ”), in the case of the Specified Existing Commitments of each Extending Lender, the aggregate principal amount of such Specified Existing Commitments shall be deemed reduced by an amount equal to the aggregate principal amount of Extended Commitments so converted by such Lender on such date, and such Extended Commitments shall, unless otherwise provided by the Extension Amendment, be established as a separate Tranche of Commitments from the Specified Existing Commitments and from any other Existing Commitments (together with any other Extended Commitments so established on such date) and ( B ) if, on any Extension Date, any Revolving Credit Loans of any Extending Lender are outstanding under the applicable Specified Existing Commitments, such Revolving Credit Loans (and any related participations) shall be deemed to be allocated as Extended Loans (and related participations) and Existing Loans (and related participations) in the same proportion as such Extending Lender’s Specified Existing Commitments to Extended Commitments so converted by such Lender on such date.
(e) If, in connection with any proposed Extension Amendment, any Lender declines to consent to the extension of its Commitment on the terms and by the deadline set forth in the applicable Extension Request (each such other Lender, a “ Non-Extending Lender ”) then the Parent Borrower may, on notice to the Administrative Agent and the Non-Extending Lender, ( A ) replace such Non-Extending Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to subsection 11.6 (with the assignment fee and any other costs and expenses to be paid by the Parent Borrower in such instance) all of its rights and obligations under this Agreement to one or more assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Parent Borrower to find a replacement Lender; provided , further , that the applicable assignee shall have agreed to provide a Commitment on the terms set forth in such Extension Amendment; and provided , further , that all obligations of the Borrowers owing to the Non-Extending Lender relating to the Revolving Credit Loans and participations so assigned shall be paid in full by the assignee Lender to such Non-Extending Lender concurrently with such Assignment and Acceptance or ( B ) upon notice to the Administrative Agent, to prepay the Loans and, at the Parent Borrower’s option, terminate the Commitments of such Non-Extending Lender, in whole or in part, subject to subsection 4.12 , without premium or penalty. In connection with any such replacement under this subsection 2.7 , if the Non-Extending Lender does not execute and deliver to the Administrative Agent a duly completed Assignment and Acceptance and/or
 
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any other documentation necessary to reflect such replacement by the later of ( a ) the date on which the replacement Lender executes and delivers such Assignment and Acceptance and/or such other documentation and ( b ) the date as of which all obligations of the Borrowers owing to the Non-Extending Lender relating to the Loans and participations so assigned shall be paid in full by the assignee Lender to such Non-Extending Lender, then such Non-Extending Lender shall be deemed to have executed and delivered such Assignment and Acceptance and/or such other documentation as of such date and the applicable Borrower shall be entitled (but not obligated) to execute and deliver such Assignment and Acceptance and/or such other documentation on behalf of such Non-Extending Lender.
(f) Following any Extension Date, with the written consent of the Parent Borrower, any Non-Extending Lender may elect to have all or a portion of its Existing Commitment deemed to be an Extended Commitment under the applicable Extended Commitment Tranche on any date (each date a “ Designation Date ”) prior to the maturity date of such Extended Commitments; provided that ( i ) such Lender shall have provided written notice to the Parent Borrower and the Administrative Agent at least 10 Business Days (or such shorter period as may be agreed to by the Administrative Agent) prior to such Designation Date and ( ii ) no more than three Designation Dates may occur in any one year period without the written consent of the Administrative Agent. Following a Designation Date, the Existing Commitments held by such Lender so elected to be extended will be deemed to be Extended Commitments of the applicable Extended Commitment Tranche, and any Existing Commitments held by such Lender not elected to be extended, if any, shall continue to be “Existing Commitments.”
(g) With respect to all extensions consummated by the Borrowers pursuant to this subsection 2.7 , ( i ) such extensions shall not constitute payments or prepayments for purposes of subsection 4.4 and ( ii ) no Extension Request is required to be in any minimum amount or any minimum increment, provided that the Parent Borrower may at its election specify as a condition (a “ Minimum Extension Condition ”) to consummating any such extension that a minimum amount (to be determined and specified in the relevant Extension Request in the Parent Borrower’s discretion and may be waived by the Parent Borrower) of Existing Commitments of any or all applicable Tranches be extended. The Administrative Agent and the Lenders hereby consent to the transactions contemplated by this subsection 2.7 (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Commitments on such terms as may be set forth in the relevant Extension Request) and hereby waive the requirements of any provision of this Agreement (including, without limitation, subsections 4.4 and 4.8 ) or any other Loan Document that may otherwise prohibit any such extension or any other transaction contemplated by this subsection 2.7 .
 
SECTION 3.	LETTERS OF CREDIT .	
3.1 L/C Commitment .
(a) Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the other Lenders set forth in subsection 3.4(a) , agrees to
 
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continue under this Agreement for the account of the applicable Borrower the Existing Letters of Credit issued by it and to issue letters of credit (the letters of credit issued on and after the Closing Date pursuant to this Section 3 , together with the Existing Letters of Credit, the “ Letters of Credit ”) for the account of the Borrowers on any Business Day during the Commitment Period but in no event later than the fifth Business Day prior to the Maturity Date in such form as may be approved from time to time by such Issuing Lender; provided that such Issuing Lender shall not issue any Letter of Credit if, after giving effect to such issuance, ( i ) the Aggregate Tranche A Canadian Borrower Credit Extensions, or Aggregate Tranche A U.S. Borrower Credit Extensions, as the case may be, would exceed the applicable limitations set forth in subsection 2.1 (it being understood and agreed that the Administrative Agent shall calculate the Dollar Equivalent of the then outstanding Revolving Credit Loans in Canadian Dollars on the date on which the Borrower Representative has requested that the applicable Issuing Lender issue a Letter of Credit for purposes of determining compliance with this clause (i)) or ( ii ) ( x ) the L/C Obligations in respect of U.S. Facility Letters of Credit would exceed $100,000,000 or ( y ) the L/C Obligations in respect of Canadian Facility Letters of Credit would exceed $25,000,000. Each Letter of Credit shall (i) be denominated in Dollars or Canadian Dollars (in the case of the Canadian Facility Letters of Credit only), requested by the Borrower Representative and shall be either ( A ) a standby letter of credit issued to support obligations of the Parent Borrower or any of its Subsidiaries, contingent or otherwise, which finance the working capital and business needs of the Parent Borrower and its Subsidiaries incurred in the ordinary course of business (a “ Standby Letter of Credit ”) or ( B ) a commercial letter of credit in respect of the purchase of goods or services by the Parent Borrower or any of its Subsidiaries in the ordinary course of business (a “ Commercial Letter of Credit ”), and ( ii ) unless otherwise agreed by the Issuing Lender, mature not more than twelve months after the date of issuance (automatically renewable annually thereafter or for such longer period of time as may be agreed by the relevant Issuing Lender) and, in any event no later than the fifth Business Day prior to the Maturity Date (except to the extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the relevant Issuing Lender). Each Letter of Credit issued by the U.S. Facility Issuing Lender shall be deemed to constitute a utilization of the U.S. Facility Commitments and each Letter of Credit issued by the Canadian Facility Issuing Lender shall be deemed to constitute a utilization of the Canadian Facility Commitments, and shall be participated in (as more fully described in the following subsection 3.4 ) by the Tranche A U.S. Facility Lenders or the Tranche A Canadian Facility Lenders, as applicable, in accordance with their respective Tranche A U.S. Facility Commitment Percentages or Tranche A Canadian Facility Commitment Percentages, as applicable. All Letters of Credit issued under the U.S. Facility shall be denominated in Dollars and shall be issued for the account of the applicable U.S. Borrower. All Letters of Credit issued under the Canadian Facility shall be denominated in Dollars or Canadian Dollars and shall be issued for the account of the Canadian Borrower. For greater certainty, no Letters of Credit shall be issued under the Canadian Facility on account of a U.S. Borrower. For the avoidance of doubt, any Letters of Credit that remain outstanding and undrawn on the Maturity Date shall be either cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender.
 
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(b) Unless otherwise agreed to by the applicable Issuing Lender and the Borrower Representative on behalf of the applicable Borrower at the time of issuance, each Letter of Credit shall be governed by, and shall be construed in accordance with, the laws of the State of New York, and to the extent not prohibited by such laws, the ISP or (at the option of the Borrower Representative) the Uniform Customs shall apply to each standby Letter of Credit, and the Uniform Customs shall apply to each commercial Letter of Credit. The ISP shall not in any event apply to this Agreement.
(c) No Issuing Lender shall at any time issue any Letter of Credit hereunder if such issuance would conflict with, or cause such Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit .
(a) The Borrower Representative may from time to time request during the Commitment Period but in no event later than the fifth day prior to the Maturity Date that an Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender and the Administrative Agent, at their respective addresses for notices specified herein, a Letter of Credit Request therefor (completed to the reasonable satisfaction of such Issuing Lender), and such other certificates, documents and other papers and information as such Issuing Lender may reasonably request. Each Letter of Credit Request shall specify the applicable Borrower and that the requested Letter of Credit is to be denominated in Dollars or Canadian Dollars in the case of the Canadian Borrower. Upon receipt of any Letter of Credit Request, the applicable Issuing Lender shall ( i ) confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Request from the Borrower Representative and, if not so received, such Issuing Lender shall provide the Administrative Agent with a copy thereof and ( ii ) process such Letter of Credit Request and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and, unless notified by the Administrative Agent, any Lender or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in subsection 6.2 shall not then be satisfied, shall promptly issue the Letter of Credit requested thereby (but in no event shall such Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Letter of Credit Request therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the applicable Issuing Lender and the Borrower Representative. The applicable Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower Representative promptly following the issuance thereof. Promptly after the issuance or amendment of any Standby Letter of Credit, the applicable Issuing Lender shall notify the Borrower Representative and the Administrative Agent in writing, of such issuance or amendment and such notice shall be accompanied by a copy of such issuance or amendment. Upon receipt of such notice, the Administrative Agent shall promptly notify the Tranche A U.S. Facility Lenders or the Tranche A Canadian Facility Lenders, as the case may be, in writing, of such issuance or amendment, and, if so requested by a Lender, the Administrative Agent shall provide to
 
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such Lender copies of such issuance or amendment. With regard to Commercial Letters of Credit, each Issuing Lender shall on the first Business Day of each week provide the Administrative Agent by facsimile, with a report detailing the aggregate daily outstanding Commercial Letters of Credit during the previous week.
(b) The making of each request for a Letter of Credit by the Borrower Representative shall be deemed to be a representation and warranty by the Borrower Representative that such Letter of Credit may be issued in accordance with, and will not violate the requirements of, subsection 3.1 . Unless the respective Issuing Lender has received notice from the Required Lenders before it issues a Letter of Credit that one or more of the applicable conditions specified in Section 6 are not then satisfied, or that the issuance of such Letter of Credit would violate subsection 3.1 , then such Issuing Lender may issue the requested Letter of Credit for the account of the applicable Borrower in accordance with the Issuing Lender’s usual and customary practices.
3.3 Fees, Commissions and Other Charges .
(a) The applicable Borrower agrees to pay to the Administrative Agent for the account of the relevant Issuing Lender and the L/C Participants, a letter of credit commission (the “ L/C Fee ,” and collectively, the “ L/C Fees ”) with respect to each Letter of Credit issued by such Issuing Lender, computed for the period from and including the date of issuance of such Letter of Credit through to the expiration date of such Letter of Credit, computed at a rate per annum equal to the Applicable Margin then in effect for Eurocurrency Loans that are Loans calculated on the basis of a 360-day year for the actual days elapsed, of the maximum amount available to be drawn under such Letter of Credit, payable on the first day of each January, April, July and October in arrears on each L/C Fee Payment Date with respect to such Letter of Credit and on the Maturity Date or such earlier date as the Commitments shall terminate as provided herein. Such L/C Fee shall be payable to the Administrative Agent for the account of the Lenders to be shared ratably among them in accordance with their respective Tranche A U.S. Facility Commitment Percentages or Tranche A Canadian Facility Commitment Percentages. The applicable Borrower shall pay to the Administrative Agent for the account of the relevant Issuing Lender a facing fee equal to 1/8 of 1.0% per annum for each Letter of Credit of the maximum amount available to be drawn under such Letter of Credit (the “ L/C Facing Fee ”), payable quarterly in arrears on each L/C Fee Payment Date with respect to such Letter of Credit, on the Maturity Date or such other date as the Commitments shall terminate and upon termination of such Letter of Credit. Such commissions and fees shall be nonrefundable. Such fees and commissions shall be payable in Dollars (or Canadian Dollars, in the case of the Canadian Borrower), notwithstanding that a Letter of Credit may be denominated in Dollars or Canadian Dollars.
(b) In addition to the foregoing commissions and fees, each applicable Borrower agrees to pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit issued by such Issuing Lender.
(c) The Administrative Agent shall, promptly following its receipt thereof, distribute to the applicable Issuing Lender and the applicable L/C Participants all commissions and fees received by the Administrative Agent for their respective accounts pursuant to this subsection 3.3 .
 
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3.4 L/C Participations .
(a) Each Issuing Lender irrevocably agrees to grant and hereby grants to each U.S. Facility L/C Participant or Canadian Facility L/C Participant, as applicable, and, to induce such Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the applicable Issuing Lender, without recourse or warranty, on the terms and conditions hereinafter stated, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Tranche A U.S. Facility Commitment Percentage or Tranche A Canadian Facility Commitment Percentage, as applicable (determined on the date of issuance of the relevant Letter of Credit) in such Issuing Lender’s obligations and rights under each Letter of Credit issued or continued hereunder (including, without limitation, each Letter of Credit outstanding on the Maturity Date), the amount of each draft paid by such Issuing Lender thereunder and the obligations of the Loan Parties under this Agreement with respect thereto (although Letter of Credit fees and commissions, including the L/C Fees, shall be payable directly to the Administrative Agent for the account of such Issuing Lender and L/C Participants, as provided in subsection 3.3 , and the L/C Participants shall have no right to receive any portion of any facing fees with respect to any such Letters of Credit) and any security therefor or guaranty pertaining thereto. Each L/C Participant unconditionally and irrevocably agrees with the applicable Issuing Lender that, if a draft is paid under any Letter of Credit for which such Issuing Lender is not reimbursed in full by the applicable Borrower in respect of such Letter of Credit in accordance with subsection 3.5(a) , such L/C Participant shall pay to the Administrative Agent for the account of the Issuing Lender upon demand at the Administrative Agent’s address for notices specified herein an amount equal to such L/C Participant’s Tranche A U.S. Facility Commitment Percentage or Tranche A Canadian Facility Commitment Percentage, as applicable, of the amount of such draft, or any part thereof, which is not so reimbursed; provided that nothing in this paragraph shall relieve such Issuing Lender of any liability resulting from the gross negligence or willful misconduct of such Issuing Lender, or otherwise affect any defense or other right that any L/C Participant may have as a result of such gross negligence or willful misconduct. All calculations of the L/C Participants’ Tranche A U.S. Facility Commitment Percentages and Tranche A Canadian Facility Commitment Percentages shall be made from time to time by the Administrative Agent, which calculations shall be conclusive absent manifest error.
(b) If any amount required to be paid by any L/C Participant to the Administrative Agent for the account of such Issuing Lender on demand by such Issuing Lender pursuant to subsection 3.4(a) in respect of any unreimbursed portion of any payment made by such Issuing Lender under any Letter of Credit is paid to the Administrative Agent for the account of such Issuing Lender within three Business Days after the date such demand is made, such L/C Participant shall pay to the Administrative
 
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Agent for the account of such Issuing Lender on demand an amount equal to the product of such amount, times the daily average Federal Funds Effective Rate (or, in the case of a Tranche A Canadian Facility Lender, the interbank rate customarily charged by the Bank of Canada for overnight loans) during the period from and including the date such payment is required to the date on which such payment is immediately available to the Administrative Agent for the account of such Issuing Lender, times a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to subsection 3.4(a) is not in fact made available to the Administrative Agent for the account of such Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, such Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon (with interest based on the Dollar Equivalent of any amounts denominated in Canadian Dollars) calculated from such due date at the rate per annum applicable to Tranche A U.S. Facility Revolving Credit Loans and Tranche A Canadian Facility Revolving Credit Loans, as applicable, maintained as ABR Loans accruing interest at the ABR hereunder. A certificate of such Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this subsection 3.4 (which shall include calculations of any such amounts in reasonable detail) shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the applicable Issuing Lender has made payment under any Letter of Credit and has received through the Administrative Agent from any L/C Participant its pro rata share of such payment in accordance with subsection 3.4(a) , such Issuing Lender receives through the Administrative Agent, any payment related to such Letter of Credit (whether directly from the applicable Borrower in respect of such Letter of Credit or otherwise, including proceeds of Collateral applied thereto by the Administrative Agent or by such Issuing Lender), or any payment of interest on account thereof, the Administrative Agent will, if such payment is received prior to 1:00 P.M., New York City time, on a Business Day, distribute to such L/C Participant its pro rata share thereof prior to the end of such Business Day and otherwise the Administrative Agent will distribute such payment on the next succeeding Business Day; provided , however , that in the event that any such payment received by the Issuing Lender through the Administrative Agent shall be required to be returned by such Issuing Lender, such L/C Participant shall return to such Issuing Lender through the Administrative Agent the portion thereof previously distributed by the Administrative Agent to it.
3.5 Reimbursement Obligation of the Borrowers .
(a) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable Issuing Lender shall notify the Borrower Representative and the Administrative Agent thereof. Each U.S. Borrower hereby agrees to reimburse each U.S. Facility Issuing Lender (through the Administrative Agent) upon receipt by the Borrower Representative of notice from such U.S. Facility Issuing Lender of the date and amount of a draft presented under any Letter of Credit issued on its behalf and paid by such Issuing Lender, for the amount of such draft so paid
 
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and any taxes, fees, charges or other costs or expenses reasonably incurred by each U.S. Facility Issuing Lender in connection with such payment. The Canadian Borrower hereby agrees to reimburse each Canadian Facility Issuing Lender (through the Administrative Agent) upon receipt by the Borrower Representative of notice from such Canadian Facility Issuing Lender of the date and amount of a draft presented under any Letter of Credit issued on its behalf and paid by such Canadian Facility Issuing Lender, for the amount of such draft so paid and any taxes, fees, charges or other costs or expenses reasonably incurred by each Canadian Facility Issuing Lender in connection with such payment. Each such payment shall be made to the Administrative Agent for the account of the applicable Issuing Lender at its address for notices specified herein and in immediately available funds, on the date which is one Business Day (or such longer period as may be agreed to by the Administrative Agent and the applicable Issuing Lender) after the Borrower Representative receives such notice.
(b) Interest shall be payable on any and all amounts remaining unpaid by the applicable Borrower (or by the Borrower Representative on behalf of the applicable Borrower) under this subsection 3.5(b) from the date the draft presented under the affected Letter of Credit is paid to the date on which the applicable Borrower is required to pay such amounts pursuant to paragraph (a) above at the rate which would then be payable on any outstanding ABR Loans that are Tranche A U.S. Facility Revolving Credit Loans or Tranche A Canadian Facility Revolving Credit Loans, as applicable, and thereafter until payment in full at the rate which would be payable on any outstanding ABR Loans that are Tranche A U.S. Facility Revolving Credit Loans and Tranche A Canadian Facility Revolving Credit Loans, as applicable, which were then overdue.
3.6 Obligations Absolute .
(a) The applicable Loan Parties’ obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, counterclaim or defense to payment which any of them may have or have had against the Issuing Lender, any L/C Participant or any beneficiary of a Letter of Credit; provided that this paragraph shall not relieve the Issuing Lender or any L/C Participant of any liability resulting from the gross negligence or willful misconduct of the Issuing Lender or such L/C Participant, or otherwise affect any defense or other right that the Loan Parties may have as a result of any such gross negligence or willful misconduct.
(b) Each Borrower agrees with each Issuing Lender that such Issuing Lender shall not be responsible for, and the Borrowers’ Reimbursement Obligations under subsection 3.5(a) shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between any Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of any Borrower against any beneficiary of such Letter of Credit or any such transferee; provided that this paragraph shall not relieve the Issuing Lender or any L/C Participant of any liability resulting from the gross negligence or willful misconduct of the Issuing Lender or such L/C Participant, or otherwise affect any defense or other right that the Loan Parties may have as a result of any such gross negligence or willful misconduct.
 
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(c) Neither the Issuing Lender nor any L/C Participant shall be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except with respect to errors or omissions caused by such Person’s gross negligence or willful misconduct.
(d) Each Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the UCC or other applicable law, shall be binding on such Borrower and shall not result in any liability of such Issuing Lender or any L/C Participant to any such Borrower.
3.7 Letter of Credit Payments . If any draft shall be presented for payment under any Letter of Credit, the Issuing Lender shall promptly notify the Borrower Representative of the date and amount thereof. The responsibility of the Issuing Lender to the applicable Borrower in respect of any Letter of Credit in connection with any draft presented for payment under such Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit; provided that this paragraph shall not relieve the Issuing Lender of any liability resulting from the gross negligence or willful misconduct of the Issuing Lender, or otherwise affect any defense or other right that the Loan Parties may have as a result of any such gross negligence or willful misconduct.
3.8 Letter of Credit Request . To the extent that any provision of any Letter of Credit Request related to any Letter of Credit is inconsistent with the provisions of this Section 3 , the provisions of this Section 3 shall apply.
3.9 Additional Issuing Lenders . The Borrower Representative may, at any time and from time to time with the consent of the Administrative Agent (which consent shall not be unreasonably withheld), and such Lender, designate one or more additional Canadian Facility Lenders (that are Canadian Qualified Lenders) or U.S. Facility Lenders, as applicable, to act as an issuing lender under the terms of this Agreement. Any Lender designated as an issuing lender pursuant to this subsection 3.9 shall be deemed to be a “U.S. Facility Issuing Lender” (in addition to being a U.S. Facility Lender) or a “Canadian Facility Issuing Lender” (in addition to being a Canadian Facility Lender), as the case may be, and an “Issuing Lender” (in addition to being a Lender) in respect of Letters of Credit issued or to be issued by such Lender, and, with respect to such Letters of Credit, such term shall thereafter apply to the other Issuing Lender or Issuing Lenders and such Lender. Any such additional Issuing Lender may resign as Issuing Lender (with respect to any future issuances, including renewals) upon 10 Business Days’ notice to the Lenders.
 
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3.10 Replacement of Issuing Lender . Any Issuing Lender may be replaced at any time ( x ) by written agreement among the Borrowers, the Administrative Agent, the replaced Issuing Lender and the successor Issuing Lender or ( y ) by the Borrower Representative (on behalf of the Borrowers), for any reason, with the consent of the Administrative Agent (which consent shall not be unreasonably withheld). The Administrative Agent shall notify the Lenders of any such replacement of such Issuing Lender. At the time any such replacement shall become effective, the applicable Borrowers shall pay all unpaid fees accrued for the account of such replaced Issuing Lender pursuant to subsection 3.3(a) . From and after the effective date of any such replacement, ( 1 ) the successor Issuing Lender shall have all the rights and obligations of such replaced Issuing Lender under this Agreement with respect to Letters of Credit to be issued thereafter and ( 2 ) references herein to the term “Issuing Lender” shall be deemed to refer to such successor or to any previous Issuing Lender, or to such successor and all previous Issuing Lenders, as the context shall require. After the replacement of any Issuing Lender hereunder, the replaced Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of any Issuing Lender under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit or to amend or extend any previously issued Letters of Credit.
 
SECTION 4.	GENERAL PROVISIONS .	
4.1 Interest Rates and Payment Dates .
(a) Each ( i ) Eurocurrency Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurocurrency Rate determined for such day plus the Applicable Margin in effect for such day with respect to such Loan and ( ii ) BA Equivalent Loans shall bear interest at a rate per annum that shall be equal to the BA Rate, plus the Applicable Margin for BA Equivalent Loans.
(b) Each ABR Loan that is a U.S. Facility Revolving Credit Loan denominated in Dollars shall bear interest for each day that it is outstanding at a rate per annum equal to the ABR in effect for such day plus the Applicable Margin in effect for such day with respect to such Loan. Each ABR Loan that is a Canadian Facility Revolving Credit Loan denominated in Dollars shall bear interest for each day that it is outstanding at a rate per annum equal to the Canadian Base Rate in effect for such day plus the Applicable Margin in effect for such day with respect to such Loan. Each ABR Loan denominated in Canadian Dollars shall bear interest for each day that it is outstanding at a rate per annum equal to the Canadian Prime Rate in effect for such day plus the Applicable Margin in effect for such day with respect to such Loan.
(c) If all or a portion of ( i ) the principal amount of any Loan, ( ii ) any interest payable thereon or ( iii ) any commitment fee, letter of credit commission, letter of credit fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum which is ( y ) in the case of overdue principal, the rate that would otherwise be applicable thereto pursuant to the relevant foregoing provisions of this subsection 4.1 plus 2.00%, and ( z ) in the case of other amounts, including overdue interest and Reimbursement Obligations, the rate described in paragraph (b) of this subsection 4.1 for
 
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ABR Loans that are Revolving Credit Loans accruing interest at the ABR (or ( A ) the Canadian Base Rate in the case of Canadian Facility Revolving Credit Loans denominated in Dollars and ( B ) the Canadian Prime Rate in the case of Canadian Facility Revolving Credit Loans denominated in Canadian Dollars) plus 2.00%, in each case from the date of such non-payment until such amount is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (c) of this subsection 4.1 shall be payable from time to time on demand.
(e) It is the intention of the parties hereto to comply strictly with applicable usury laws; accordingly, it is stipulated and agreed that the aggregate of all amounts which constitute interest under applicable usury laws, whether contracted for, charged, taken, reserved, or received, in connection with the indebtedness evidenced by this Agreement or any Notes, or any other document relating or referring hereto or thereto, now or hereafter existing, shall never exceed under any circumstance whatsoever the maximum amount of interest allowed by applicable usury laws.
(f) Any provision of this Agreement that would oblige a Canadian Loan Party to pay any fine, penalty or rate of interest on any arrears of principal or interest secured by a mortgage on real property or hypothec on immovables that has the effect of increasing the charge on arrears beyond the rate of interest payable on principal money not in arrears shall not apply to such Canadian Loan Party, which shall be required to pay interest on money in arrears at the same rate of interest payable on principal money not in arrears.
(g) If any provision of this Agreement would oblige a Canadian Loan Party to make any payment of interest or other amount payable to any Secured Party in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by that Lender of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by applicable law or so result in a receipt by that Canadian Loan Party of “interest” at a “criminal rate,” such adjustment to be effected, to the extent necessary (but only to the extent necessary), as follows:
(i) first, by reducing the amount or rate of interest; and
(ii) thereafter, by reducing any fees, commissions, costs, expenses, premiums and other amounts required to be paid which would constitute interest for purposes of section 347 of the Criminal Code (Canada).
(iii) Whenever interest or fees payable by a Canadian Loan Party is calculated on the basis of a period which is less than the actual number of days in a calendar year, each rate of interest and fee determined pursuant to such
 
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calculation is, for the purpose of the Interest Act (Canada), equivalent to such rate multiplied by the actual number of days in the calendar year in which such rate is to be ascertained and divided by the number of days used as the basis of such calculation. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement, and the rates of interest stipulated in this Agreement are intended to be nominal rates and not effective rates or yields.
4.2 Conversion and Continuation Options .
(a) The Borrower Representative (on behalf of the applicable Borrower) may elect from time to time to convert outstanding Loans ( i ) from Eurocurrency Loans to ABR Loans outstanding in Dollars, or ( ii ) BA Equivalent Loans to ABR Loans denominated in Canadian Dollars, by the Borrower Representative giving the Administrative Agent at least two Business Days’ prior irrevocable notice of such election, provided that any such conversion of Eurocurrency Loans or BA Equivalent Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower Representative (on behalf of the applicable Borrower) may elect from time to time to convert outstanding Loans ( x ) from ABR Loans outstanding in Dollars to Eurocurrency Loans or ( y ) from ABR Loans outstanding in Canadian Dollars to BA Equivalent Loans, by the Borrower Representative giving the Administrative Agent at least three Business Days’ prior irrevocable notice of such election. Any such notice of conversion to Eurocurrency Loans or BA Equivalent Loans shall specify the length of the initial Interest Period or Interest Periods therefor. Upon receipt of any such notice the Administrative Agent shall promptly notify each affected Lender thereof. All or any part of outstanding Eurocurrency Loans, BA Equivalent Loans and ABR Loans may be converted as provided herein, provided that ( i ) (unless the Required Lenders otherwise consent) no Loan may be converted into a Eurocurrency Loan or BA Equivalent Loan when any Default or Event of Default has occurred and is continuing and the Administrative Agent has given notice to the Borrower Representative that no such conversions may be made, and ( ii ) no Loan may be converted into a Eurocurrency Loan or a BA Equivalent Loan after the date that is one month prior to the Maturity Date.
(b) Any Eurocurrency Loan or BA Equivalent Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower Representative (on behalf of the applicable Borrower), giving notice to the Administrative Agent of the length of the next Interest Period to be applicable to such Loan, determined in accordance with the applicable provisions of the term “Interest Period” set forth in subsection 1.1 , provided that no Eurocurrency Loan or BA Equivalent Loan may be continued as such ( i ) (unless the Required Lenders otherwise consent) when any Default or Event of Default has occurred and is continuing and the Administrative Agent has or the Required Lenders have given notice to the Borrower Representative that no such continuations may be made or ( ii ) after the date that is one month prior to the Maturity Date, and provided , further , that in the case of Eurocurrency Loans made or outstanding in Dollars or BA Equivalent Loans, if the Borrower Representative shall fail to give any required notice as described above in this subsection 4.2(b) or if such continuation is not permitted pursuant to the preceding proviso, such Eurocurrency Loans
 
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or BA Equivalent Loans shall be automatically converted to ABR Loans denominated in Dollars with respect to Eurocurrency Loans and denominated in Canadian Dollars with respect to BA Equivalent Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice of continuation pursuant to this subsection 4.2(b) , the Administrative Agent shall promptly notify each affected Lender thereof.
4.3 Minimum Amounts of Sets . All borrowings, conversions and continuations of Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of the Eurocurrency Loans comprising each Set shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof, and the aggregate principal amount of the BA Equivalent Loans comprising each Set shall be equal to Cdn$5,000,000 or a whole multiple of Cdn$1,000,000 in excess thereof and so that there shall not be more than 15 Sets at any one time outstanding.
4.4 Prepayments .
(a) Each of the Borrowers may at any time and from time to time prepay the Loans made to it and the Reimbursement Obligations in respect of Letters of Credit issued for its account, in whole or in part, subject to subsection 4.12 , without premium or penalty, upon at least three Business Days’ (or such shorter period as may be agreed to by the Administrative Agent) irrevocable notice by the Borrower Representative to the Administrative Agent (in the case of Eurocurrency Loans outstanding in Dollars or BA Equivalent Loans and Reimbursement Obligations outstanding in any Canadian Dollars) or same day irrevocable notice by the Borrower Representative to the Administrative Agent (in the case of ( x ) ABR Loans and ( y ) Reimbursement Obligations outstanding in Dollars or Canadian Dollars); provided that if any such notice of prepayment is given in connection with a conditional notice of termination of Commitments as contemplated by subsection 2.3 then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with subsection 2.3 . Such notice shall specify, in the case of any prepayment of Loans, the identity of the prepaying Borrower, the date and amount of prepayment and whether the prepayment is ( i ) of Revolving Credit Loans or Swing Line Loans, or a combination thereof, and ( ii ) of Eurocurrency Loans, BA Equivalent Loans or ABR Loans or a combination thereof and, in each case if a combination thereof, the principal amount allocable to each and, in the case of any prepayment of Reimbursement Obligations, the date and amount of prepayment, the identity of the applicable Letter of Credit or Letters of Credit and the amount allocable to each of such Reimbursement Obligations. Upon the receipt of any such notice, the Administrative Agent shall promptly notify each affected Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (if a Eurocurrency Loan or BA Equivalent Loan is prepaid other than at the end of the Interest Period applicable thereto) any amounts payable pursuant to subsection 4.12 and accrued interest to such date on the amount prepaid. Partial prepayments of the Loans and the Reimbursement Obligations pursuant to this subsection 4.4(a) shall (unless the Borrower Representative otherwise directs) be applied, first , to payment of any Agent Advances then outstanding, second , to the payment of the Swing Line Loans then outstanding, third , to the payment of any
 
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Revolving Credit Loans that are Tranche A U.S. Facility Revolving Credit Loans or Tranche A Canadian Facility Revolving Credit Loans, as applicable, then outstanding, fourth , to the payment of any Revolving Credit Loans that are Tranche A-1 U.S. Facility Revolving Credit Loans or Tranche A-1 Canadian Facility Revolving Credit Loans, as applicable, then outstanding, fifth , to the payment of any Reimbursement Obligations then outstanding and, last , to cash collateralize any outstanding L/C Obligation on terms reasonably satisfactory to the Administrative Agent; provided , further , that any pro rata calculations required to be made pursuant to this subsection 4.4(a) in respect of any Loan denominated in Canadian Dollars shall be made on a Dollar Equivalent basis. Partial prepayments pursuant to this subsection 4.4(a) shall be in multiples of $1,000,000; provided that, notwithstanding the foregoing, any Loan may be prepaid in its entirety.
(b) The U.S. Borrowers shall prepay all Swing Line Loans then outstanding simultaneously with each borrowing of Revolving Credit Loans.
(c) (i) On any day (other than during an Agent Advance Period) on which the Aggregate Tranche A U.S. Borrower Credit Extensions (disregarding any Agent Advances to the U.S. Borrowers) exceeds the Tranche A U.S. Borrowing Base at such time, the U.S. Borrowers shall prepay on such day ( x )  first , the principal of outstanding Tranche A Canadian Facility Revolving Credit Loans made to the U.S. Borrowers and ( y )  second , the principal of outstanding Tranche A U.S. Facility Revolving Credit Loan, in each case to the extent required and in an aggregate amount equal to such excess. If, after giving effect to the prepayment of all outstanding Tranche A Canadian Facility Revolving Credit Loans made to the U.S. Borrowers and Tranche A U.S. Facility Revolving Credit Loans, the aggregate amount of the U.S. Facility L/C Obligations exceeds the Tranche A U.S. Borrowing Base at such time, the U.S. Borrowers shall pay to the Administrative Agent at the Payment Office on such day an amount of cash and/or Cash Equivalents equal to the amount of such excess (up to a maximum amount equal to such L/C Obligations at such time), such cash and/or Cash Equivalents to be held as security for all obligations of the U.S. Borrowers to the Issuing Lenders, the Canadian Facility Lenders and the U.S. Facility Lenders hereunder in a cash collateral account to be established by, and under the sole dominion and control of, the Administrative Agent.
(ii) Without duplication of any mandatory prepayment required under clause (i) of subsection 4.4(c) above, on any day (other than during an Agent Advance Period) on which the Aggregate Tranche A-1 U.S. Borrower Credit Extensions exceeds the Tranche A-1 U.S. Borrowing Base at such time, the U.S. Borrowers shall prepay on such day the principal of outstanding Tranche A-1 U.S. Facility Revolving Credit Loans, in each case to the extent required and in an aggregate amount equal to such excess. To the extent that, at such time, the Tranche A U.S. Borrowing Base exceeds the Aggregate Tranche A U.S. Borrower Credit Extensions, such prepayment shall be made (subject to satisfaction of the conditions set forth in subsection 6.2(d) ) by refinancing such Tranche A-1 U.S. Facility Revolving Credit Loan with an equivalent amount of Tranche A U.S. Facility Revolving Credit Loans.
 
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(iii) Without duplication of any mandatory prepayment required under clause (i) or (ii) of subsection 4.4(c) above, on any day (other than during an Agent Advance Period) on which the Aggregate Tranche A Canadian Borrower Credit Extensions (disregarding any Agent Advances to the Canadian Borrower) exceeds the sum of ( A ) the Dollar Equivalent of the Tranche A Canadian Borrowing Base at such time plus ( B ) the difference between ( 1 ) the Tranche A U.S. Borrowing Base at such time minus ( 2 ) the Aggregate Tranche A U.S. Facility Extension at such time, the Canadian Borrower shall prepay on such day the principal of outstanding Tranche A Canadian Facility Revolving Credit Loans made to the Canadian Borrower in an aggregate amount equal to such excess. If, after giving effect to the prepayment of all outstanding Tranche A Canadian Facility Revolving Credit Loans made to the Canadian Borrower, the aggregate amount of the Canadian Facility L/C Obligations exceeds the limit set forth in the previous sentence, the Canadian Borrower shall pay to the Administrative Agent at the Payment Office on such day an amount of cash and/or Cash Equivalents equal to the amount of such excess (up to a maximum amount equal to such Canadian L/C Obligations at such time), such cash and/or Cash Equivalents to be held as security for all obligations of the Canadian Borrower to the Canadian Facility Issuing Lenders and the Canadian Facility Lenders hereunder in a cash collateral account to be established by, and under the sole dominion and control of, the Administrative Agent.
(iv) Without duplication of any mandatory prepayment required under clause (i), (ii) or (iii) of subsection 4.4(c) above, on any day (other than during an Agent Advance Period) on which the Aggregate Tranche A-1 Canadian Borrower Credit Extensions exceeds the Dollar Equivalent of the Tranche A-1 Canadian Borrowing Base at such time, the Canadian Borrower shall prepay on such day the principal of outstanding Tranche A-1 Canadian Facility Revolving Credit Loan, in each case to the extent required and in an aggregate amount equal to such excess. To the extent that, at such time, the sum of ( A ) the Dollar Equivalent of the Tranche A Canadian Borrowing Base plus ( B ) the difference between ( 1 ) the Tranche A U.S. Borrowing Base minus ( 2 ) the Aggregate Tranche A U.S. Facility Extensions exceeds the Aggregate Tranche A Canadian Borrower Credit Extensions, such prepayment shall be made (subject to satisfaction of the conditions set forth in subsection 6.2(d) ) by refinancing such Tranche A-1 Canadian Facility Revolving Credit Loan with an equivalent amount of Tranche A Canadian Facility Revolving Credit Loans.
(v) On any day on which the Aggregate Tranche A Canadian Facility Lender Exposure exceeds the Dollar Equivalent of the Aggregate Tranche A Canadian Facility Commitment at such time, the Canadian Borrower and, with respect to Tranche A Canadian Facility Revolving Credit Loans made to U.S. Borrowers, the U.S. Borrowers, shall prepay on such day first the Agent Advances (if any) made as Tranche A Canadian Facility Revolving Credit Loans then outstanding to them and thereafter the principal of Tranche A Canadian
 
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Facility Revolving Credit Loans made to them in an amount equal to such excess. If, after giving effect to the prepayment of all outstanding Tranche A Canadian Facility Revolving Credit Loans, the aggregate amount of the Canadian Facility L/C Obligations exceeds the Aggregate Tranche A Canadian Facility Commitment at such time, the Canadian Borrower shall pay to the Administrative Agent at the Payment Office on such day an amount of cash and/or Cash Equivalents equal to the amount of such excess (up to a maximum amount equal to the Canadian Facility L/C Obligations at such time), such cash and/or Cash Equivalents to be held as security for all obligations of the Canadian Borrower to the Canadian Facility Issuing Lenders and the Tranche A Canadian Facility Lenders hereunder in a cash collateral account to be established by, and under the sole dominion and control of, the Administrative Agent.
(vi) On any day on which the Aggregate Tranche A-1 Canadian Facility Lender Exposure exceeds the Dollar Equivalent of the Aggregate Tranche A-1 Canadian Facility Commitment at such time, the Canadian Borrower shall prepay on such day the principal of Tranche A-1 Canadian Facility Revolving Credit Loans made to them in an amount equal to such excess.
(vii) On any day on which the Aggregate Tranche A U.S. Facility Lender Exposure exceeds the Aggregate Tranche A U.S. Facility Commitment at such time, the U.S. Borrowers shall prepay on such day first the Agent Advances (if any) made as Tranche A U.S. Facility Revolving Credit Loans then outstanding to them and thereafter the principal of Tranche A U.S. Facility Revolving Credit Loans in an amount equal to such excess. If, after giving effect to the prepayment of all outstanding Tranche A U.S. Facility Revolving Credit Loans, the aggregate amount of the U.S. Facility L/C Obligations exceeds the Tranche A U.S. Facility Commitment at such time, the U.S. Borrowers shall pay to the Administrative Agent at the Payment Office on such day an amount of cash and/or Cash Equivalents equal to the amount of such excess (up to a maximum amount equal to the U.S. Facility L/C Obligations at such time), such cash and/or Cash Equivalents to be held as security for all obligations of the U.S. Borrowers to the applicable U.S. Facility Issuing Lenders and the Tranche A U.S. Facility Lenders hereunder in a cash collateral account to be established by, and under the sole dominion and control of, the Administrative Agent.
(viii) On any day on which the Aggregate Tranche A-1 U.S. Facility Lender Exposure exceeds the Tranche A-1 U.S. Facility Commitment at such time, the U.S. Borrowers shall prepay on such day the principal of Tranche A-1 U.S. Facility Revolving Credit Loans in an amount equal to such excess.
(d) Notwithstanding the foregoing provisions of this subsection 4.4 , if at any time any prepayment of any Eurocurrency Loans or BA Equivalent Loans pursuant to subsection 4.4(a) would result, after giving effect to the procedures set forth in this Agreement, in the relevant Borrower incurring breakage costs under subsection 4.12 as a result of Eurocurrency Loans or BA Equivalent Loans being prepaid other than on the last day of an Interest Period with respect thereto, then, the relevant Borrower may, so long as no Default or Event of Default shall have occurred and be continuing, in its sole discretion, initially ( i ) deposit a portion (up to 100.0%) of the amounts that otherwise
 
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would have been paid in respect of such Eurocurrency Loans or BA Equivalent Loans with the Administrative Agent (which deposit must be equal in amount to the amount of such Eurocurrency Loans or BA Equivalent Loans not immediately prepaid), to be held as security for the obligations of the applicable Borrowers to make such prepayment pursuant to a cash collateral agreement to be entered into on terms reasonably satisfactory to the Administrative Agent with such cash collateral to be directly applied upon the first occurrence thereafter of the last day of an Interest Period with respect to such Eurocurrency Loans or BA Equivalent Loans (or such earlier date or dates as shall be requested by the Borrower Representative) or ( ii ) make a prepayment of the Revolving Credit Loans in accordance with subsection 4.4(a) with an amount equal to a portion (up to 100.0%) of the amounts that otherwise would have been paid in respect of such Eurocurrency Loans or BA Equivalent Loans (which prepayment, together with any deposits pursuant to clause (i) above, must be equal in amount to the amount of such Eurocurrency Loans or BA Equivalent Loans not immediately prepaid); provided that, notwithstanding anything in this Agreement to the contrary, none of the Borrowers may request any Extension of Credit under the Commitments that would reduce the aggregate amount of the Available Commitments to an amount that is less than the amount of such prepayment until the related portion of such Eurocurrency Loans or BA Equivalent Loans have been prepaid upon the first occurrence thereafter of the last day of an Interest Period with respect to such Eurocurrency Loans or BA Equivalent Loans; provided that, in the case of either clause (i) or (ii), such unpaid Eurocurrency Loans or BA Equivalent Loans shall continue to bear interest in accordance with subsection 4.1 until such unpaid Eurocurrency Loans or BA Equivalent Loans or the related portion of such Eurocurrency Loans or BA Equivalent Loans, as the case may be, have or has been prepaid.
(e) For avoidance of doubt, the Commitments shall not be correspondingly reduced by the amount of any prepayments of Revolving Credit Loans, payments of Reimbursement Obligations and cash collateralizations of L/C Obligations, in each case, made under subsection 4.4(a) , 4.4(b) or 4.4(c) .
(f) Notwithstanding anything to the contrary herein, this subsection 4.4 may be amended (and the Lenders hereby irrevocably authorize the Administrative Agent to enter into any such amendments) to the extent necessary to reflect differing amounts payable, and priorities of payments, to Lenders participating in any new classes or tranches of loans added pursuant to subsection 2.6 or 2.7 , as applicable.
4.5 Administrative Agent’s Fees; Other Fees .
(a) Each U.S. Borrower agrees to pay, or cause to be paid, to the Administrative Agent, for the account of each U.S. Facility Lender, a commitment fee for the period from and including the first day of the Commitment Period to the Maturity Date, computed based on the Commitment Fee Percentage on the average daily amount of the Available Commitment of such U.S. Facility Lender during the period for which payment is made, payable quarterly in arrears on the first day of each January, April, July and October and on the Maturity Date or such earlier date as the Commitments shall terminate as provided herein, commencing on [ — ].
 
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(b) The Canadian Borrower agrees to pay, or cause to be paid, to the Administrative Agent, for the account of each Canadian Facility Lender, a commitment fee for the period from and including the first day of the Commitment Period to the Maturity Date, computed based on the Commitment Fee Percentage on the average daily amount of the Available Commitment of such Canadian Facility Lender during the period for which payment is made, payable in arrears on the first day of each January, April, July and October and on the Maturity Date or such earlier date as the Commitments shall terminate as provided herein, commencing on [ — ].
(c) Each Borrower agrees to pay, or cause to be paid, to the Administrative Agent and the Other Representatives any fees in the amounts and on the dates previously agreed to in writing by any Loan Party, the Other Representatives and the Administrative Agent in connection with this Agreement.
4.6 Computation of Interest and Fees .
(a) Interest (other than interest based on the Prime Rate, Canadian Prime Rate or BA Rate) shall be calculated on the basis of a 360-day year for the actual days elapsed; and commitment fees and any other fees, discount proceeds and interest based on the Prime Rate, Canadian Prime Rate or BA Rate shall be calculated on the basis of a 365-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower Representative and the affected Lenders of each determination of a Eurocurrency Rate. Any change in the interest rate on a Loan resulting from a change in the ABR, the Canadian Base Rate, the Canadian Prime Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower Representative and the affected Lenders of the effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on each Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower Representative or any Lender, deliver to the Borrower Representative or such Lender a statement showing in reasonable detail the calculations used by the Administrative Agent in determining any interest rate pursuant to subsection 4.1, excluding any Eurocurrency Base Rate which is based upon the Telerate British Bankers Assoc. Interest Settlement Rates Page and any ABR Loan which is based upon the Prime Rate, the Canadian Base Rate or the Canadian Prime Rate.
4.7 Inability to Determine Interest Rate . If prior to the first day of any Interest Period, the Administrative Agent shall have determined (which determination shall be conclusive and binding upon each of the Borrowers) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurocurrency Rate with respect to any Eurocurrency Loan (the “ Affected Eurocurrency Rate ”) or the BA Rate (the “ Affected BA Rate ”) with respect to any BA Equivalent Loans for such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower Representative and the Lenders as soon as practicable thereafter. If such notice is given, ( a ) any
 
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Eurocurrency Loans or BA Equivalent Loans the rate of interest applicable to which is based on the Affected Eurocurrency Rate or the Affected BA Rate, as applicable, requested to be made on the first day of such Interest Period shall be made as ABR Loans in the applicable currency, ( b ) any Loans that were to have been converted on the first day of such Interest Period to or continued as Eurocurrency Loans or BA Equivalent Loans the rate of interest applicable to which is based on the Affected Eurocurrency Rate or the Affected BA Rate, as applicable, shall be converted to or continued as ABR Loans in the applicable currency, ( c ) as to the Swing Line Lender, as the case may be, such Lender’s cost of funding such Eurocurrency Loans or as reasonably determined by such Lender, plus the Applicable Margin hereunder and ( d ) any outstanding Eurocurrency Loans or BA Equivalent Loans that were to have been converted on the first day of such Interest Period to or continued as Eurocurrency Loans or BA Equivalent Loans the rate of interest applicable to which is based upon the Affected Eurocurrency Rate or Affected BA Rate and that are not otherwise permitted to be converted to or continued as ABR Loans in the applicable currency by subsection 4.2 shall, upon demand by the Lenders the Commitment Percentage of which aggregate greater than 50.0% of such U.S. Facility Revolving Credit Loan or Canadian Facility Revolving Credit Loan, as applicable, be immediately repaid by the applicable Borrower on the last day of the then current Interest Period with respect thereto together with accrued interest thereon or otherwise, at the option of the Borrower Representative, shall remain outstanding and bear interest at a rate which reflects, as to each of the Lenders, such Lender’s cost of funding such Eurocurrency Loans or BA Equivalent Loans as reasonably determined by such Lender, plus the Applicable Margin hereunder. If any such repayment occurs on a day which is not the last day of the then current Interest Period with respect to such affected Eurocurrency Loan or BA Equivalent Loan, the applicable Borrower shall pay to each of the Lenders such amounts, if any, as may be required pursuant to subsection 4.12 . Until such notice has been withdrawn by the Administrative Agent, no further Eurocurrency Loans or BA Equivalent Loans the rate of interest applicable to which is based upon the Affected Eurocurrency Rate or Affected BA Rate shall be made or continued as such, nor shall any of the Borrowers have the right to convert ABR Loans to Eurocurrency Loans or BA Equivalent Loans the rate of interest applicable to which is based upon the Affected Eurocurrency Rate or Affected BA Rate.
4.8 Pro Rata Treatment and Payments .
(a) Except as expressly otherwise provided for herein, each borrowing of Tranche A U.S. Facility Revolving Credit Loans, Tranche A-1 U.S. Facility Revolving Credit Loans, Tranche A Canadian Facility Revolving Credit Loans or Tranche A-1 Canadian Facility Revolving Credit Loans, as applicable (other than Swing Line Loans), by any of the applicable Borrowers from the Lenders hereunder shall be made, each payment by any of the Borrowers on account of any commitment fee in respect of the Tranche A U.S. Facility Commitments, Tranche A-1 U.S. Facility Commitments, Tranche A Canadian Facility Commitments or Tranche A-1 Canadian Facility Commitments, as applicable, hereunder shall be allocated by the Administrative Agent, and any reduction of the Tranche A U.S. Facility Commitments, Tranche A-1 U.S. Facility Commitments, Tranche A Canadian Facility Commitments or Tranche A-1 Canadian Facility Commitments of the Lenders, as applicable, shall be allocated by the Administrative Agent, in each case pro rata according to the Tranche A U.S. Facility Commitment Percentage, Tranche A-1 U.S. Facility Commitment Percentage, Tranche A
 
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Canadian Facility Commitment Percentage or Tranche A-1 Canadian Facility Commitment Percentage, as applicable, of the applicable Lenders. Except as expressly otherwise provided for herein, each payment (including each prepayment (but excluding payments made pursuant to subsection 2.6 , 2.7 , 4.5(c) , 4.9 , 4.10 , 4.11 , 4.12 , 4.13(d) , 4.17(c) or 11.1(f) )) by any of the applicable Borrowers on account of principal of and interest on any Tranche A U.S. Facility Revolving Credit Loans, Tranche A-1 U.S. Facility Revolving Credit Loans, Tranche A Canadian Facility Revolving Credit Loans or Tranche A-1 Canadian Facility Revolving Credit Loans, as applicable, shall be allocated by the Administrative Agent pro rata according to the respective outstanding principal amounts of such Revolving Credit Loans then held by the relevant Revolving Lenders, and each payment on account of principal of and interest on any loans made pursuant to any Tranche established after the date of this Agreement shall be allocated pro rata (or as may otherwise be provided for in the applicable amendment to this Agreement relating to such Tranche) among the Lenders with commitments under any Incremental Facility in respect thereof or with participations in such Tranche (in each case subject to any limitations on non-pro rata payments otherwise provided for in subsection 2.6(b) ). All payments (including prepayments) to be made by any of the Borrowers hereunder, whether on account of principal, interest, fees, Reimbursement Obligations or otherwise, shall be made without set-off or counterclaim and shall be made prior to 1:00 P.M., New York City time, on the due date thereof to the Administrative Agent for the account of the Lenders holding the relevant Loans or the L/C Participants, as the case may be, at the Administrative Agent’s office specified in subsection 11.2 , in Dollars or Canadian Dollars, as applicable and, whether in Dollars or Canadian Dollars, in immediately available funds. Payments received by the Administrative Agent after such time shall be deemed to have been received on the next Business Day. The Administrative Agent shall distribute such payments to such Lenders, if any such payment is received prior to 1:00 P.M., New York City time (or such later time as may be agreed to by the Administrative Agent), on a Business Day, in like funds as received prior to the end of such Business Day, and otherwise the Administrative Agent shall distribute such payment to such Lenders on the next succeeding Business Day. If any payment hereunder (other than payments on the Eurocurrency Loans or BA Equivalent Loans) becomes due and payable on a day other than a Business Day, the maturity of such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. If any payment on a Eurocurrency Loan or BA Equivalent Loans becomes due and payable on a day other than a Business Day, the maturity of such payment shall be extended to the next succeeding Business Day (and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension) unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. This subsection 4.8(a) may be amended in accordance with subsection 11.1(g) to the extent necessary to reflect differing amounts payable, and priorities of payments, to Lenders participating in any new classes or tranches of loans added pursuant to subsections 2.6 , 2.7 and 11.1(d) , as applicable. Unless the Administrative Agent shall have received notice from a Borrower prior to the date on which any payment is due from such Borrower to the Administrative Agent for the
 
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account of the Lenders, the Swing Line Lender or the relevant Issuing Lender hereunder that such Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent at a rate equal to the daily average Federal Funds Effective Rate or the rate set by the Bank of Canada for settlement of Canadian Dollar interbank obligations, as applicable, and as quoted by the Administrative Agent.
(b) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its Commitment Percentage of such borrowing available to such Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent and the Administrative Agent may, in reliance upon such assumption, make available to any Borrower in respect of such borrowing a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent on demand, such amount with interest thereon at a rate equal to the daily average Federal Funds Effective Rate or the rate set by the Bank of Canada for settlement of Canadian Dollar interbank obligations, as applicable, and as quoted by the Administrative Agent, in each case for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this subsection 4.8(b) shall be conclusive in the absence of manifest error. If such Lender’s Commitment Percentage of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, ( x ) the Administrative Agent shall notify the Borrower Representative of the failure of such Lender to make such amount available to the Administrative Agent and the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to such Loans pursuant to subsection 4.1 on demand, from such Borrower and ( y ) then such Borrower may, without waiving or limiting any rights or remedies it may have against such Lender hereunder or under applicable law or otherwise, borrow a like amount on an unsecured basis from any commercial bank for a period ending on the date upon which such Lender does in fact make such borrowing available; provided that at the time such borrowing is made and at all times while such amount is outstanding such Borrower would be permitted to borrow such amount pursuant to subsection 2.1 .
4.9 Illegality . Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof occurring after the Closing Date shall make it unlawful for any Lender to make or maintain any Eurocurrency Loans or BA Equivalent Loans as contemplated by this Agreement (“ Affected Loans ”), ( a ) such Lender shall promptly give written notice of such circumstances to the Borrower Representative and the Administrative Agent (which notice shall be withdrawn whenever such circumstances no
 
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longer exist), ( b ) the commitment of such Lender hereunder to make Affected Loans, continue Affected Loans as such and convert an ABR Loan to an Affected Loan shall forthwith be cancelled and, until such time as it shall no longer be unlawful for such Lender to make or maintain such Affected Loans, such Lender shall then have a commitment only to make an ABR Loan (or a Swing Line Loan) when an Affected Loan is requested (to the extent otherwise permitted by subsection 4.2 ), ( c ) such Lender’s Loans then outstanding as Affected Loans, if any, shall be converted automatically to ABR Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law (to the extent otherwise permitted by subsection 4.2 ) and ( d ) such Lender’s Loans then outstanding as Affected Loans, if any, not otherwise permitted to be converted to ABR Loans by subsection 4.2 (whether because such Loans are denominated in Canadian Dollars or otherwise), shall upon notice to the Parent Borrower be prepaid with accrued interest thereon on the last of the then current Interest Period with respect thereto (or such earlier date as may be required by such Requirement of Law). If any such conversion or prepayment of an Affected Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the applicable Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to subsection 4.12 .
4.10 Requirements of Law .
(a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof applicable to any Lender or Issuing Lender, or compliance by any Lender or Issuing Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority, in each case made subsequent to the Closing Date (or, if later, the date on which such Lender becomes a Lender or such Issuing Lender becomes an Issuing Lender):
(i) shall subject such Lender or Issuing Lender to any tax of any kind whatsoever with respect to any Letter of Credit Request, any Eurocurrency Loans or any BA Equivalent Loans made or maintained by it or its obligation to make or maintain Eurocurrency Loans or BA Equivalent Loans, or change the basis of taxation of payments to such Lender or Issuing Lender in respect thereof, in each case except for Non-Excluded Taxes, Taxes imposed under FATCA and taxes measured by or imposed upon the overall net income, or franchise taxes, or taxes measured by or imposed upon overall capital or net worth, or branch taxes (in the case of such capital, net worth or branch taxes, imposed in lieu of such net income tax), of such Lender or Issuing Lender or its applicable lending office, branch, or any affiliate thereof;
(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender or Issuing Lender which is not otherwise included in the determination of the Eurocurrency Rate or BA Rate, as the case may be, hereunder; or
(iii) shall impose on such Lender or Issuing Lender any other condition (excluding any tax of any kind whatsoever);
 
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and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender or Issuing Lender deems to be material, of making, converting into, continuing or maintaining Eurocurrency Loans or BA Equivalent Loans or issuing or participating in Letters of Credit or the cost to an Issuing Lender of issuing or maintaining Letters of Credit or to reduce any amount receivable hereunder in respect thereof, then, in any such case, upon notice to the Borrower Representative from such Lender or Issuing Lender through the Administrative Agent in accordance herewith, the applicable Borrower shall promptly pay such Lender or Issuing Lender upon its demand, any additional amounts necessary to compensate such Lender or Issuing Lender for such increased cost or reduced amount receivable with respect to such Eurocurrency Loans, BA Equivalent Loans or Letters of Credit, provided that, in any such case, such Borrower may elect to convert the Eurocurrency Loans and/or BA Equivalent Loans made by such Lender hereunder to ABR Loans in the applicable currency by giving the Administrative Agent at least one Business Day’s (or such shorter period as may be agreed to by the Administrative Agent) notice of such election, in which case the applicable Borrower shall promptly pay to such Lender, upon demand, without duplication, amounts theretofore required to be paid to such Lender pursuant to this subsection 4.10(a) and such amounts, if any, as may be required pursuant to subsection 4.12 . If any Lender or Issuing Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall provide prompt notice thereof to the Borrower Representative, through the Administrative Agent certifying ( x ) that one of the events described in this paragraph (a) has occurred and describing in reasonable detail the nature of such event, ( y ) as to the increased cost or reduced amount resulting from such event and ( z ) as to the additional amount demanded by such Lender or Issuing Lender and a reasonably detailed explanation of the calculation thereof. Such a certificate as to any additional amounts payable pursuant to this subsection submitted by such Lender or Issuing Lender through the Administrative Agent to the Borrower Representative shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this subsection 4.10(a) , the Borrowers shall not be required to compensate a Lender ( i ) pursuant to this subsection 4.10(a) for any amounts incurred more than six months prior to the date that such Lender notifies the Borrower Representative of such Lender’s intention to claim compensation therefor (except that, if the adoption of or change in any Requirement of Law or in the interpretation or application thereof giving rise to such increased costs or reductions is retroactive, then provided such Lender shall, within six months of such adoption, change, interpretation or application, have notified the Borrower Representative of such Lender’s intention to claim compensation therefor, the six-month period first referred to in this sentence shall be extended to include the period of retroactive effect thereof) and ( ii ) for any increased costs, if such Lender is applying this provision to the Borrowers in a manner that is inconsistent with its application of “increased cost” or other similar provisions under other credit agreements to similarly situated borrowers. This subsection 4.10(a) shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
(b) If any Lender or Issuing Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or liquidity or in the interpretation or application thereof or compliance by such Lender or Issuing Lender or any corporation controlling such Lender or Issuing Lender with any request or
 
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directive regarding capital adequacy or liquidity (whether or not having the force of law) from any Governmental Authority, in each case, made subsequent to the Closing Date, does or shall have the effect of reducing the rate of return on such Lender’s, Issuing Lender’s or corporation’s capital as a consequence of such Lender’s or Issuing Lender’s obligations hereunder or in respect of any Letter of Credit to a level below that which such Lender, Issuing Lender, or corporation could have achieved but for such change or compliance (taking into consideration such Lender’s, Issuing Lender’s or corporation’s policies with respect to capital adequacy or liquidity) by an amount deemed by such Lender or Issuing Lender to be material, then from time to time, within 10 Business Days after submission by such Lender or Issuing Lender to the Borrower Representative (with a copy to the Administrative Agent) of a written request therefor certifying ( x ) that one of the events described in this paragraph (b) has occurred and describing in reasonable detail the nature of such event, ( y ) as to the reduction of the rate of return on capital resulting from such event and ( z ) as to the additional amount or amounts demanded by such Lender, Issuing Lender or corporation and a reasonably detailed explanation of the calculation thereof, the applicable Borrower shall pay to such Lender or Issuing Lender such additional amount or amounts as will compensate such Lender, Issuing Lender or corporation for such reduction. Such a certificate as to any additional amounts payable pursuant to this subsection submitted by such Lender or Issuing Lender through the Administrative Agent to the Borrower Representative shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this subsection 4.10(b) , the Borrowers shall not be required to compensate a Lender ( i ) pursuant to this subsection 4.10(b) for any amounts incurred more than six months prior to the date that such Lender notifies the Borrower Representative of such Lender’s intention to claim compensation therefor (except that, if the adoption of or change in any Requirement of Law or in the interpretation or application thereof giving rise to such increased costs or reductions is retroactive, then provided such Lender shall, within six months of such adoption, change, interpretation or application, have notified the Borrower Representative of such Lender’s intention to claim compensation therefor, the six-month period first referred to in this sentence shall be extended to include the period of retroactive effect thereof) and ( ii ) for any increased costs, if such Lender is applying this provision to the Borrowers in a manner that is inconsistent with its application of “increased cost” or other similar provisions under other credit agreements to similarly situated borrowers. This subsection 4.10(b) shall survive the termination of this Agreement and the payment of the Revolving Credit Loans and all other amounts payable hereunder.
(c) Notwithstanding anything to the contrary in this subsection 4.10 , the Dodd Frank Wall Street Reform and Consumer Protection Act, and all requests, rules, regulations, guidelines and directives promulgated thereunder or issued in connection therewith, and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, in each case shall be deemed to have been enacted, adopted or issued, as applicable, subsequent to the Closing Date for all purposes herein. This subsection 4.10(c) shall survive the termination of this Agreement and the payment of the Revolving Credit Loans and all other amounts payable hereunder.
 
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4.11 Taxes .
(a) Except as provided below in this subsection or as required by law (which, for purposes of this subsection 4.11 , shall include FATCA), all payments made by each of the Loan Parties under this Agreement, any other Loan Document and any Notes shall be made free and clear of, and without deduction or withholding for or on account of any Taxes; provided that if any Non-Excluded Taxes are required to be withheld from any amounts payable by any Loan Party or the Administrative Agent to the Administrative Agent or any Lender hereunder or under any Notes, the amounts so payable by such Loan Party shall be increased to the extent necessary to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement; provided , however , that each Loan Party shall be entitled to deduct and withhold, and such Loan Party shall not be required to indemnify for, any Non-Excluded Taxes, and any such amounts payable by such Loan Party or the Administrative Agent to or for the account of any Agent or Lender, shall not be increased ( x ) if such Agent or Lender fails to comply with the requirements of paragraph (b) of this subsection 4.11 or subsection 4.13 or 4.15 , or ( y ) with respect to any Non-Excluded Taxes imposed in connection with the payment of any fees paid under this Agreement or with respect to any Non-Excluded Taxes imposed by the United States or any state or political subdivision thereof or the government of Canada or any province thereof, unless such Non-Excluded Taxes are imposed ( 1 ) as a result of a change in treaty, law or regulation that occurred after such Agent became an Agent hereunder or such Lender became a Lender hereunder (or, if such Agent or Lender is a non-U.S. intermediary or flow-through entity for U.S. federal income tax purposes, after the relevant beneficiary or member of such Agent or Lender became such a beneficiary or member, if later) (any such change, at such time, a “ Change in Law ”) or ( 2 ) on a Person that is an assignee whose assignor was entitled to receive additional amounts with respect to payments made by such Loan Party, at the time such assignment was effective, as a result of Change in Law that occurred after the Closing Date and such assignee is subject to the same Change in Law with respect to payments from such Loan Party, provided that in no event shall such additional amounts under this clause (2) exceed the additional amounts that the assignor was entitled to receive at the time such assignment was effective. Whenever any Non-Excluded Taxes are payable by any Loan Party, as promptly as possible thereafter such Loan Party shall send to the Administrative Agent for its own account or for the account of such Lender or Agent, as the case may be, a certified copy of an original official receipt (or other documentary evidence of such payment reasonably acceptable to the Administrative Agent) received by such Loan Party showing payment thereof. If any Loan Party fails to pay any Non-Excluded Taxes when due to the appropriate Governmental Authority in accordance with applicable law or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, such Loan Party shall indemnify the Administrative Agent, the Lenders and the Agents for any incremental Taxes, interest or penalties that may become payable by the Administrative Agent or any Lender or Agent as a result of any such failure. The agreements in this subsection 4.11 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
 
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(1) Each Agent and each Lender that is a “United States person” (within the meaning of Section 7701(a)(30) of the Code) shall deliver to the Borrower Representative and the Administrative Agent on or prior to the Closing Date or, in the case of an Agent or Lender that is an assignee or transferee of an interest under this Agreement pursuant to subsection 11.6 , on the date of such assignment or transfer to such Agent or Lender, two accurate and complete original signed copies of Internal Revenue Service Form W-9 (or successor form), in each case certifying that such Agent or Lender is a “United States person” (within the meaning of Section 7701(a)(30) of the Code) and to such Agent’s or Lender’s entitlement as of such date to a complete exemption from United States federal backup withholding Tax with respect to payments to be made under this Agreement and under any Note. Each Agent and each Lender that is not a “United States person” (within the meaning of Section 7701(a)(30) of the Code) shall deliver to the Borrower Representative and the Administrative Agent on or prior to the Closing Date or, in the case of an Agent or Lender that is an assignee or transferee of an interest under this Agreement pursuant to subsection 11.6 , on the date of such assignment or transfer to such Agent or Lender, ( i ) two accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (claiming the benefits of an income tax treaty) (or successor forms), in each case certifying to such Agent’s or Lender’s entitlement as of such date to a complete exemption from United States federal withholding tax with respect to payments to be made under this Agreement and under any Note, ( ii ) if such Agent or Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (claiming the benefits of an income tax treaty) (or successor forms) pursuant to clause (i) above, ( x ) two certificates substantially in the form of Exhibit J (any such certificate, a “ U.S. Tax Compliance Certificate ”) and ( y ) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (claiming the benefits of the portfolio interest exemption) (or successor form) certifying to such Agent’s or Lender’s entitlement as of such date to a complete exemption from United States federal withholding tax with respect to payments of interest to be made under this Agreement and under any Note or ( iii ) if such Agent or Lender is a non-U.S. intermediary or flow-through entity for U.S. federal income tax purposes, two accurate and complete signed copies of Internal Revenue Service Form W-8IMY (and all necessary attachments, including to the extent applicable, U.S. Tax Compliance Certificates) certifying to such Agent’s or Lender’s entitlement as of such date to a complete exemption from United States federal withholding tax with respect to payments to be made under this Agreement and under any Note (or, to the extent the beneficial owners of such non-U.S. intermediary or flow-through entity are ( A ) non-U.S. persons claiming portfolio interest treatment, a complete exemption from United States withholding tax with
 
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respect to interest payments or ( B ) United States persons, a complete exemption from United States federal backup withholding tax), unless, in each case, such Person is an assignee whose assignor was entitled to receive additional amounts with respect to payments made by the applicable Loan Party, at the time such assignment was effective, as a result of a Change in Law that occurred after the Closing Date and such assignee is subject to the same Change in Law with respect to payments from the applicable Loan Party, provided that in no event shall such additional amounts exceed the additional amounts that the assignor was entitled to receive at the time such assignment was effective. In addition, each Agent and Lender agrees that from time to time after the Closing Date, when the passage of time or a change in circumstances renders the previous certification obsolete or inaccurate, such Agent or Lender shall deliver to the Borrower Representative and the Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form W-9, Internal Revenue Service Form W-8ECI, Form W-8BEN (claiming the benefits of an income tax treaty), or Form W-8BEN (claiming the benefits of the portfolio interest exemption) and a U.S. Tax Compliance Certificate, or Form W-8IMY (with respect to a non-U.S. intermediary or flow-through entity), as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Agent or Lender to a continued exemption from United States federal withholding tax with respect to payments under this Agreement and any Note (or, to the extent the beneficial owners of such non-U.S. intermediary or flow-through entity are ( A ) non-U.S. persons claiming portfolio interest treatment, a complete exemption from United States withholding tax with respect to interest payments or ( B ) United States persons, a complete exemption from United States federal backup withholding tax), unless, in each case ( 1 ) there has been a Change in Law that occurs after the date such Agent or Lender becomes an Agent or Lender hereunder (or after the date the relevant beneficiary or member in the case of a Lender that is a non-U.S. intermediary or flow-through entity for U.S. federal income tax purposes becomes a beneficiary or member, if later) which renders all such forms inapplicable or which would prevent such Agent or Lender from duly completing and delivering any such form with respect to it, in which case such Agent or Lender shall promptly notify the Borrower Representative and the Administrative Agent of its inability to deliver any such form or ( 2 ) such Person is an assignee whose assignor was entitled to receive additional amounts with respect to payments made by a Loan Party, at the time such assignment was effective, as a result of a Change in Law that occurred after the Closing Date and such assignee is subject to the same Change in Law with respect to payments from a Loan Party, provided that in no event shall such additional amounts under this clause (2) exceed the additional amounts that the assignor was entitled to receive at the time such assignment was effective.
 
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(b) Each Agent and Lender shall, upon request by the Borrower Representative, deliver to the Borrower Representative or the applicable Governmental Authority, as the case may be, any form or certificate required in order that any payment by any Loan Party under this Agreement or any Note to such Agent or Lender may be made free and clear of, and without deduction or withholding for or on account of any Taxes (including any United States withholding taxes under FATCA) (or to allow any such deduction or withholding to be at a reduced rate), provided that such Agent or Lender is legally entitled to complete, execute and deliver such form or certificate. Each Person that shall become a Lender or a Participant pursuant to subsection 11.6 shall, upon the effectiveness of the related transfer, be required to provide all of the forms, certifications and statements pursuant to this subsection 4.11 , provided that in the case of a Participant the obligations of such Participant pursuant to paragraph (b) or (c) of this subsection 4.11 shall be determined as if such Participant were a Lender except that such Participant shall furnish all such required forms, certifications and statements to the Lender from which the related participation shall have been purchased.
4.12 Indemnity . Each U.S. Borrower agrees to indemnify each U.S. Facility Lender in respect of Extensions of Credit made, or requested to be made, to the U.S. Borrowers, each U.S. Borrower agrees to indemnify each Canadian Facility Lender in respect of Extensions of Credit made, or requested to be made, by the Canadian Facility Lenders to the U.S. Borrowers, and the Canadian Borrower agrees to indemnify each Canadian Facility Lender in respect of Extensions of Credit made, or requested to be made, to the Canadian Borrower, and in each case, to hold each such Lender harmless from any loss or expense which such Lender may sustain or incur (other than through such Lender’s gross negligence or willful misconduct) as a consequence of ( a ) default by such Borrower in making a borrowing of, conversion into or continuation of Eurocurrency Loans or BA Equivalent Loans after the Borrower Representative has given a notice requesting the same in accordance with the provisions of this Agreement, ( b ) default by such Borrower in making any prepayment or conversion of Eurocurrency Loans or BA Equivalent Loans after the Borrower Representative has given a notice thereof in accordance with the provisions of this Agreement or ( c ) the making of a payment or prepayment of Eurocurrency Loans or BA Equivalent Loans or the conversion of Eurocurrency Loans or BA Equivalent Loans on a day which is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of ( i ) the amount of interest which would have accrued on the amount so prepaid, or converted, or not so borrowed, converted or continued, for the period from the date of such prepayment or conversion or of such failure to borrow, convert or continue to the last day of the applicable Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Eurocurrency Loans or BA Equivalent Loans, as applicable, provided for herein (excluding, however, the Applicable Margin included therein, if any) over ( ii ) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurocurrency market or the Canadian interbank market, as applicable. If any Lender becomes entitled to claim any amounts under the indemnity contained in this subsection 4.12 , it shall provide prompt notice thereof to the Borrower Representative, through the Administrative Agent certifying ( x ) that one of the events described in clause (a), (b) or (c) has occurred and describing in reasonable detail the nature of such event, ( y ) as to the loss or expense sustained or incurred
 
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by such Lender as a consequence thereof and ( z ) as to the amount for which such Lender seeks indemnification hereunder and a reasonably detailed explanation of the calculation thereof. Such a certificate as to any indemnification pursuant to this subsection submitted by such Lender, through the Administrative Agent to the Borrower Representative shall be conclusive in the absence of manifest error. This subsection 4.12 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
4.13 Certain Rules Relating to the Payment of Additional Amounts .
(a) Upon the request, and at the expense, of the applicable Borrower, each Agent, Lender and Issuing Lender to which any Borrower is required to pay any additional amount pursuant to subsection 4.10 or 4.11 , and any Participant in respect of whose participation such payment is required, shall reasonably afford such Borrower the opportunity to contest, and reasonably cooperate with such Borrower in contesting, the imposition of any Non-Excluded Taxes giving rise to such payment; provided that ( i ) such Agent, Lender or Issuing Lender shall not be required to afford such Borrower the opportunity to so contest unless such Borrower shall have confirmed in writing to such Agent, Lender or Issuing Lender its obligation to pay such amounts pursuant to this Agreement and ( ii ) such Borrower shall reimburse such Agent, Lender or Issuing Lender for its reasonable attorneys’ and accountants’ fees and disbursements incurred in so cooperating with such Borrower in contesting the imposition of such Non-Excluded Taxes; provided , however , that notwithstanding the foregoing no Agent, Lender or Issuing Lender shall be required to afford such Borrower the opportunity to contest, or cooperate with such Borrower in contesting, the imposition of any Non-Excluded Taxes, if such Agent, Lender or Issuing Lender in its sole discretion in good faith determines that to do so would have an adverse effect on it.
(b) If a Lender or Issuing Lender changes its applicable lending office (other than (i) pursuant to paragraph (c) below or (ii) after an Event of Default under subsection 9(a) or 9(f) has occurred and is continuing) and the effect of such change, as of the date of such change, would be to cause any Borrower to become obligated to pay any additional amount under subsection 4.10 or 4.11 , such Borrower shall not be obligated to pay such additional amount.
(c) If a condition or an event occurs which would, or would upon the passage of time or giving of notice, result in the payment of any additional amount to any Lender or Issuing Lender by any Borrower pursuant to subsection 4.10 or 4.11 , such Lender or Issuing Lender shall promptly after becoming aware of such event or condition notify the Borrower Representative and the Administrative Agent and shall take such steps as may reasonably be available to it to mitigate the effects of such condition or event (which shall include efforts to rebook the Loans or issued Letters of Credit, as the case may be, held by such Lender or Issuing Lender at another lending office, or through another branch or an affiliate, of such Lender or Issuing Lender); provided that such Lender or Issuing Lender shall not be required to take any step that, in its reasonable judgment, would be materially disadvantageous to its business or operations or would require it to incur additional costs (unless such Borrower agrees to reimburse such Lender or Issuing Lender for the reasonable incremental out-of-pocket costs thereof).
 
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(d) If any of the Borrowers shall become obligated to pay additional amounts pursuant to subsection 4.10 or 4.11 and any affected Lender shall not have promptly taken steps necessary to avoid the need for payments under subsection 4.10 or 4.11 , the applicable Borrower shall have the right, for so long as such obligation remains, ( i ) with the assistance of the Administrative Agent, to seek one or more substitute Lenders reasonably satisfactory to the Administrative Agent, and such Borrower to purchase the affected Loan, in whole or in part, at an aggregate price no less than such Loan’s principal amount plus accrued interest, and assume the affected obligations under this Agreement, or ( ii ) so long as no Default or Event of Default then exists or will exist immediately after giving effect to the respective prepayment, upon at least four Business Days’ (or such shorter period as may be agreed to by the Administrative Agent) irrevocable notice to the Administrative Agent to prepay the affected Loan, in whole or in part, subject to subsection 4.12 , without premium or penalty. In the case of the substitution of a Lender, then, the Parent Borrower, any other applicable Borrower, the Administrative Agent, the affected Lender, and any substitute Lender shall execute and deliver an appropriately completed Assignment and Acceptance pursuant to subsection 11.6(b) to effect the assignment of rights to, and the assumption of obligations by, the substitute Lender; provided that any fees required to be paid by subsection 11.6(b) in connection with such assignment shall be paid by the Parent Borrower or the substitute Lender. In the case of a prepayment of an affected Loan, the amount specified in the notice shall be due and payable on the date specified therein, together with any accrued interest to such date on the amount prepaid. In the case of each of the substitution of a Lender and of the prepayment of an affected Loan, the applicable Borrower shall first pay the affected Lender any additional amounts owing under subsections 4.10 and 4.11 (as well as any commitment fees and other amounts then due and owing to such Lender, including any amounts under this subsection 4.13 ) prior to such substitution or prepayment.
(e) If any Agent, Lender or any Issuing Lender receives a refund directly attributable to taxes for which any Borrower has made additional payments pursuant to subsection 4.10(a) or 4.11(a) , such Agent, such Lender or such Issuing Lender, as the case may be, shall promptly pay such refund (together with any interest with respect thereto received from the relevant taxing authority, but net of any reasonable cost incurred in connection therewith) to such Borrower; provided , however , that the applicable Borrower agrees promptly to return such refund (together with any interest with respect thereto due to the relevant taxing authority) (free of all Non-Excluded Taxes) to such Agent, Issuing Lender or the applicable Lender, as the case may be, upon receipt of a notice that such refund is required to be repaid to the relevant taxing authority.
(f) The obligations of any Agent, Lender, Issuing Lender or Participant under this subsection 4.13 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
 
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4.14 Controls on Prepayment if Aggregate Outstanding Revolving Credit Exceeds Aggregate Commitments .
(a) The Borrower Representatives will implement and maintain internal controls to monitor the borrowings and repayments of Loans by the Borrowers and the issuance of and drawings under Letters of Credit, with the object of preventing any request for an Extension of Credit that would result in the Aggregate Credit Extensions with respect to all of the Lenders (including the Swing Line Lender) being in excess of the aggregate Commitments then in effect and of promptly identifying any circumstance where, by reason of changes in exchange rates, the Aggregate Credit Extensions with respect to all of the Lenders (including the Swing Line Lender) exceeds the aggregate Commitments then in effect.
(b) The Administrative Agent will calculate each Tranche A Canadian Facility Lender Exposure, Tranche A-1 Canadian Facility Lender Exposure, Tranche A U.S. Facility Lender Exposure and Tranche A-1 U.S. Facility Lender Exposure from time to time, and in any event not less frequently than once during each calendar month. In making such calculations, the Administrative Agent will rely on the information most recently received by it from the Swing Line Lender in respect of outstanding Swing Line Loans and from the Issuing Lenders in respect of outstanding L/C Obligations.
4.15 Canadian Facility Lenders .
(a) Any Lender that holds any commitment or makes or holds any Extension of Credit to the Canadian Borrower (such Lender, a “ Canadian Extender of Credit ”) will at all times be a Canadian Qualified Lender, unless an Event of Default has occurred and is continuing. To the extent legally entitled to do so, the Administrative Agent and each Canadian Extender of Credit shall, upon written request by the Borrower Representative, deliver to it or the applicable governmental or taxing authority, any form or certificate required in order that any payment by the Canadian Borrower under this Agreement or any Notes to, or for the account of, such Person may be made free and clear of, and without deduction or withholding for or on account of, any Non-Excluded Taxes, provided that in determining the reasonableness of such a request such Person shall be entitled to consider the cost (to the extent unreimbursed by a Borrower) which would be imposed on such Person of complying with such request.
(b) A Canadian Facility Lender may change its Affiliates or branches acting as Canadian Facility Lender hereunder but only pursuant to an assignment in form and substance reasonably satisfactory to the Administrative Agent (with the consent of the Canadian Borrower), where the respective assignee represents and warrants that it is an Affiliate or branch of the respective Canadian Facility Lender and represents and warrants that it is a Canadian Qualified Lender and will act directly as a Canadian Facility Lender with respect to the Canadian Facility Commitment of the respective Canadian Facility Lender.
 
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4.16 Cash Receipts .
(a) Schedule 4.16 lists as of the Closing Date with respect to each depository where a DDA and Concentration Account is located ( i ) the name and address of such depository, ( ii ) the account number(s) maintained with such depository and ( iii ) a contact person at such depository.
(b) Each Loan Party that is a U.S. Borrower or U.S. Subsidiary Guarantor shall ( i ) enter into a concentration account control agreement (each, a “ Concentration Account Agreement ”) with respect to each Concentration Account maintained by such Loan Party, in form reasonably satisfactory to the Administrative Agent, and instruct each depository institution for a DDA of such Loan Party to cause all amounts on deposit in excess of the Retained Amount and available at the close of each Business Day in such DDA to be swept to a Concentration Account no less frequently than on a daily basis, ( ii ) either ( A ) instruct all Account Debtors of such Loan Party that remit payments of Accounts of such Account Debtors regularly by check pursuant to arrangements with such Loan Party to remit all such payments to the applicable “P.O. Boxes” or “Lockbox Addresses” with respect to the applicable DDA or Concentration Account, which remittances shall be collected by the applicable bank and deposited in the applicable DDA or Concentration Account, ( B ) cause the checks of any such Account Debtor in payment of any Account to be deposited in the applicable DDA or Concentration Account within two Business Days after such check is received by such Loan Party, or ( C ) cause amounts constituting payments on Accounts that are deposited in other accounts (including any accounts where they are commingled with other funds), to the extent that the balance in any such other account exceeds the Retained Amount, to be swept within one Business Day of becoming available to a Concentration Account, and ( iii ) deliver to the Administrative Agent Credit Card Notifications executed on behalf of each such Loan Party and delivered to each applicable Credit Card Issuer and Credit Card Processor, in form reasonably satisfactory to the Administrative Agent. All amounts received by a U.S. Borrower or a U.S. Subsidiary Guarantor in respect of any Account, in addition to all other cash received from any other source, shall upon receipt of such amount or cash (other than ( x ) any such amount to be deposited in Excluded Accounts and ( y ) Accounts or payment thereof excluded from the Collateral pursuant to any Security Document, including Excluded Assets) be deposited into a DDA or a Concentration Account. Each Loan Party agrees that it will not cause proceeds of such DDAs to be directed other than as set forth in clause (ii) of this paragraph (b), unless such proceeds are swept within one Business Day of becoming available to a Concentration Account.
(c) Each Canadian Loan Party shall (i) enter into a concentration account control agreement (each, a “ Canadian Concentration Account Agreement ”) with respect to each Concentration Account maintained by a Canadian Loan Party, in form reasonably satisfactory to the Administrative Agent, and instruct each depository institution for a DDA of such Canadian Loan Party to cause all amounts on deposit in excess of the Retained Amount and available at the close of each Business Day in such DDA to be swept to a Concentration Account of a Canadian Loan Party no less frequently than on a daily basis, (ii) either (A) instruct all Account Debtors of such Canadian Loan Party that remit payments of Accounts of such Account Debtors regularly by check pursuant to
 
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arrangements with such Canadian Loan Party to remit all such payments to the applicable “P.O. Boxes” or “Lockbox Addresses” with respect to the applicable DDA or Concentration Account, which remittances shall be collected by the applicable bank and deposited in the applicable DDA or Concentration Account, (B) cause the checks of any such Account Debtor in payment of any Account to be deposited in the applicable DDA or Concentration Account within two Business Days after such check is received by such Canadian Loan Party, or (C) cause amounts constituting payments on Accounts that are deposited in other accounts (including any accounts where they are commingled with other funds), to the extent that the balance in any such other account exceeds the Retained Amount, to be swept within one Business Day of becoming available to a Concentration Account of such Canadian Loan Party, and (iii) deliver to the Administrative Agent Credit Card Notifications executed on behalf of each such Canadian Loan Party and delivered to each applicable Credit Card Issuer and Credit Card Processor, in form reasonably satisfactory to the Administrative Agent. All amounts received by a Canadian Loan Party in respect of any Account, in addition to all other cash received from any other source, shall upon receipt of such amount or cash (other than (x) any such amount to be deposited in Excluded Accounts and (y) Accounts or payments thereof excluded from the Collateral pursuant to any Security Document, including Excluded Assets) be deposited into a DDA or Concentration Account of a Canadian Loan Party. Each Loan Party agrees that it will not cause proceeds of such DDAs to be directed other than as set forth in clause (ii) of this paragraph (c), unless such proceeds are swept within one Business Day of becoming available to a Concentration Account of a Canadian Loan Party.
(d) (i) Each Concentration Account Agreement shall require, during the continuance of a Cash Dominion Period and following delivery of notice of commencement thereof from the Administrative Agent to the Parent Borrower, the ACH or wire transfer no less frequently than once per Business Day (unless the U.S. Facility Commitments have been terminated and the monetary obligations then due and owing hereunder and under the other Loan Documents have been paid in full and all U.S. Facility Letters of Credit have either been terminated or expired (unless cash collateralized or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent)), of all available cash balances and cash receipts, including the then contents or then entire available ledger balance of each Concentration Account subject to such Concentration Account Agreement, net of such minimum balance, if any, required by the bank at which such Concentration Account is maintained to an account maintained by the Administrative Agent at [ — ] (or another bank of recognized standing reasonably selected by the Administrative Agent with the reasonable consent of the Borrower Representative) (the “ U.S. Core Concentration Account ”). Each Loan Party agrees that it will not cause proceeds of any Concentration Account subject to a Concentration Account Agreement to be otherwise redirected.
(ii) Each Canadian Concentration Account Agreement shall require, during the continuance of a Cash Dominion Period and following delivery of notice of commencement thereof from the Administrative Agent to the Parent Borrower, the ACH or wire transfer no less frequently than once per Business Day (unless the Canadian Facility Commitments have been terminated and the
 
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monetary obligations then due and owing hereunder and under the other Loan Documents have been paid in full and all Canadian Facility Letters of Credit have either been terminated or expired (unless cash collateralized or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent)), of all available cash balances and cash receipts, including the then contents or then entire available ledger balance of each Concentration Account subject to such Canadian Concentration Account Agreement, net of such minimum balance, if any, required by the bank at which such Concentration Account is maintained to an account maintained by the Administrative Agent at [ — ] (or another bank of recognized standing reasonably selected by the Administrative Agent with the reasonable consent of the Borrower Representative) (the “ Canadian Core Concentration Accoun t”). Each Loan Party agrees that it will not cause proceeds of any Concentration Account subject to a Canadian Concentration Account Agreement to be otherwise redirected.
(e) (i) At any time other than during the continuance of an Event of Default, all collected amounts received in the U.S. Core Concentration Account shall be distributed and applied on a daily basis in the following order (in each case, to the extent the Administrative Agent has actual knowledge of the amounts owing or outstanding as described below and any applications otherwise described in following clauses (x) and (y), and after giving effect to the application of any such amounts ( x ) otherwise required pursuant to subsection 4.4(b) , ( y ) constituting proceeds from any Collateral otherwise required pursuant to the terms of the respective Security Document or (z) otherwise required by any applicable Intercreditor Agreement): ( 1 )  first , to the payment (on a ratable basis) of any outstanding expenses actually due and payable to the Administrative Agent and/or the ABL Collateral Agent under any of the Loan Documents and to repay or prepay outstanding Swing Line Loans and Agent Advances made as Tranche A U.S. Facility Revolving Credit Loans (with accrued interest); ( 2 )  second , to pay (on a ratable basis) all outstanding expenses actually due and payable to each U.S. Facility Issuing Lender under any of the Loan Documents and to repay all outstanding U.S. Borrower unreimbursed outstanding drawn amounts under Letters of Credit and all interest thereon; ( 3 )  third , to pay (on a ratable basis) all accrued and unpaid interest actually due and payable on the Tranche A U.S. Facility Revolving Credit Loans and Tranche A Canadian Facility Revolving Credit Loans made to the U.S. Borrowers and all accrued and unpaid fees actually due and payable to the Administrative Agent, the U.S. Issuing Lenders and the Revolving Credit Lenders under any of the Loan Documents; ( 4 )  fourth , to pay (on a ratable basis) all accrued and unpaid interest actually due and payable on the Tranche A-1 U.S. Facility Revolving Credit Loans; ( 5 )  fifth , to repay (on a ratable basis) the outstanding principal of Tranche A U.S. Facility Revolving Credit Loans and Tranche A Canadian Facility Revolving Credit Loans made to the U.S. Borrowers (whether or not then due and payable); ( 6 )  sixth , to repay (on a ratable basis) the outstanding principal of Tranche A-1 U.S. Facility Revolving Credit Loans made to the U.S. Borrowers (whether or not then due and payable); and ( 7 )  seventh , to pay (on a ratable basis) all outstanding obligations of the U.S. Borrowers then due and payable to the Administrative Agent, the ABL Collateral Agent and the Revolving Credit Lenders under this Agreement and the other Loan Documents.
 
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(ii) At any time other than during the continuance of an Event of Default, all collected amounts held in the Canadian Core Concentration Account shall be distributed and applied on a daily basis in the following order (in each case, to the extent the Administrative Agent has actual knowledge of the amounts owing or outstanding as described below and any applications otherwise described in following clauses (x) and (y), and after giving effect to the application of any such amounts ( x ) otherwise required pursuant to subsection 4.4(b) , ( y ) constituting proceeds from any Collateral otherwise required pursuant to the terms of the respective Security Document or ( z ) otherwise required by any applicable Intercreditor Agreement): ( 1 )  first , to the payment (on a ratable basis) of any outstanding expenses actually due and payable by the Canadian Borrower to the Administrative Agent and/or the ABL Collateral Agent under any of the Loan Documents and to repay or prepay outstanding Agent Advances made as Tranche A Canadian Facility Revolving Credit Loans (with accrued interest); ( 2 )  second , to pay (on a ratable basis) all outstanding expenses actually due and payable by the Canadian Borrower to each Canadian Issuing Lender under any of the Loan Documents and to repay all outstanding Canadian Borrower unreimbursed outstanding drawn amounts under Letters of Credit and interest thereon; ( 3 )  third , to pay (on a ratable basis) all accrued and unpaid interest actually due and payable on the Tranche A Canadian Facility Revolving Credit Loans made to the Canadian Borrower and all accrued and unpaid Fees actually due and payable by the Canadian Borrower to the Administrative Agent, the Canadian Issuing Lenders and the Canadian Facility Lenders under any of the Loan Documents; ( 4 )  fourth , to pay (on a ratable basis) all accrued and unpaid interest actually due and payable on the Tranche A-1 Canadian Facility Revolving Credit Loans made to the Canadian Borrower; ( 5 )  fifth , to repay (on a ratable basis) the outstanding principal of Tranche A Canadian Facility Revolving Credit Loans made to the Canadian Borrower (whether or not then due and payable); ( 6 )  sixth , to repay (on a ratable basis) the outstanding principal of Tranche A-1 Canadian Facility Revolving Credit Loans made to the Canadian Borrower (whether or not then due and payable); and ( 7 )  seventh , to pay (on a ratable basis) all outstanding obligations of the Canadian Borrower then due and payable to the Administrative Agent, the ABL Collateral Agent and the Canadian Facility Lenders under this Agreement and the other Loan Documents.
(f) (i) The Loan Parties respectively may close DDAs or Concentration Accounts and/or open new DDAs or new Concentration Accounts, subject to, in the case of any new Concentration Account, ( x ) the contemporaneous execution and delivery to the Administrative Agent of a Concentration Account Agreement or Canadian Concentration Account Agreement, as applicable consistent with the provisions of this subsection 4.16 with respect to each such new Concentration Account or ( y ) other arrangements reasonably satisfactory to the Administrative Agent and ( ii ) as part of the Compliance Certificate to be delivered concurrently with the delivery of financial statements and reports referred to in subsections 7.1(a) and 7.1(b) the Borrower Representative will provide a list to the Administrative Agent of any new opened or acquired DDAs or Concentration Accounts during the preceding fiscal quarter.
 
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(g) (i) The U.S. Core Concentration Account shall at all times be under the sole dominion and control of the Administrative Agent. Each Loan Party hereby acknowledges and agrees that, except to the extent otherwise provided in the U.S. Guarantee and Collateral Agreement ( x ) such Loan Party has no right of withdrawal from the U.S. Core Concentration Account, ( y ) the funds on deposit in the U.S. Core Concentration Account shall at all times continue to be collateral security for all of the obligations of the Loan Parties hereunder and under the other Loan Documents, and ( z ) the funds on deposit in the U.S. Core Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this subsection 4.16 , any Loan Party receives or otherwise has dominion and control of any proceeds or collections required to be transferred to the U.S. Core Concentration Account pursuant to subsection 4.16(d)(i) , such proceeds and collections shall be held in trust by such Loan Party for the Administrative Agent, shall not be commingled with any of such Loan Party’s other funds or deposited in any account of such Loan Party (other than any account by which such Loan Party received or acquired dominion or control over such proceeds and collections, or with any funds in such account) and shall promptly be deposited into the U.S. Core Concentration Account or dealt with in such other fashion as such Loan Party may be reasonably instructed by the Administrative Agent.
(ii) The Canadian Core Concentration Account shall at all times be under the sole dominion and control of the Administrative Agent. Each Loan Party hereby acknowledges and agrees that, except to the extent otherwise provided in the Canadian Guarantee and Collateral Agreement ( x ) such Loan Party has no right of withdrawal from the Canadian Core Concentration Account, ( y ) the funds on deposit in the Canadian Core Concentration Account shall at all times continue to be collateral security for all of the obligations of the Canadian Loan Parties hereunder and under the other Loan Documents, and ( z ) the funds on deposit in the Canadian Core Concentration Account shall be applied as provided in this Agreement. In the event that, notwithstanding the provisions of this subsection 4.16 , any Loan Party receives or otherwise has dominion and control of any proceeds or collections required to be transferred to the Canadian Core Concentration Account pursuant to subsection 4.16(d)(ii) , such proceeds and collections shall be held in trust by such Loan Party for the Administrative Agent, shall not be commingled with any of such Loan Party’s other funds or deposited in any account of such Loan Party (other than any account by which such Loan Party received or acquired dominion or control over such proceeds and collections, or with any funds in such account) and shall promptly be deposited into the Canadian Core Concentration Account or dealt with in such other fashion as such Loan Party may be reasonably instructed by the Administrative Agent.
(h) In the event that a Loan Party acquires new DDAs in connection with an acquisition, the Borrower Representative will procure that such Loan Party shall within 90 days of the date of such acquisition (or such longer period as may be agreed by the Administrative Agent) cause such new DDAs so acquired to comply with the applicable requirements of subsection 4.16(b) (including, with respect to any new DDA that is to become a Concentration Account, by entering into a Concentration Account Agreement or Canadian Concentration Account Agreement, as applicable, or entering into other arrangements consistent with the provisions of this subsection 4.16 and otherwise reasonably satisfactory to the Administrative Agent).
 
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(i) So long as no Cash Dominion Period is continuing, the Loan Parties may direct the manner of disposition of funds in the DDAs and the Concentration Accounts.
(j) Any amounts held or received in the U.S. Core Concentration Account or the Canadian Core Concentration Account (including all interest and other earnings with respect hereto, if any) at any time ( x ) when all of the monetary obligations due and owing hereunder and under the other Loan Documents have been satisfied or ( y ) no Cash Dominion Period is continuing, shall (subject in the case of clause (x) to the provisions of any applicable Intercreditor Agreement) be remitted to the operating account of the applicable Borrower.
(k) The Loan Parties shall use commercially reasonable efforts to obtain Concentration Account Agreements or Canadian Concentration Account Agreements, as applicable, with respect to their primary Concentration Accounts. Notwithstanding anything herein to the contrary ( i ) the Loan Parties shall be deemed to be in compliance with the requirements set forth in this subsection 4.16 during the initial 120 day period commencing on the Closing Date to the extent that the arrangements described above are established and effective not later than the date that is 120 days following the Closing Date or such later date as the Administrative Agent, in its sole discretion, may agree; and ( ii ) if such arrangements are not obtained within such 120 day period (or such later date as the Administrative Agent may agree), the Loan Parties shall use commercially reasonable efforts to move the relevant Concentration Accounts to the Administrative Agent or another bank reasonably acceptable to the Administrative Agent that is willing to enter into such arrangements and shall be deemed to be in compliance with the requirements set forth in this subsection 4.16 so long as they comply with this obligation.
4.17 Defaulting Lenders . Notwithstanding anything contained in this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) no commitment fee shall accrue for the account of a Defaulting Lender so long as such Lender shall be a Defaulting Lender (except to the extent it is payable to the Issuing Lender pursuant to clause (d)(v) below);
(b) in determining the Required Lenders or Supermajority Lenders, any Lender that at the time is a Defaulting Lender (and the Loans and/or Commitment of such Defaulting Lender) shall be excluded and disregarded;
(c) the Parent Borrower shall have the right, at its sole expense and effort, ( i ) to seek one or more Persons reasonably satisfactory to the Administrative Agent and the Parent Borrower to each become a substitute Lender and assume all or part of the Commitment of any Defaulting Lender and the Parent Borrower, the Administrative Agent and any such substitute Lender shall execute and deliver, and such Defaulting Lender shall thereupon be deemed to have executed and delivered, an appropriately
 
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completed Assignment and Acceptance to effect such substitution or ( ii ) upon notice to the Administrative Agent, to prepay the Loans and, at the Parent Borrower’s option, terminate the Commitments of such Defaulting Lender, in whole or in part, without premium or penalty;
(d) if any Swing Line Exposure exists or any L/C Obligations exist at the time a Tranche A U.S. Facility Lender or Tranche A Canadian Facility Lender becomes a Defaulting Lender then:
(i) all or any part of such Swing Line Exposure and L/C Obligations shall be re-allocated among the Non-Defaulting Lenders that are Tranche A Facility Lenders or Tranche A Canadian Facility Lenders, as the case may be in accordance with their respective Commitment Percentages but only to the extent the sum of all such Non-Defaulting Lenders’ Tranche A U.S. Facility Lender Exposure and Tranche A Canadian Facility Lender Exposure (in each case before giving effect to each reallocation) plus such Defaulting Lender’s Swing Line Exposure and L/C Obligations (or in the case of Canadian Facility L/C Obligations, the Dollar Equivalent thereof) does not exceed the total of all Non-Defaulting Lenders’ Tranche A U.S. Facility Commitments or Dollar Equivalent Tranche A Canadian Facility Commitments, as applicable;
(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the applicable Borrowers shall within one Business Day (or such longer period as may be agreed to by the Administrative Agent) following notice by the Administrative Agent ( x )  first , prepay such Defaulting Lender’s Swing Line Exposure and ( y )  second , cash collateralize with cash and/or Cash Equivalents such Defaulting Lender’s L/C Obligations (after giving effect to any partial reallocation pursuant to clause (i) above) on terms reasonably satisfactory to the Administrative Agent for so long as such L/C Obligations are outstanding;
(iii) if any portion of such Defaulting Lender’s L/C Obligations is cash collateralized pursuant to clause (ii) above, the Borrowers shall not be required to pay the L/C Fee for participation with respect to such portion of such Defaulting Lender’s L/C Obligations so long as it is cash collateralized;
(iv) if any portion of such Defaulting Lender’s L/C Obligations is re-allocated to the Non-Defaulting Lenders pursuant to clause (i) above, then the letter of credit commission with respect to such portion shall be allocated among the Non-Defaulting Lenders in accordance with their Commitment Percentages; or
(v) if any portion of such Defaulting Lender’s L/C Obligations is neither cash collateralized nor re-allocated pursuant to this subsection 4.17(d) , then, without prejudice to any rights or remedies of the Issuing Lender or any Lender hereunder, the commitment fee that otherwise would have been payable to such Defaulting Lender (with respect to the portion of such Defaulting Lender’s Commitment that was utilized by such L/C Obligations) and the letter of credit
 
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commission payable with respect to such Defaulting Lender’s L/C Obligations shall be payable to the Issuing Lender until such L/C Obligations are cash collateralized and/or re-allocated;
(e) so long as ( i ) any Tranche A U.S. Facility Lender is a Defaulting Lender, the Swing Line Lender shall not be required to fund any Swing Line Loan and no U.S. Facility Issuing Lender shall be required to issue, amend or increase any Letter of Credit, unless they are respectively satisfied that the related exposure will be 100% covered by the Commitments of the Non-Defaulting Lenders and/or cash collateralized on terms reasonably satisfactory to the Administrative Agent, and participations in any such newly issued or increased Letter of Credit or newly made Swing Line Loan shall be allocated among Non-Defaulting Lenders in accordance with their respective Commitment Percentages (and Defaulting Lenders shall not participate therein) and ( ii ) any Tranche A Canadian Facility Lender is a Defaulting Lender, no Canadian Issuing Lender shall be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Commitments of the Non-Defaulting Lenders and/or cash collateralized on terms reasonably satisfactory to the Administrative Agent, and participations in any such newly issued or increased Letter of Credit shall be allocated among Non-Defaulting Lenders in accordance with their respective Commitment Percentages (and Defaulting Lenders shall not participate therein);
(f) any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender pursuant to subsection 11.7 ) may, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in a segregated non-interest bearing account and, subject to any applicable Requirement of Law, be applied at such time or times as may be determined by the Administrative Agent ( i )  first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder, ( ii )  second , pro rata, to the payment of any amounts owing by such Defaulting Lender to the Issuing Lender or Swing Line Lender hereunder, ( iii )  third , to the funding of any Loan or the funding or cash collateralization of any participation in any Swing Line Loan or Letter of Credit in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent, ( iv )  fourth , if so determined by the Administrative Agent and the Parent Borrower, held in such account as cash collateral for future funding obligations of the Defaulting Lender under this Agreement, ( v )  fifth , pro rata, to the payment of any amounts owing to the Borrowers or the Lenders as a result of any judgment of a court of competent jurisdiction obtained by a Borrower or any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement and ( vi )  sixth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is a prepayment of the principal amount of any Loans or Reimbursement Obligations in respect of which a Defaulting Lender has funded its participation obligations, such payment shall be applied solely to prepay the Loans of, and Reimbursement Obligations owed to, all Non-Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans, or Reimbursement Obligations owed to, any Defaulting Lender; and
 
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(g) in the event that the Administrative Agent, the Borrower Representative, each applicable Issuing Lender or the Swing Line Lender, as the case may be, each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swing Line Exposure and L/C Obligations of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Commitment Percentage. The rights and remedies against a Defaulting Lender under this subsection 4.17 are in addition to other rights and remedies that the Borrowers, the Administrative Agent, the Issuing Lenders, the Swing Line Lender and the Non-Defaulting Lenders may have against such Defaulting Lender. The arrangements permitted or required by this subsection 4.17 shall be permitted under this Agreement, notwithstanding any limitation on Liens or the pro rata sharing provisions or otherwise.
 
SECTION 5.	REPRESENTATIONS AND WARRANTIES .	
To induce the Administrative Agent, the Issuing Lender and each Lender to make the Extensions of Credit requested to be made by it on the Closing Date and on each Borrowing Date thereafter, the Parent Borrower hereby represents and warrants, on the Closing Date, after giving effect to the Transactions, and on each Borrowing Date thereafter, to the Administrative Agent and each Lender that:
5.1 Financial Condition . The ( i ) audited combined balance sheet of the xpedx Business as of December 31, 2013, and the related audited combined statements of operations and comprehensive income, cash flows and changes in parent company equity for the fiscal year ended December 31, 2013, including the notes thereto, in each case, reported on by and accompanied by an unqualified report from Deloitte & Touche LLP, ( ii ) the unaudited combined balance sheet of the xpedx Business as of March 31, 2014, and the related unaudited combined statements of operations and comprehensive income and cash flows for the 3 months ended March 31, 2014, ( iii ) the audited consolidated balance sheet of UWWH as of December 31, 2013, and the related audited consolidated statements of operations, comprehensive income/(loss), changes in redeemable preferred stock and stockholders’ equity and cash flows for the fiscal year ended December 31, 2013, including the notes thereto, in each case, reported on by and accompanied by an unqualified report from PricewaterhouseCoopers LLP and ( iv ) the unaudited consolidated balance sheet of UWWH as of March 31, 2014, and the related unaudited consolidated statements of operations, comprehensive income/(loss) and cash flows for the 3 months ended March 31, 2014, in each case present fairly, in all material respects, the combined or consolidated, as applicable, financial condition as at such date and the combined results of operations for the respective periods then ended, of (in the case of the financial statements referred to in clauses (i) and (ii) above) the xpedx Business and (in the case of the financial statements referred to in clauses (iii) and (iv) above) UWWH. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby (except as approved by a Responsible Officer of the Parent Borrower or Holding, as applicable, and disclosed in any such schedules and notes, and subject to the omission of footnotes from such unaudited financial statements).
 
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5.2 Solvent; No Material Adverse Effect .
(a) As of the Closing Date, after giving effect to the consummation of the Transactions occurring on the Closing Date, the Parent Borrower, together with its Subsidiaries on a consolidated basis, is Solvent.
(b) Since the Closing Date, there has not been any event, change, circumstance or development which, individually or in the aggregate, has had or would reasonably be expected to have, a Material Adverse Effect.
5.3 Corporate Existence; Compliance with Law . Each of the Loan Parties ( a ) is duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its incorporation or formation, other than, solely in the case of Loan Parties that are not Borrowers, in such jurisdictions where the failure to be so in good standing would not reasonably be expected to have a Material Adverse Effect, ( b ) has the corporate or other organizational power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, except to the extent that the failure to have such legal right would not be reasonably expected to have a Material Adverse Effect, ( c ) is duly qualified as a foreign corporation or a limited liability company or an unlimited company and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, other than in such jurisdictions where the failure to be so qualified and in good standing would not be reasonably expected to have a Material Adverse Effect and ( d ) is in compliance with all Requirements of Law, except to the extent that the failure to comply therewith would not, in the aggregate, be reasonably expected to have a Material Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations . Each Loan Party has the corporate or other organizational power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of each Borrower, to obtain Extensions of Credit hereunder, and each such Loan Party has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Loan Documents, Notes and Letter of Credit Requests to which it is a party and, in the case of each Borrower, to authorize the Extensions of Credit to it, if any, on the terms and conditions of this Agreement, and any Notes. No consent or authorization of, filing with, notice to or other similar act by or in respect of, any Governmental Authority or any other Person is required to be obtained or made by or on behalf of any Loan Party in connection with the execution, delivery, performance, validity or enforceability of the Loan Documents to which it is a party or, in the case of each Borrower, with the Extensions of Credit to it, if any, hereunder, except for ( a ) consents, authorizations, notices and filings described in Schedule 5.4 , all of which have been obtained or made prior to or on the Closing Date, ( b ) filings to perfect the Liens created by the Security Documents, ( c ) filings pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq .), in respect of Accounts of the Parent Borrower and its Restricted Subsidiaries, the Obligor in respect of which is the United States of America or any department, agency or instrumentality thereof, ( d ) filings and other required formalities pursuant to the Financial Administration Act (Canada) in respect of accounts of the Parent Borrower and its Subsidiaries, the Obligor in respect of which is Her Majesty the Queen in the right of Canada or any department, agency or instrumentality thereof and ( e ) consents, authorizations, notices and
 
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filings which the failure to obtain or make would not reasonably be expected to have a Material Adverse Effect. This Agreement has been duly executed and delivered by each Borrower, and each other Loan Document to which any Loan Party is a party will be duly executed and delivered on behalf of such Loan Party. This Agreement constitutes a legal, valid and binding obligation of each Borrower, and each other Loan Document to which any Loan Party is a party when executed and delivered will constitute a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, in each case except as enforceability may be limited by applicable domestic or foreign bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
5.5 No Legal Bar . The execution, delivery and performance of the Loan Documents by any of the Loan Parties, the Extensions of Credit hereunder and the use of the proceeds thereof ( a ) will not violate any Requirement of Law or Contractual Obligation of such Loan Party in any respect that would reasonably be expected to have a Material Adverse Effect and ( b ) will not result in, or require, the creation or imposition of any Lien (other than Permitted Liens) on any of its properties or revenues pursuant to any such Requirement of Law or Contractual Obligation.
5.6 No Material Litigation . No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Parent Borrower, threatened by or against the Parent Borrower or any of its Restricted Subsidiaries or against any of their respective properties or revenues, except as described on Schedule 5.6 , ( a ) which is so pending or threatened at any time on or prior to the Closing Date and relates to any of the Loan Documents or any of the transactions contemplated hereby or thereby or ( b ) which would be reasonably expected to have a Material Adverse Effect.
5.7 No Default . Since the Closing Date, neither the Parent Borrower nor any of its Restricted Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect which would be reasonably expected to have a Material Adverse Effect. Since the Closing Date, no Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property . Each of the Parent Borrower and its Restricted Subsidiaries has good title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property, except where the failure to have such good title or such leasehold interest would not reasonably be expected to have a Material Adverse Effect.
5.9 Intellectual Property . The Parent Borrower and each of its Restricted Subsidiaries owns, or has the legal right to use, all United States and Canadian patents, patent applications, industrial designs, trademarks, trademark applications, trade names, copyrights, technology, know-how and processes necessary for each of them to conduct its business substantially as currently conducted (the “ Intellectual Property ”) except for those the failure to own or have such legal right to use would not be reasonably expected to have a Material Adverse Effect.
 
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5.10 Taxes . To the knowledge of the Parent Borrower, each of the Parent Borrower and its Restricted Subsidiaries has filed or caused to be filed all United States and Canadian federal and provincial income tax returns and all other material tax returns that are required to be filed by it and has paid ( a ) all Taxes shown to be due and payable on such returns and ( b ) all Taxes shown to be due and payable on any assessments of which it has received notice made against it or any of its property, including the Mortgaged Properties, and all other Taxes imposed on it or any of its property by any Governmental Authority and no tax Lien has been filed or registered (except for Liens for Taxes not yet due and payable), and no claim is being asserted in writing, with respect to any such Tax (other than, for purposes of this subsection 5.10 in respect of any ( i ) Tax or Liens with respect to which the failure to pay, or the existence thereof, in the aggregate, would not have a Material Adverse Effect or ( ii ) Taxes the amount or validity of which are currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which reserves in conformity with GAAP have been provided on the books of Holding, the Parent Borrower or one or more of its Restricted Subsidiaries, as the case may be).
5.11 Federal Regulations . No part of the proceeds of any Extensions of Credit will be used for any purpose that violates the provisions of the Regulations of the Board, including Regulation T, Regulation U or Regulation X.
5.12 ERISA; Canadian Pension Plans .
(a) During the five-year period prior to each date as of which this representation is made or deemed made (or, with respect to (vi) below, as of the date such representation is made or deemed made), none of the following events or conditions, either individually or in the aggregate, has resulted or is reasonably likely to result in a Material Adverse Effect: ( i ) with respect to any Single Employer Plan, a Reportable Event; ( ii ) with respect to any Single Employer Plan, any failure to satisfy the minimum funding standards (within the meaning of Section 412 or 430 of the Code or Section 302 or 303 of ERISA), whether or not waived; ( iii ) with respect to any Plan, any noncompliance with the applicable provisions of ERISA or the Code, ( iv ) a termination of a Single Employer Plan (other than a standard termination pursuant to Section 4041(b) of ERISA); ( v ) a Lien on the property of the Parent Borrower or its Restricted Subsidiaries in favor of the PBGC or a Single Employer Plan; ( vi ) any Underfunding with respect to any Single Employer Plan; ( vii ) a complete or partial withdrawal from any Multiemployer Plan by the Parent Borrower or any Commonly Controlled Entity; ( viii ) the Reorganization or Insolvency of any Multiemployer Plan; or ( ix ) any transactions that resulted or could reasonably be expected to result in any liability to the Parent Borrower or any Commonly Controlled Entity under Section 4069 of ERISA or Section 4212(c) of ERISA; provided that the representation made in clauses (vii) and (viii) of this subsection 5.12(a) with respect to a Multiemployer Plan is based on knowledge of the Parent Borrower.
(b) Other than as disclosed on Schedule 5.12 , as of the Closing Date no Canadian Pension Plan provides benefits on a defined benefit basis. Except as would not be reasonably expected to have a Material Adverse Effect: ( i ) each Canadian Pension Plan, such Canadian Pension Plan is, and has been, established, registered, funded,
 
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administered and invested in compliance with the terms of such Canadian Pension Plan (including the terms of any documents in respect of such Canadian Pension Plan), all applicable laws and any collective agreements, as applicable; ( ii ) no Canadian Pension Plan is subject to an investigation, any other proceeding, or action or claim; ( iii ) where any Canadian Pension Plan has been partially or fully wound-up, all assets, including any surplus, attributable to such wind-up have been fully distributed in accordance with all applicable laws and any unfunded liability arising on such wind-up has been fully funded such that that no Loan Party has any outstanding liabilities with respect to such wound-up Canadian Pension Plan; ( iv ) no Canadian Pension Plan has an ongoing deficiency, wind-up deficiency or solvency deficiency greater than that disclosed in the most recent actuarial report prepared for such Canadian Pension Plan and provided to the Administrative Agent; ( v ) no Pension Event has occurred and is continuing; and ( vi ) no Lien has arisen in respect of, or in connection with any Canadian Pension Plan (save for contribution amounts not yet due).
(c) With respect to any Foreign Plan, none of the following events or conditions exists and is continuing that, either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect: ( i ) substantial non-compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders; ( ii ) failure to be maintained, where required, in good standing with applicable regulatory authorities; ( iii ) any obligation of the Parent Borrower or its Restricted Subsidiaries in connection with the termination or partial termination of, or withdrawal from, any Foreign Plan; ( iv ) any Lien on the property of the Parent Borrower or its Restricted Subsidiaries in favor of a Governmental Authority as a result of any action or inaction regarding a Foreign Plan; ( v ) for each Foreign Plan that is a funded or insured plan, failure to be funded or insured on an ongoing basis to the extent required by applicable non-U.S. or non-Canadian law (using actuarial methods and assumptions which are consistent with the valuations last filed with the applicable Governmental Authorities); ( vi ) any pending or, to the best knowledge of the Parent Borrower or any of its Restricted Subsidiaries, threatened disputes concerning the assets of any Foreign Plan (other than individual claims for the payment of benefits); and ( vii ) failure to make all contributions in a timely manner to the extent required by applicable non-U.S. or non-Canadian law.
5.13 Collateral .
(a) Upon execution and delivery thereof by the parties thereto, the U.S. Guarantee and Collateral Agreement and the Mortgages will be effective to create (to the extent described therein) in favor of the ABL Collateral Agent for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein, except as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. When ( i ) the actions specified in Schedule 3 to the U.S. Guarantee and Collateral Agreement have been duly taken, ( ii ) all applicable Instruments, Chattel Paper and Documents (each as described therein) a security interest in which is perfected by
 
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possession have been delivered to, and/or are in the continued possession of, the ABL Collateral Agent, ( iii ) all Electronic Chattel Paper and Pledged Stock (each as defined in the U.S. Guarantee and Collateral Agreement) a security interest in which is required to be or is perfected by “control” (as described in the UCC) are under the “control” of the ABL Collateral Agent or the Administrative Agent, as agent for the ABL Collateral Agent and as directed by the ABL Collateral Agent, and ( iv ) the Mortgages have been duly recorded, the security interests granted pursuant thereto shall constitute (to the extent described therein and with respect to Mortgages, only as relates to the real property security interests granted pursuant thereto) a perfected security interest in, all right, title and interest of each pledgor or mortgagor (as applicable) party thereto in the Collateral described therein. Notwithstanding any other provision of this Agreement, capitalized terms that are used in this subsection 5.13 and not defined in this Agreement are so used as defined in the applicable Security Document.
(b) Upon execution and delivery thereof by the parties thereto, the Canadian Security Documents will be effective to create (to the extent described therein) in favor of the ABL Collateral Agent, for the ratable benefit of the Canadian Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein, except as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or a law) and an implied covenant of good faith and fair dealing. When the actions specified in Schedule 3 to the Canadian Guarantee and Collateral Agreement have been duly taken, the security interests granted pursuant thereto shall constitute (to the extent described therein) a perfected security interest in, all right, title and interest of each pledgor party thereto in the Collateral described therein with respect to such pledgor.
5.14 Investment Company Act . None of the Borrowers is an “investment company” within the meaning of the Investment Company Act.
5.15 Subsidiaries . Schedule 5.15 sets forth all the Subsidiaries of the Parent Borrower at the Closing Date (after giving effect to the Transactions), the jurisdiction of their organization and the direct or indirect ownership interest of the Parent Borrower therein.
5.16 Purpose of Loans . The proceeds of Revolving Credit Loans and Swing Line Loans shall be used by the Borrowers on and after the Closing Date, to finance, in part, the Transactions, to refinance certain indebtedness of Unisource and to pay certain transaction fees and expenses related to the Transactions and for working capital, capital expenditures and other general corporate purposes. The proceeds of any Incremental Facility may be used by the Parent Borrower and its Restricted Subsidiaries for working capital and other general corporate purposes, including the financing of Permitted Acquisitions, other Permitted Investments, dividends and distributions permitted under subsection 8.5 and permitted distributions on account of the Capital Stock of Holding.
 
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5.17 Environmental Matters . Other than as disclosed on Schedule 5.17 or exceptions to any of the following that would not, individually or in the aggregate, reasonably be expected to give rise to a Material Adverse Effect:
(a) the Parent Borrower and its Restricted Subsidiaries are in compliance with all Environmental Laws and Environmental Permits and all such permits are in full force and effect;
(b) Materials of Environmental Concern are not present at, and have not been Released at, under or from any real property or facility presently or formerly owned, leased or operated by the Parent Borrower or any of its Restricted Subsidiaries or at any other location, in a manner or amount which could reasonably be expected to result in violation of any applicable Environmental Law or give rise to liability or other Environmental Costs of the Parent Borrower or any of its Restricted Subsidiaries under any applicable Environmental Law;
(c) there is no judicial, administrative or arbitral proceeding (including any notice of violation or alleged violation) under any Environmental Law to which the Parent Borrower or any of its Restricted Subsidiaries, or to the knowledge of the Parent Borrower or any of its Restricted Subsidiaries is reasonably likely to be, named as a party that is pending or, to the knowledge of the Parent Borrower or any of its Restricted Subsidiaries, threatened;
(d) neither the Parent Borrower nor any of its Restricted Subsidiaries is conducting or financing any investigation, removal, remedial or other corrective action pursuant to any Environmental Law;
(e) neither the Parent Borrower nor any of its Restricted Subsidiaries has treated, stored, used, handled, transported, Released, disposed or arranged for disposal or transport for disposal or treatment of Materials of Environmental Concern at, on, under or from any currently or formerly owned, operated or leased real property; and
(f) neither the Parent Borrower nor any of its Restricted Subsidiaries has entered into or agreed to any consent decree, order, or settlement or other agreement, or is subject to any judgment, decree, or order or other agreement, in any judicial, administrative, arbitral or other forum, relating to compliance with or liability under any Environmental Law.
5.18 No Material Misstatements . The written factual information, reports, financial statements, exhibits and schedules furnished by or on behalf of the Parent Borrower to the Administrative Agent, the Other Representatives and the Lenders on or prior to the Closing Date in connection with the negotiation of any Loan Document or included therein or delivered pursuant thereto, taken as a whole, did not contain as of the Closing Date any material misstatement of fact and did not omit to state as of the Closing Date any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading in their presentation of the Parent Borrower and its Restricted Subsidiaries taken as a whole. It is understood that ( a ) no representation or warranty is made
 
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concerning the forecasts, estimates, pro forma information, projections and statements as to anticipated future performance or conditions, and the assumptions on which they were based or concerning any information of a general economic nature or general information about the Parent Borrower’s and its Subsidiaries’ industry, contained in any such information, reports, financial statements, exhibits or schedules, except that, in the case of such forecasts, estimates, pro forma information, projections and statements, as of the date such forecasts, estimates, pro forma information, projections and statements were generated, ( i ) such forecasts, estimates, pro forma information, projections and statements were based on the good faith assumptions of the management of the Parent Borrower and ( ii ) such assumptions were believed by such management to be reasonable and ( b ) such forecasts, estimates, pro forma information and statements, and the assumptions on which they were based, may or may not prove to be correct.
5.19 Anti-Terrorism . As of the Closing Date, ( a ) the Parent Borrower and its Restricted Subsidiaries are in compliance with the Patriot Act and the United States Foreign Corrupt Practices Act of 1977, as amended, and ( b ) none of the Parent Borrower and its Restricted Subsidiaries is a person on the list of “Specially Designated Nationals and Blocked Persons” or subject to the limitations and prohibitions under any U.S. Department of Treasury’s Office of Foreign Asset Control regulation or executive order (“ OFAC ”).
5.20 Eligibility . As of the date of any Borrowing Base Certificate, ( a ) all Accounts included in the definition of Eligible Accounts on such Borrowing Base Certificate satisfy all requirements of an “Eligible Account” hereunder, ( b ) all Inventory included in the definition of Eligible Inventory on such Borrowing Base Certificate satisfy all requirements of “Eligible Inventory” hereunder, ( c ) all In-Transit Inventory included in the definition of Eligible In-Transit Inventory on such Borrowing Base Certificate satisfy all requirements of “Eligible In-Transit Inventory” hereunder, ( d ) all Letter of Credit Inventory included in the definition of Eligible Letter of Credit Inventory on such Borrowing Base Certificate satisfy all requirements of “Eligible Letter of Credit Inventory” hereunder and ( e ) all Credit Card Receivables included in the definition of Eligible Credit Card Receivables on such Borrowing Base Certificate satisfy all requirements of “Eligible Credit Card Receivables” hereunder.
 
SECTION 6.	CONDITIONS PRECEDENT .	
6.1 Conditions to Effectiveness and Initial Extension of Credit . This Agreement, including the agreement of each Lender to make the First Draw and any additional Extension of Credit requested to be made by it on the Closing Date and each Issuing Lender to issue Letters of Credit, shall become effective on the date on which the following conditions precedent shall have been satisfied or waived:
(a) Loan Documents . The Administrative Agent shall have received the following Loan Documents, executed and delivered as required below, with, in the case of clause (i), a copy for each Lender of:
(i) this Agreement, executed and delivered by a duly authorized officer of each Borrower party hereto on the Closing Date (in the case of the First Draw before giving effect to the Mergers);
 
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(ii) the U.S. Guarantee and Collateral Agreement, executed and delivered by a duly authorized officer of each Borrower and each other Loan Party signatory thereto on the Closing Date (in the case of the First Draw before giving effect to the Mergers); and
(iii) each Canadian Security Document, executed and delivered by a duly authorized officer of the Canadian Borrower and each other Loan Party signatory thereto on the Closing Date (in the case of the First Draw before giving effect to the Mergers);
provided that clauses (a)(iii), (f) and (g) of this subsection 6.1 notwithstanding, to the extent any guarantee or collateral is not provided on the Closing Date after Holding and its Subsidiaries having used commercially reasonable efforts to do so (it being understood that at a minimum ( 1 ) security interests shall have been granted in Collateral with respect to which liens can be perfected solely by the filing of UCC-1 or PPSA financing statements, and the applicable UCC-1 and PPSA financing statements shall have been submitted to the appropriate governmental offices for filing, and ( 2 ) certificated equity securities of the Parent Borrower and its Domestic Subsidiaries and Canadian Subsidiaries, if any, shall have been delivered (in each case to the extent otherwise required by the Loan Documents)), the provisions of clauses (a)(iii), (f) and (g) shall be deemed to have been satisfied and the Loan Parties shall be required to provide such guarantees and collateral in accordance with the provisions set forth in subsection 7.11 .
(b) Merger Agreement . The Merger shall be consummated substantially concurrently with ( x ) the initial funding hereunder in accordance with the terms of the Merger Agreement, without giving effect to any modifications, amendments, express waivers or express consents thereto that are materially adverse to the Lenders without the consent of the Commitment Parties holding more than 50% of the aggregate commitments under that certain Commitment Letter (together with the annexes thereto, all as amended by ( i ) that certain Amendment to Commitment Letter, dated as of February 14, 2014, ( ii ) that certain Second Amendment to Commitment Letter, dated as of February 28, 2014, and ( iii ) as further amended from time to time), dated as of January 28, 2014, among Spinco and the Commitment Parties (such consent not to be unreasonably withheld or delayed), it being understood and agreed that neither any change to the xpedx Valuation Percentage (as defined in the Merger Agreement) or any increase or reduction in the Special Payment shall be deemed to be materially adverse to the Lenders; provided , that, for the avoidance of doubt, the First Draw may be incurred prior to the consummation of the Merger so long as it is made substantially concurrently with the consummation of the Contributions (as defined in the Merger Agreement) substantially in accordance with the Contribution Agreement, without any waiver or amendment thereof, or consent thereunder, that is materially adverse to the Lenders unless consented to by Commitment Parties holding more than 50% of the aggregate Commitments (such consent not to be unreasonably withheld), it being understood and agreed that any increase or reduction in the Special Payment shall be not deemed to be materially adverse to the Lenders.
 
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(c) Lien Searches . The Administrative Agent shall have received the results of customary lien and judgment searches requested by it at least 30 calendar days prior to the Closing Date.
(d) Legal Opinions . The Administrative Agent shall have received the following executed legal opinions, each in a form reasonably satisfactory to the Administrative Agent:
(i) the executed legal opinions of Debevoise & Plimpton LLP, special New York counsel to each of Holding, each Borrower and the other Loan Parties;
(ii) the executed legal opinions of Richards, Layton & Finger, P.A., special Delaware counsel to each of Holding and certain other Loan Parties;
(iii) the executed legal opinions of McMillan LLP, special Canadian counsel to the Canadian Borrower; and
(iv) the executed legal opinions of Kirkland & Ellis LLP, special California counsel to certain Loan Parties.
(e) Officer’s Certificate . The Administrative Agent shall have received a certificate from the Parent Borrower, dated the Closing Date, substantially in the form of Exhibit L , with appropriate insertions and attachments.
(f) Perfected Liens . Subject, in each case, to the proviso in clause (a) of this subsection 6.1 , ( i ) the ABL Collateral Agent shall have obtained a valid security interest in the Collateral (to the extent contemplated in the applicable Security Documents) other than with respect to Mortgaged Properties; and all documents, instruments, filings and recordations reasonably necessary in connection with the perfection and, in the case of the filings with the U.S. Patent and Trademark Office and the U.S. Copyright Office, protection of such security interests shall have been executed and delivered or made, or, in the case of UCC filings, written authorization to make such UCC filings shall have been delivered to the ABL Collateral Agent, and none of such Collateral shall be subject to any other pledges, security interests or mortgages except for Permitted Liens or pledges, security interests or mortgages to be released on the Closing Date; provided that, with respect to any such Collateral, the security interest in which may not be perfected by filing of a UCC financing statement or by making a filing with the U.S. Patent and Trademark Office or the U.S. Copyright Office, if perfection of the ABL Collateral Agent’s security interest in such Collateral may not be accomplished on or before the Closing Date without undue burden or expense, then delivery of documents and instruments for perfection of such security interest shall not constitute a condition precedent to the initial borrowings hereunder; and ( ii ) the ABL Collateral Agent shall have obtained a valid security interest in the Collateral covered by the Canadian Security Documents (with the priority contemplated therein); and all documents, instruments, filings, registrations and recordations reasonably necessary in connection with the perfection and, in the case of the filings with the Canadian Intellectual Property Office, protection of such security interests shall have been executed and delivered or made, and
 
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none of such collateral shall be subject to any other pledges, security interests or mortgages except for Permitted Liens, provided that with respect to any such Collateral the security interest in which may not be perfected by such filing, if perfection of the ABL Collateral Agent’s security interest in such collateral may not be accomplished on or before the Closing Date without undue burden or expense, then delivery of documents and instruments for perfection of such security interest shall not constitute a condition precedent to the initial borrowings hereunder.
(g) Pledged Stock; Stock Powers; Pledged Notes; Endorsements . The ABL Collateral Agent shall have received (subject to the proviso in clause (a) of this subsection 6.1 ):
(i) the certificates, if any, representing the Pledged Stock under (and as defined in) the U.S. Guarantee and Collateral Agreement or any Canadian Security Document, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof; and
(ii) the promissory notes representing each of the Pledged Notes under (and as defined in) the U.S. Guarantee and Collateral Agreement, duly endorsed as required by the U.S. Guarantee and Collateral Agreement.
(h) Fees . The Agents and the Lenders shall have received all fees and expenses that are required to be paid or delivered by the Parent Borrower to them on or prior to the Closing Date (including the fees referred to in subsection 4.5 ) and for which invoices have been provided to the Parent Borrower at least three Business Days prior to the Closing Date, which fees and expenses may be offset against the proceeds of the Facilities.
(i) Secretary’s Certificate . The Administrative Agent shall have received from each of the Borrowers and, substantially concurrently with the satisfaction of the other conditions precedent set forth in this subsection 6.1 , each other Loan Party, dated the Closing Date, substantially in the form of Exhibit M , with appropriate insertions and attachments of resolutions or other actions, evidence of incumbency and the signature of authorized signatories and organizational documents, executed by a Responsible Officer and the Secretary or any Assistant Secretary or other authorized representative of such Loan Party.
(j) Merger Agreement Conditions; Specified Representations . ( i ) The condition in Section 9.2(a) of the Merger Agreement (but only with respect to those representations made by Holding Parent and Holding with respect to itself and their respective Subsidiaries that are material to the interests of the Lenders, and only to the extent that Spinco has the right (without liability) to terminate its obligations, or to decline to consummate the Merger, under the Merger Agreement as a result of a breach of such representations in the Merger Agreement) and the condition in Section 9.3(a) of the Merger Agreement (but only with respect to those representations made by Spinco and the OpCo Borrower with respect to itself and its respective Subsidiaries in the
 
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Merger Agreement that are material to the interest of the Lenders, and only to the extent Holding Parent has the right to terminate its obligations under the Merger Agreement, or to decline to consummate the Merger, as a result of a breach of such representations in the Merger Agreement), in each case shall have been satisfied, as certified by a Responsible Officer of the Borrower Representative or of Unisource, as the case may be, in an officer’s certificate substantially in the form of Exhibit L and ( ii ) the Specified Representations shall be true and correct in all material respects (although any representations and warranties that expressly relate to a given date or period shall be required only to be true and correct in all material respects as of the respective date or the respective period, as the case may be).
(k) Solvency . The Administrative Agent shall have received a certificate of the chief financial officer of the Parent Borrower (or another authorized financial officer of the Parent Borrower) certifying the Solvency of the Parent Borrower substantially in the form of Exhibit K .
(l) Borrowing Base Certificate . The Administrative Agent shall have received a Borrowing Base Certificate, prepared as of the last day of the last month ended at least 25 calendar days prior to the Closing Date, in the form contemplated by subsection 7.2(f) , or such other form as may be reasonably acceptable to the Administrative Agent, setting forth, after giving effect to the Borrowings hereunder on the Closing Date, the Tranche A Canadian Borrowing Base, the Tranche A-1 Canadian Borrowing Base, the Tranche A U.S. Borrowing Base and the Tranche A-1 U.S. Borrowing Base and the Excess Availability (which, after giving effect to the Transactions contemplated herein, the First Draw and any additional borrowing on the Closing Date shall be at least $300,000,000).
(m) Financial Information . The Administrative Agent shall have received ( i ) an unaudited combined balance sheet and the related unaudited combined statement of operations and comprehensive income for the xpedx Business and an unaudited consolidated balance sheet and the related unaudited consolidated statements of operations and comprehensive income/(loss) for UWWH as of, and for the period ended at, the end of the most recent fiscal quarter ended after December 31, 2013 and at least 60 days prior to the Closing Date and for the corresponding period of 2013 and ( ii ) an unaudited pro forma consolidated balance sheet and the related statement of operations of Holding after giving effect to the Transactions for the period from the beginning of the 2014 fiscal year to the end of the latest fiscal quarter referred to in clause (i) hereof.
(n) No Material Adverse Effect . Since June 30, 2013, there shall not have occurred ( x ) any Spinco Material Adverse Effect or ( y ) any UWWH Material Adverse Effect.
(o) Existing Indebtedness . Neither Holdings nor any of its Subsidiaries shall have any outstanding Indebtedness for borrowed money other than the Facility, Capitalized Lease Obligations and such other Indebtedness as the Administrative Agent and the Lead Arrangers shall agree (such agreement not to be unreasonably withheld).
(p) KYC . The Lenders shall have received, to the extent requested in writing at least ten days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations including, without limitation, the Patriot Act and AML Legislation.
 
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The making of the initial Extensions of Credit by the Lenders hereunder shall conclusively be deemed to constitute an acknowledgement by the Administrative Agent and each Lender that each of the conditions precedent set forth in this subsection 6.1 shall have been satisfied in accordance with its respective terms or shall have been irrevocably waived by such Person.
6.2 Conditions Precedent to Each Other Extension of Credit and Letter of Credit Issuance . The obligation of the Issuing Lender on any date (other than the Closing Date) to issue, increase, renew, amend or extend any Letter of Credit or each Lender to make any Extension of Credit (including each Swing Line Loan, but excluding the First Draw, any additional borrowing on the Closing Date hereunder and Agent Advances) requested to be made by it on any date (other than the Closing Date) is subject to the satisfaction of each of the following conditions precedent:
(a) Representations and Warranties; No Defaults . On the date of such issuance, both before and after giving effect thereto and the application of the proceeds therefrom:
(i) all representations and warranties set forth in Section 5 and in the other Loan Documents shall be true and correct in all material respects on and as of the date they are made (although any representations and warranties that expressly relate to a given date or period shall be required only to be true and correct in all material respects as of the respective date or the respective period, as the case may be); and
(ii) no Default or Event of Default shall have occurred and be continuing or would result from any such Extension of Credit after giving effect thereto on the date of such Borrowing.
(b) Request for Issuance of Letter of Credit . With respect to any Letter of Credit, the Issuing Lender shall have received a Letter of Credit Request, completed to its satisfaction, and such other certificates, documents and other papers and information as the Issuing Lender may reasonably request.
(c) Delivery of Borrowing Request . With respect to any Borrowing, the Administrative Agent shall have received a Borrowing Request completed to its satisfaction.
(d) Availability . The requirements of subsection 2.1(a) or 2.1(b) , as applicable, shall be satisfied.
Each Borrowing of Loans by and Letter of Credit issued on behalf of any of the Borrowers hereunder after the Closing Date shall be deemed to constitute a representation and
 
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warranty by the Parent Borrower as of the date of such Borrowing or such issuance that the conditions contained in this subsection 6.2 have been satisfied (except that no opinion need be expressed as to the Administrative Agent’s or the Required Lenders’ satisfaction with any document, instrument or other matter).
 
SECTION 7.	AFFIRMATIVE COVENANTS .	
The Parent Borrower hereby agrees that, from and after the Closing Date and so long as the Commitments remain in effect, and thereafter until payment in full of the Loans, all Reimbursement Obligations and any other amount then due and owing to any Lender or any Agent hereunder and under any Note and termination or expiration of all Letters of Credit (unless cash collateralized or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent), the Parent Borrower shall and (except in the case of delivery of financial information, reports and notices) shall cause each of the Material Restricted Subsidiaries to:
7.1 Financial Statements . Furnish to the Administrative Agent for delivery to each Lender (and the Administrative Agent agrees to make and so deliver such copies):
(a) as soon as available, but in any event not later than the 120th day following the end of the fiscal year of Holding ending on December 31, 2014, and not later than the 90th day following the end of each subsequent fiscal year of Holding thereafter, ( i ) a copy of the consolidated balance sheet of Holding and its consolidated Subsidiaries as at the end of such year and the related consolidated statements of operations and comprehensive income, changes in parent company equity and cash flows for such year, setting forth in each case, in comparative form the figures for and as of the end of the previous year, reported on without qualification arising out of the scope of the audit by Deloitte & Touche LLP or other independent certified public accountants of nationally recognized standing not unacceptable to the Administrative Agent in its reasonable judgment (which report may not contain a “going concern” or like qualification or exception unless such qualification or exception is expressly solely with respect to, or expressly resulting solely from, ( A ) an upcoming Maturity Date under this Agreement that is scheduled to occur within one year from the date such report is delivered or ( B ) any potential inability to satisfy a financial maintenance covenant included in any Indebtedness of the Parent Borrower or its Subsidiaries on a future date or in a future period), and ( ii ) a narrative report and management’s discussion and analysis, in a form reasonably satisfactory to the Administrative Agent, of the financial condition and results of operations for such fiscal year, as compared to amounts for the previous fiscal year (it being agreed that the furnishing of Holding’s annual report on Form 10-K for such year, as filed with the SEC, will satisfy the Parent Borrower’s obligation under this subsection 7.1(a) with respect to such year except with respect to the requirement that such financial statements be reported on without a “going concern” or like qualification or exception (except as expressly permitted above), or a qualification arising out of the scope of the audit);
(b) as soon as available, but in any event not later than ( x ) in the case of the first three quarters for which quarterly statements are required to be delivered hereunder after the Closing Date, the 60th day following the end of each of the first three quarterly
 
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periods of each fiscal year of Holding ending after the Closing Date and ( y ) in the case of each fiscal quarter thereafter, the 45th day following the end of each of the first three quarterly periods of each fiscal year of Holding, ( i ) the unaudited consolidated balance sheet of Holding and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of operations and comprehensive income and cash flows of Holding and its consolidated Subsidiaries for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case, in comparative form the figures for and as of the corresponding periods of the previous year, certified by a Responsible Officer of the Parent Borrower as being fairly stated in all material respects (subject to normal year-end audit and other adjustments) and ( ii ) a narrative report and management’s discussion and analysis, in a form reasonably satisfactory to the Administrative Agent, of the financial condition and results of operations for such fiscal quarter and the then elapsed portion of the fiscal year, as compared to the comparable periods in the previous fiscal year (it being agreed that the furnishing of Holding’s quarterly report on Form 10-Q for such quarter, as filed with the SEC, will satisfy the Parent Borrower’s obligations under this subsection 7.1(b) with respect to such quarter);
(c) to the extent applicable, concurrently with any delivery of consolidated financial statements under subsection 7.1(a) or 7.1(b) , related unaudited consolidating financial statements reflecting the material adjustments necessary (as determined by the Parent Borrower in good faith) to eliminate the accounts of Unrestricted Subsidiaries (if any) from the accounts of the Parent Borrower and its Restricted Subsidiaries; and
(d) all such financial statements delivered pursuant to subsection 7.1(a) or 7.1(b) to (and, in the case of any financial statements delivered pursuant to subsection 7.1(b) , shall be certified by a Responsible Officer of the Parent Borrower to) fairly present in all material respects the financial condition of Holding and its Subsidiaries in conformity with GAAP and to be (and, in the case of any financial statements delivered pursuant to subsection 7.1(b) shall be certified by a Responsible Officer of the Parent Borrower as being) in reasonable detail and prepared in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods that began on or after the Closing Date (except as approved by such accountants or officer, as the case may be, and disclosed therein, and except, in the case of any financial statements delivered pursuant to subsection 7.1(b) , for the absence of certain notes).
7.2 Certificates; Other Information . Furnish to the Administrative Agent for delivery to each Lender (and the Administrative Agent agrees to make and so deliver such copies):
(a) concurrently with the delivery of the financial statements referred to in subsections 7.1(a) and 7.1(b) , a certificate signed by a Responsible Officer setting forth, in reasonable detail, a calculation of the Consolidated Fixed Charge Coverage Ratio as of the last day of the then applicable Test Period;
(b) concurrently with the delivery of the financial statements and reports referred to in subsections 7.1(a) and 7.1(b) , a certificate signed by a Responsible Officer of the Parent Borrower stating that, to the best of such Responsible Officer’s knowledge,
 
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the Parent Borrower and each of its Subsidiaries during such period has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in this Agreement or the other Loan Documents to which it is a party to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default, except, in each case, as specified in such certificate;
(c) as soon as available, but in any event not later than the 120th day following the end of the fiscal year of Holding ending on December 31, 2014 and no later than the 90th day following the end of each subsequent fiscal year of Holding thereafter, a copy of the annual business plan by the Parent Borrower of the projected operating budget (including an annual consolidated balance sheet, statement of operations and comprehensive income and statement of cash flows of Holding and its Subsidiaries), each such business plan to be accompanied by a certificate signed by the Parent Borrower and delivered by a Responsible Officer of the Parent Borrower to the effect that such projections have been prepared on the basis of assumptions believed by the Parent Borrower to be reasonable at the time of preparation and delivery thereof;
(d) within five Business Days after the same are sent, copies of all financial statements and reports which Holding or the Parent Borrower sends to its public security holders, and within five Business Days after the same are filed, copies of all financial statements and periodic reports which Holding or the Parent Borrower may file with the SEC or any successor or analogous Governmental Authority;
(e) within five Business Days after the same are filed, copies of all registration statements and any amendments and exhibits thereto, which Holding or the Parent Borrower may file with the SEC or any successor or analogous Governmental Authority;
(f) not later than 5:00 P.M. (New York City time) ( A ) on or before August 15, 2014, in the case of the Borrowing Base Certificate in respect of the fiscal month ended June 30, 2014 ( provided , that the Parent Borrower shall use its commercially reasonable efforts to deliver the Borrowing Base Certificate in respect of the fiscal month ended June 30, 2014 no later than July 31, 2014), and ( B ) on or before the 25th day of each subsequent month (or ( i ) more frequently as the Parent Borrower may elect, so long as the same frequency of delivery is maintained by the Parent Borrower for the immediately following 60-day period or ( ii ) during the continuance of a Cash Dominion Period, not later than Wednesday of each week, or if Wednesday of such week is not a Business Day, the next succeeding Business Day), a borrowing base certificate setting forth Parent Borrower’s reasonable estimate (based on the most current information reasonably available and calculated in a consistent manner with the most recently delivered monthly certificate or, in the case of the first such certificate delivered under this subsection 7.2(f) , the Borrowing Base Certificate delivered pursuant to subsection 6.1(l) ) of the Tranche A Canadian Borrowing Base, the Tranche A-1 Canadian Borrowing Base, the Tranche A U.S. Borrowing Base and the Tranche A-1 U.S. Borrowing Base (with supporting calculations) substantially in the form of Exhibit N (a “ Borrowing Base Certificate ”), which shall be prepared as of the last Business Day of the
 
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preceding fiscal month of the Parent Borrower and its Subsidiaries (or ( x ) such other applicable more recent date in the case of clause (i) above or ( y ) the previous Friday in the case of clause (ii) above); provided that a revised Borrowing Base Certificate based on the Borrowing Base Certificate most recently delivered shall be delivered promptly after the consummation not in the ordinary course of business of ( 1 ) one or more sales of ABL Priority Collateral with an aggregate value in excess of $25,000,000, ( 2 ) one or more sales or other dispositions of all of the Capital Stock of a Loan Party that owns ABL Priority Collateral with an aggregate value in excess of $25,000,000, or ( 3 ) one or more consolidations, amalgamations or mergers involving any Loan Party that owns ABL Priority Collateral with an aggregate value in excess of $25,000,000, having the effect of causing such Loan Party to cease to be a Loan Party or otherwise adversely affecting the existence, perfection or priority of the Liens of the ABL Collateral Agent in ABL Priority Collateral with an aggregate value in excess of $25,000,000, in each case giving pro forma effect to such sale, disposition, consolidation, amalgamation or merger, as applicable. Each such Borrowing Base Certificate shall include such supporting information as may be reasonably requested from time to time by the Administrative Agent;
(g) concurrently with the delivery of the Borrowing Base Certificate referred to in subsection 7.2(f) , a report setting forth the Specified Unrestricted Cash of the Loan Parties as of the last Business Day of the preceding fiscal month of the Parent Borrower and its Subsidiaries (or ( x ) such other applicable more recent date in the case of clause (i) of subsection 7.2(f) or ( y ) the previous Friday in the case of clause (ii) of subsection 7.2(f) ); and
(h) with reasonable promptness, such additional information (financial or otherwise) as the Administrative Agent on its own behalf or on behalf of any Lender (acting through the Administrative Agent) may reasonably request in writing from time to time.
Documents required to be delivered pursuant to subsection 7.1 or 7.2 may at the Borrower Representative’s option be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date ( A ) in the case of any such documents other than documents required to be delivered pursuant to subsection 7.2(f) ( i ) on which the Borrower Representative posts such documents, or provides a link thereto, on the Parent Borrower’s website on the Internet at the website address listed on Schedule 7.2 (or such other website address as the Borrower Representative may specify by written notice to the Administrative Agent from time to time), or ( ii ) on which such documents are posted on the Parent Borrower’s behalf on an Internet or intranet website to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent) and ( B ) in the case of any such documents required to be delivered pursuant to subsection 7.2(f) , on which the Borrower Representative provides a link thereto on the Parent Borrower’s website on the Internet at the website address listed on Schedule 7.2 (or such other website address as the Parent Borrower may specify by written notice to the Administrative Agent from time to time). Following the electronic delivery of any such documents by posting such documents to a website in accordance with the preceding sentence (other than the posting by the Borrower Representative of any such documents on any website maintained for or sponsored by the
 
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Administrative Agent) the Borrower Representative shall promptly provide the Administrative Agent notice of such delivery (which notice may be by facsimile or electronic mail) and the electronic location at which such documents may be accessed; provided that, in the absence of bad faith, the failure to provide such prompt notice shall not constitute a Default hereunder.
7.3 Payment of Taxes . Pay, discharge or otherwise satisfy at or before they become delinquent all its material Taxes, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings diligently conducted and reserves in conformity with GAAP with respect thereto have been provided on the books of the Parent Borrower or any of its Restricted Subsidiaries, as the case may be, and except to the extent that failure to do so, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
7.4 Maintenance of Existence . Preserve, renew and keep in full force and effect its existence and take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of the business of the Parent Borrower and its Restricted Subsidiaries, taken as a whole, except as otherwise expressly permitted pursuant to subsection 8.3 , provided that the Parent Borrower and its Restricted Subsidiaries shall not be required to maintain any such rights, privileges or franchises and the Parent Borrower’s Restricted Subsidiaries shall not be required to maintain such existence, if the failure to do so would not reasonably be expected to have a Material Adverse Effect; and comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance .
(a) ( i ) Keep all property useful and necessary in the business of the Loan Parties, taken as a whole, in good working order and condition, except where failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; ( ii ) maintain with financially sound and reputable insurance companies insurance on, or self-insure, all property material to the business of the Loan Parties, taken as a whole, in at least such amounts and against at least such risks (but including in any event public liability and business interruption) as are consistent with the past practices of the Loan Parties and otherwise as are usually insured against in the same general area by companies engaged in the same or a similar business; ( iii ) furnish to the Administrative Agent, upon written request, information in reasonable detail as to the insurance carried; and ( iv ) ensure that at all times the Administrative Agent, for the benefit of the Secured Parties, shall be named as an additional insured with respect to liability policies, and the ABL Collateral Agent, for the benefit of the Secured Parties, shall be named as loss payee with respect to property insurance covering Inventory that constitutes Collateral and for the Mortgaged Properties, maintained by any Borrower and any Subsidiary Guarantor that is a Loan Party; provided that, ( A ) except during the continuance of a Cash Dominion Period, the ABL Collateral Agent shall turn over to the Parent Borrower any amounts received by it as loss payee under any such property insurance maintained by such Loan Parties and ( B ) except during the continuance of a Cash Dominion Period, the ABL Collateral Agent agrees that the Parent Borrower and/or the applicable other Borrower or Subsidiary Guarantor shall have the sole right to adjust or settle any claims under such insurance.
 
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(b) With respect to each property of such Loan Parties subject to a Mortgage:
(i) Such Loan Party shall provide life of loan flood zone determinations and, if any portion of any such property is located in an area identified as a Flood Zone by the Federal Emergency Management Agency or other applicable agency, such Loan Party shall maintain or cause to be maintained flood insurance policies in such total amount as is customary with companies in the same or similar business operating in the same or similar locations, and otherwise in compliance with the Flood Program, and upon written request shall furnish to the Administrative Agent evidence of such policies.
(ii) The applicable Loan Party promptly shall comply with and conform to ( i ) all provisions of each such insurance policy, and ( ii ) all requirements of the insurers applicable to such party or to such property or to the use, manner of use, occupancy, possession, operation, maintenance, alteration or repair of such property, except for such non-compliance or non-conformity as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(iii) If any such Loan Party is in default of its obligations to insure or deliver any such prepaid policy or policies, the result of which would reasonably be expected to have a Material Adverse Effect, then the Administrative Agent, at its option upon 10 days’ written notice to the Parent Borrower, may effect such insurance from year to year at rates substantially similar to the rate at which such Loan Party had insured such property, and pay the premium or premiums therefor, and the Parent Borrower shall pay or cause to be paid to the Administrative Agent on demand such premium or premiums so paid by the Administrative Agent with interest from the time of payment at a rate per annum equal to 2.00%.
(iv) If such property, or any part thereof, shall be destroyed or damaged and the reasonably estimated cost thereof would exceed $25,000,000 the Parent Borrower shall give prompt notice thereof to the Administrative Agent. All insurance proceeds paid or payable in connection with any damage or casualty to any such property shall be applied in the manner specified in subsection 7.5(a) .
7.6 Inspection of Property; Discussions .
(a) Permit representatives of the Administrative Agent to visit and inspect any of its properties and examine and, to the extent reasonable, make abstracts from any of its books and records and to discuss the business, operations, properties and financial and other condition of the Parent Borrower and its Restricted Subsidiaries with officers and employees of the Parent Borrower and its Restricted Subsidiaries and with its independent certified public accountants, in each case at any reasonable time, upon reasonable notice; provided that ( a ) representatives of the Parent Borrower may be
 
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present during any such visits, discussions and inspections and ( b ) during the continuation of an Event of Default (and only during the continuation of an Event of Default), the Administrative Agent and its representatives may do any of the foregoing at the Borrowers’ expense.
(b) At reasonable times during normal business hours and upon reasonable prior notice that the Administrative Agent requests, independently of or in connection with the visits and inspections provided for in clause (a) above, the Parent Borrower and its Restricted Subsidiaries will grant access to the Administrative Agent (including employees of the Administrative Agent or any consultants, accountants, lawyers and appraisers retained by the Administrative Agent) to such Person’s premises, books, records, accounts and Inventory so that ( i ) the Administrative Agent or an appraiser retained by the Administrative Agent may conduct an Inventory appraisal and ( ii ) the Administrative Agent may conduct (or engage third parties to conduct) such field examinations, verifications and evaluations as the Administrative Agent may deem reasonably necessary or appropriate. Unless a Cash Dominion Period has commenced and is continuing, or if previously approved by the Parent Borrower, the Administrative Agent may not conduct any “Phase I” or “Phase II” environmental assessment. The Administrative Agent may conduct one field examination and one Inventory appraisal in each calendar year in each case for all of the Loan Parties at each of the Loan Parties’ expense, provided that the Administrative Agent may conduct at the expense of the Loan Parties up to one additional field examination and one additional Inventory appraisal if Excess Availability falls below 25.0% of the Maximum Borrowing Amount for three consecutive Business Days at any time in such calendar year. Notwithstanding anything to the contrary herein, after the occurrence of and during the continuance of an Event of Default, the Administrative Agent may cause such additional field examinations and Inventory appraisals to be taken as the Administrative Agent determines in its reasonable determination are necessary or appropriate each at the expense of the Loan Parties. All amounts chargeable to the applicable Borrowers under this subsection 7.6(b) shall constitute obligations that are secured by all of the applicable Collateral and shall be payable to the Agents hereunder.
7.7 Notices . Promptly give notice to the Administrative Agent and each Lender of:
(a) as soon as possible after a Responsible Officer of the Parent Borrower knows thereof, the occurrence of any Default or Event of Default;
(b) as soon as possible after a Responsible Officer of the Parent Borrower knows thereof, any litigation or proceeding affecting the Parent Borrower or any of its Restricted Subsidiaries that would reasonably be expected to have a Material Adverse Effect;
(c) the following events, as soon as possible and in any event within 30 days (or, in the case of any Canadian Pension Plan containing a defined benefit provision within the meaning of the Income Tax Act (Canada) that is not fully funded at the time of the events listed in clause (i) or (ii) below, five days) after a Responsible Officer of the Parent Borrower or any of its Restricted Subsidiaries knows thereof: ( i ) the occurrence or
 
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expected occurrence of any Reportable Event with respect to any Single Employer Plan or a Pension Event with respect to a Canadian Pension Plan, a failure to make any required contribution to a Canadian Pension Plan, Single Employer Plan or Multiemployer Plan, the creation of any Lien on the property of the Parent Borrower or its Restricted Subsidiaries in favor of the PBGC or any other Governmental Authority, or a Plan or Canadian Pension Plan, any termination of a Single Employer Plan (other than a standard termination pursuant to Section 4041(b) of ERISA) or Canadian Pension Plan or any withdrawal from, or the full or partial termination, Reorganization or Insolvency of, any Multiemployer Plan or Canadian Pension Plan or ( ii ) the institution of proceedings or the taking of any other formal action by the PBGC or any other Governmental Authority or the Parent Borrower or any of its Restricted Subsidiaries or any Commonly Controlled Entity or any Multiemployer Plan or Canadian Pension Plan which could reasonably be expected to result in the termination of any Single Employer Plan (other than a standard termination pursuant to Section 4041(b) of ERISA) or Canadian Pension Plan, or any withdrawal from, or the termination, Reorganization or Insolvency of, any Single Employer Plan, Multiemployer Plan or Canadian Pension Plan; provided , however , that no such notice will be required under clause (i) or (ii) above unless the event giving rise to such notice, when aggregated with all other such events under clause (i) or (ii) above, would be reasonably expected to result in a Material Adverse Effect; and
(d) as soon as possible after a Responsible Officer of the Parent Borrower knows thereof, ( i ) Release by the Parent Borrower or any of its Restricted Subsidiaries of any Materials of Environmental Concern required to be reported under applicable Environmental Laws to any Governmental Authority, unless the Parent Borrower reasonably determines that the total Environmental Costs arising out of such Release would not reasonably be expected to have a Material Adverse Effect, ( ii ) any condition, circumstance, occurrence or event not previously disclosed in writing to the Administrative Agent that would reasonably be expected to result in liability or expense under applicable Environmental Laws, unless the Parent Borrower reasonably determines that the total Environmental Costs arising out of such condition, circumstance, occurrence or event would not reasonably be expected to have a Material Adverse Effect, or would not reasonably be expected to result in the imposition of any lien or other material restriction on the title, ownership or transferability of any facilities and properties owned, leased or operated by the Parent Borrower or any of its Restricted Subsidiaries that would reasonably be expected to result in a Material Adverse Effect, and ( iii ) any proposed action to be taken by the Parent Borrower or any of its Restricted Subsidiaries that would reasonably be expected to subject the Parent Borrower or any of its Restricted Subsidiaries to any material additional or different requirements or liabilities under Environmental Laws, unless the Parent Borrower reasonably determines that the total Environmental Costs arising out of such proposed action would not reasonably be expected to have a Material Adverse Effect;
(e) any loss, damage, or destruction to the Collateral in the amount of the Dollar Equivalent of $25,000,000 or more, whether or not covered by insurance; and
(f) any and all default notices received under or with respect to any lease of any distribution center where Collateral with a book value in excess of the Dollar Equivalent of $25,000,000, either individually or in the aggregate, is located.
 
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Each notice pursuant to this subsection 7.7 shall be accompanied by a statement of a Responsible Officer of the Parent Borrower (and, if applicable, the relevant Commonly Controlled Entity or Subsidiary) setting forth details of the occurrence referred to therein and stating what action the Parent Borrower (or, if applicable, the relevant Commonly Controlled Entity or Subsidiary) proposes to take with respect thereto.
7.8 Compliance with Environmental Laws . ( i ) Comply substantially with, and require substantial compliance by all tenants, subtenants, contractors and invitees with respect to any property leased or subleased from or operated by the Parent Borrower or its Restricted Subsidiaries with, all applicable Environmental Laws including all Environmental Permits and all orders and directions of any Governmental Authority; ( ii ) obtain, comply substantially with and maintain any and all Environmental Permits necessary for its operations as conducted and as planned; and ( iii ) require that all tenants, subtenants, contractors and invitees obtain, comply substantially with and maintain any and all Environmental Permits necessary for their operations as conducted and as planned, with respect to any property leased or subleased from, or operated by the Parent Borrower or its Restricted Subsidiaries. Noncompliance shall not constitute a breach of this subsection 7.8 , provided that, upon learning of any actual or suspected noncompliance, the Parent Borrower and any such affected Subsidiary shall promptly undertake reasonable efforts, if any, to achieve compliance, and provided , further, that in any case such noncompliance would not reasonably be expected to have a Material Adverse Effect.
7.9 After-Acquired Real Property and Fixtures; Addition of Subsidiaries .
(a) With respect to any owned real property or fixtures thereon, in each case with a purchase price or a Fair Market Value at the time of acquisition of at least the Dollar Equivalent of $25,000,000 in which the Parent Borrower or any of its Restricted Subsidiaries that is a Loan Party (and in any event excluding any Foreign Subsidiary (other than Canadian Subsidiaries) and any Excluded Subsidiary) acquires ownership rights at any time after the Closing Date, promptly grant to the ABL Collateral Agent for the benefit of the applicable Lenders, a Lien of record on all such owned real property and fixtures, upon terms reasonably satisfactory in form and substance to the ABL Collateral Agent and in accordance with any applicable requirements of any Governmental Authority (including any required appraisals of such property under FIRREA); provided that ( x ) nothing in this subsection 7.9 shall defer or impair the attachment or perfection of any security interest in any Collateral covered by any of the Security Documents which would attach or be perfected pursuant to the terms thereof without action by any Loan Party or any other Person, ( y ) no such Lien shall be required to be granted as contemplated by this subsection 7.9 on any owned real property or fixtures the acquisition of which is or is to be financed or refinanced in whole or in part through the incurrence of Indebtedness (other than with the proceeds of Revolving Credit Loans, Incremental ABL Term Loans or Swing Line Loans), until such Indebtedness is repaid in full (and not refinanced) or, as the case may be, the Parent Borrower determines not to proceed with such financing or refinancing and ( z ) any such mortgage by a
 
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Canadian Subsidiary shall not secure any U.S. Borrower’s obligations. In connection with any such grant to the ABL Collateral Agent, for the benefit of the Lenders and the other Secured Parties, of a Lien of record on any such real property in accordance with this subsection 7.9 , such Borrower or such Restricted Subsidiary shall deliver or cause to be delivered to the ABL Collateral Agent ( A ) any surveys, title insurance policies, environmental reports and other documents and search results in connection with such grant of such Lien obtained by it in connection with the acquisition of such ownership rights in such real property or as the ABL Collateral Agent shall reasonably request (in light of the value of such real property and the cost and availability of such surveys, title insurance policies, environmental reports and other documents and whether the delivery of such surveys, title insurance policies, environmental reports and other documents would be customary in connection with such grant of such Lien in similar circumstances) and ( B ) life of loan flood zone determinations and, if any portion of any such real property is located in an area identified as a Flood Zone by the Federal Emergency Management Agency, evidence of the flood insurance required under subsection 7.5(b)(i) .
(b) With respect to any Domestic Subsidiary that is a Wholly-Owned Subsidiary (other than an Excluded Subsidiary) created or acquired (including by reason of any Foreign Subsidiary Holdco ceasing to constitute same) subsequent to the Closing Date by the Parent Borrower or any of its Domestic Subsidiaries (other than an Excluded Subsidiary), promptly notify the Administrative Agent of such occurrence and, if the Administrative Agent or the Required Lenders so request, ( i ) promptly execute and deliver to the ABL Collateral Agent for the benefit of the Secured Parties such amendments to the U.S. Guarantee and Collateral Agreement as the ABL Collateral Agent shall reasonably deem necessary or reasonably advisable to grant to the ABL Collateral Agent, for the benefit of the Secured Parties, a perfected security interest (as and to the extent provided in the U.S. Guarantee and Collateral Agreement) in the Capital Stock of such new Domestic Subsidiary, ( ii ) promptly deliver to the ABL Collateral Agent (subject to the terms of any applicable Intercreditor Agreement) the certificates (if any) representing such Capital Stock, together with undated stock powers, executed and delivered in blank by a duly authorized officer of the parent of such new Domestic Subsidiary, ( iii ) promptly cause such new Domestic Subsidiary ( A ) to become a party to the U.S. Guarantee and Collateral Agreement, ( B ) at the Borrower Representative’s option, become a party to this Agreement as a Borrower hereunder by executing a Joinder Agreement and ( C ) to take all actions reasonably deemed by the ABL Collateral Agent to be necessary or advisable to cause the Lien created by the U.S. Guarantee and Collateral Agreement in such new Domestic Subsidiary’s Collateral to be duly perfected in accordance with all applicable Requirements of Law, including the filing of financing statements in such jurisdictions as may be reasonably requested by the ABL Collateral Agent and ( iv ) prior to including such new Domestic Subsidiary’s assets in the applicable Borrowing Base, the Administrative Agent shall conduct an appraisal and field examination with respect to such Domestic Subsidiary, including, without limitation, of ( x ) such Domestic Subsidiary’s practices in the computation of its Borrowing Base and ( y ) the assets included in such Domestic Subsidiary’s Borrowing Base and related financial information such as, but not limited to, sales, gross margins, payables, accruals and reserves, in each case, prepared on a basis reasonably satisfactory to the
 
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Administrative Agent and at the sole expense of the Loan Parties; provided , that no such appraisal or field examination shall be required as a condition to such new Domestic Subsidiary’s assets being included in the applicable Borrowing Base hereunder if such new Domestic Subsidiary’s Accounts, Inventory, In-Transit Inventory, Letter of Credit Inventory and Credit Card Receivables would constitute less than 5% in the aggregate of the aggregate Borrowing Base in effect after giving effect to the joinder of such new Domestic Subsidiary.
(c) ( I ) With respect to any Foreign Subsidiary or any Domestic Subsidiary that is not a Wholly-Owned Subsidiary (other than an Excluded Subsidiary), created or acquired subsequent to the Closing Date by the Parent Borrower or any of its Domestic Subsidiaries that are Wholly-Owned Subsidiaries (other than an Excluded Subsidiary), the Capital Stock of which is owned directly by the Parent Borrower or any of its Domestic Subsidiaries (other than an Excluded Subsidiary) (including by reason of any indirectly owned Foreign Subsidiary becoming directly owned by the Parent Borrower or any of its Domestic Subsidiaries (other than an Excluded Subsidiary)), promptly notify the Administrative Agent of such occurrence and if the Administrative Agent or the Required Lenders so request, promptly ( i ) execute and deliver to the ABL Collateral Agent for the benefit of the U.S. Secured Parties a new pledge agreement or such amendments to the U.S. Guarantee and Collateral Agreement as the ABL Collateral Agent shall reasonably deem necessary or reasonably advisable to grant to the ABL Collateral Agent, for the benefit of the U.S. Secured Parties, a perfected security interest (as and to the extent provided in the U.S. Guarantee and Collateral Agreement) in the Capital Stock of such new Foreign Subsidiary or Domestic Subsidiary that is directly owned by the Parent Borrower or any of its Domestic Subsidiaries that is a Wholly-Owned Subsidiary (other than an Excluded Subsidiary) ( provided that in no event shall more than 65% of the Capital Stock of any such new Foreign Subsidiary that is so owned be required to be so pledged and, provided , further , that no such pledge or security shall be required with respect to any non-wholly owned Foreign Subsidiary or Domestic Subsidiary to the extent that the grant of such pledge or security interest would violate the terms of any agreements under which the Investment by the Parent Borrower or any of its Subsidiaries was made therein other than any agreement entered into primarily for the purposes of imposing such a restriction) and ( ii ) to the extent reasonably deemed advisable by the ABL Collateral Agent, deliver to the ABL Collateral Agent (subject to the terms of any applicable Intercreditor Agreement) the certificates, if any, representing such Capital Stock, together with undated stock powers, executed and delivered in blank by a duly authorized officer of the relevant parent of such new Foreign Subsidiary or Domestic Subsidiary and take such other action as may be reasonably deemed by the ABL Collateral Agent to be necessary or desirable to perfect the ABL Collateral Agent’s security interest therein. ( II ) With respect to any Canadian Subsidiary that is a Wholly-Owned Subsidiary created or acquired subsequent to the Closing Date by the Canadian Borrower or any Canadian Subsidiary Guarantor, ( A ) promptly execute and deliver to the ABL Collateral Agent for the benefit of the Canadian Secured Parties such amendments to the Canadian Security Documents as the ABL Collateral Agent shall reasonably deem necessary or reasonably advisable to grant to the ABL Collateral Agent, for the benefit of the Canadian Secured Parties, a perfected first priority security interest (as and to the extent provided in the Canadian Guarantee and Collateral Agreement) in the Capital
 
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Stock of such new Canadian Subsidiary, ( B ) promptly cause such new Canadian Subsidiary ( x ) to become a party to the Canadian Security Documents and ( y ) to take all actions reasonably deemed by the ABL Collateral Agent to be necessary or advisable to cause the Liens created by the Canadian Security Documents in such new Canadian Subsidiary’s Collateral to be duly perfected in accordance with all applicable Requirements of Law, including, without limitation, the filing of financing statements or equivalents in such jurisdictions as may be reasonably requested by the ABL Collateral Agent and ( C ) prior to including such new Canadian Subsidiary’s assets in the applicable Borrowing Base, the Administrative Agent shall conduct an appraisal and field examination with respect to such Canadian Subsidiary, including, without limitation, of ( x ) such Canadian Subsidiary’s practices in the computation of its Borrowing Base and ( y ) the assets included in such Canadian Subsidiary’s Borrowing Base and related financial information such as, but not limited to, sales, gross margins, payables, accruals and reserves, in each case, prepared on a basis reasonably satisfactory to the Administrative Agent and at the sole expense of the Loan Parties; provided , that no such appraisal or field examination shall be required as a condition to such new Canadian Subsidiary’s assets being included in the applicable Borrowing Base hereunder if such new Canadian Subsidiary’s Accounts, Inventory, In-Transit Inventory, Letter of Credit Inventory and Credit Card Receivables would constitute less than 5% in the aggregate of the aggregate Borrowing Base in effect after giving effect to the joinder of such new Canadian Subsidiary.
(d) At its own expense, execute, acknowledge and deliver, or cause the execution, acknowledgement and delivery of, and thereafter register, file or record in an appropriate governmental office, any document or instrument reasonably deemed by the ABL Collateral Agent to be necessary or desirable for the creation, perfection and priority and the continuation of the validity, perfection and priority of the foregoing Liens or any other Liens created pursuant to the Security Documents.
(e) Notwithstanding anything to the contrary in this Agreement, ( A ) the foregoing requirements shall be subject to the terms of any applicable Intercreditor Agreement and, in the event of any conflict with such terms, the terms of the applicable Intercreditor Agreement shall control, ( B ) no security interest or Lien is or will be granted pursuant to any Loan Document or otherwise in any right, title or interest of any of Holdings, the Parent Borrower or any of its Subsidiaries in, and “Collateral” shall not include, any Excluded Asset, ( C ) no Loan Party or any Affiliate thereof shall be required to take any action in any non-U.S. jurisdiction (other than Canada) or required by the laws of any non-U.S. jurisdiction (other than Canada) in order to create any security interests in assets located or titled outside of the United States (other than Canada) or to perfect any security interests (it being understood that there shall be no security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction (other than Canada)) and ( D ) nothing in this subsection 7.9 shall require that any Loan Party grant a Lien with respect to any owned real property or fixtures in which such Loan Party acquires ownership rights to the extent that the Administrative Agent, in its reasonable judgment, determines that the granting of such a Lien is impracticable.
 
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7.10 Maintenance of New York Process Agent . In the case of the Canadian Loan Parties, maintain in New York, New York or at such other location in the United States of America as may be reasonably satisfactory to the Administrative Agent a Person acting as agent to receive on its behalf and on behalf of its property service of process and capable of discharging the functions of the New York Process Agent set forth in subsection 11.13(f) .
7.11 Post-Closing Security Perfection . The Parent Borrower agrees to deliver or cause to be delivered such documents and instruments, and take or cause to be taken such other actions as may be reasonably necessary to provide the perfected security interests and guarantees described in subsection 6.1(a)(ii) and (iii) , 6.1(f) and 6.1(g) that are not so provided on the Closing Date and to satisfy each other condition precedent that was not actually satisfied, but rather “deemed” satisfied on the Closing Date pursuant to the provisions set forth in subsection 6.1 , and in any event to provide such perfected security interests and guarantees and to satisfy such other conditions within the applicable time periods set forth on Schedule 7.11 , as such time periods may be extended by the Administrative Agent, in its sole discretion.
 
SECTION 8.	NEGATIVE COVENANTS .	
The Parent Borrower hereby agrees that, from and after the Closing Date and so long as the Commitments remain in effect, and thereafter until payment in full of the Loans, all Reimbursement Obligations and any other amount then due and owing to any Lender or any Agent hereunder and under any Note and termination or expiration of all Letters of Credit (unless cash collateralized or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent):
8.1 Limitation on Indebtedness . The Parent Borrower will not, and will not permit any Material Restricted Subsidiary to, directly or indirectly create, incur, assume or otherwise become directly or indirectly liable with respect to any Indebtedness except for the following:
(a) Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries incurred ( 1 ) pursuant to this Agreement and the other Loan Documents (including any Incremental Facility) and ( 2 ) any Refinancing Indebtedness in respect thereof;
(b) Indebtedness outstanding, or incurred under facilities in existence, on the Closing Date and listed on Schedule 8.1 , and any Refinancing Indebtedness in respect thereof;
(c) Guarantee Obligations incurred by:
(i) the Parent Borrower or any of its Restricted Subsidiaries in respect of Indebtedness of a Loan Party that is permitted hereunder; provided that such Guarantee Obligations in respect of Indebtedness permitted pursuant to clause (i) shall be permitted only to the extent that such Guarantee Obligations are incurred by Guarantors or Foreign Subsidiaries (other than Canadian Subsidiaries) that are not Guarantors;
 
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(ii) the Parent Borrower or any of its Restricted Subsidiaries in respect of lease obligations of Subsidiaries that are not Loan Parties (to the extent such lease obligations constitute Indebtedness);
(iii) a Non-Loan Party in respect of Indebtedness of another Non-Loan Party that is permitted hereunder;
(iv) the Parent Borrower or any of its Restricted Subsidiaries in respect of Indebtedness of any Person; provided that the aggregate amount at any time outstanding of such Guarantee Obligations incurred pursuant to this clause (iv), when aggregated with the amount of all Indebtedness incurred and outstanding pursuant to clause (t) of this subsection 8.1 , shall not exceed the greater of ( x ) $100,000,000 and ( y ) the amount equal to [ — ]% of Consolidated Total Assets at the time of such Guarantee Obligations being incurred, and any Refinancing Indebtedness in respect thereof;
(v) [reserved];
(vi) the Parent Borrower or any of its Restricted Subsidiaries consisting of accommodation guarantees for the benefit of trade creditors of the Parent Borrower or any of its Restricted Subsidiaries in the ordinary course of business;
(vii) the Parent Borrower or any of its Restricted Subsidiaries in respect of Investments permitted pursuant to clause (l), (m) or (u) of the definition of “Permitted Investments”;
(viii) the Parent Borrower or any of its Restricted Subsidiaries in respect of ( x ) Management Guarantees and ( y ) third-party loans and advances to officers or employees of any Parent or the Parent Borrower or any of its Restricted Subsidiaries permitted pursuant to clause (l) or (m) of the definition of “Permitted Investments”;
(ix) the Parent Borrower or any of its Restricted Subsidiaries in respect of Reimbursement Obligations in respect of Letters of Credit or with respect to reimbursement obligations in respect of any other letters or credit permitted under this Agreement;
(x) the Parent Borrower or any of its Restricted Subsidiaries in respect of performance, bid, appeal, surety, judgment, replevin and similar bonds, other suretyship arrangements, other similar obligations and letters of credit, bankers’ acceptances or similar instruments or obligations, all in, or relating to liabilities or obligations incurred in, the ordinary course of business; and
(xi) the Parent Borrower or any of its Restricted Subsidiaries in respect of Indebtedness or other obligations of a Person (other than Holding, the Parent Borrower or any of its Restricted Subsidiaries) in connection with a joint venture or similar arrangement in respect of which the aggregate outstanding amount of all such Indebtedness, together with the aggregate outstanding amount of Investments permitted pursuant to clauses (q), (j)(b) and (u) of the definition of “Permitted Investments”, does not exceed $75,000,000;
 
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provided , however , that if any Indebtedness referred to in clauses (i) through (iv) above is subordinated in right of payment to the Obligations hereunder or is secured by Liens that are subordinate to any Liens securing the Collateral, then any corresponding Guarantee Obligations shall be subordinated and the Liens securing the corresponding Guarantee Obligations shall be subordinate to substantially the same extent;
(d) ( x ) Purchase Money Obligations, Capitalized Lease Obligations and other Indebtedness incurred by the Parent Borrower or a Restricted Subsidiary of the Parent Borrower to finance the acquisition, leasing, construction or improvement of fixed assets; provided , that the aggregate principal amount of any such Purchase Money Obligations, Capitalized Lease Obligations and other Indebtedness at any time outstanding pursuant to this clause (d) shall not exceed an amount equal to the greater of ( 1 ) $150,000,000 and ( 2 ) [ — ]% of Consolidated Total Assets and ( y ) in each case under this clause (d) any Refinancing Indebtedness in respect thereof;
(e) ( i ) factoring arrangements of any Foreign Subsidiary (other than a Canadian Subsidiary) in respect of its assets, to the extent such factoring arrangements constitute Indebtedness, and ( ii ) any other Indebtedness of any Foreign Subsidiary (other than a Canadian Subsidiary) in an aggregate principal amount at any time outstanding not exceeding the greater of ( x ) $75,000,000 and ( y ) [ — ]% of Consolidated Total Assets plus, in the event of any refinancing of any Indebtedness incurred under this clause (e)(ii), the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) incurred or payable in connection with such refinancing;
(f) Indebtedness of the Parent Borrower or any Restricted Subsidiary to Holding or the Parent Borrower or any of its Subsidiaries to the extent the Investment in such Indebtedness is not restricted by subsection 8.5 ;
(g) Indebtedness incurred under any agreement pursuant to which a Person provides cash management services or similar financial accommodations to the Parent Borrower or any of its Restricted Subsidiaries (including any Bank Products Agreements);
(h) Indebtedness constituting indemnities, obligations in respect of earnouts or other purchase price adjustments (including pension plan adjustments and contingent payments adjustments), or similar obligations under the Contribution Agreement or the Merger Agreement or under any agreement entered into in connection with any Permitted Acquisition or disposition;
(i) ( x ) Indebtedness incurred or assumed in connection with, or as a result of, a Permitted Acquisition so long as: (i)  with respect to any newly incurred Indebtedness, such Indebtedness is not secured by ABL Priority Collateral (except for junior Liens effected pursuant to the Base Intercreditor Agreement), ( ii ) the Parent Borrower would be
 
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in compliance, on a pro forma basis after giving effect to the consummation of such acquisition and the incurrence or assumption of such Indebtedness, with subsection 8.9 recomputed as of the last day of the most recently ended fiscal quarter of the Parent Borrower for which financial statements are available, whether or not compliance with subsection 8.9 is otherwise required at such time (it being understood that, as a condition precedent to the effectiveness of any such incurrence or assumption, the Borrower Representative shall deliver to the Administrative Agent a certificate of a Responsible Officer setting forth in reasonable detail the calculations demonstrating such compliance), ( iii ) before and after giving effect thereto, no Default or Event of Default has occurred and is continuing, and ( iv ) with respect to any newly incurred Indebtedness, such Indebtedness does not have any maturity or amortization rate greater than 2.5% per annum prior to the date that is 91 days after the Maturity Date (other than ( 1 ) mandatory prepayments with proceeds of and exchanges for refinancing Indebtedness in respect thereof permitted hereunder or ( 2 ) an earlier maturity date and/or higher amortization rate for customary bridge financings, which, subject to customary conditions, would either be automatically converted into or required to be exchanged for permanent financing which does not provide for an earlier maturity date or an amortization rate greater than 2.5% per annum prior to the date that is 91 days after the Maturity Date and other mandatory prepayments with proceeds of and exchanges for refinancing Indebtedness in respect thereof permitted hereunder); it being understood that, in the event that any such Indebtedness incurred under this subsection 8.1(i) is incurred in good faith to finance the purchase price of any such acquisition in advance of the closing of such acquisition, and such closing shall thereafter not occur and such Indebtedness (or an equal principal amount of other Indebtedness) is redeemed, repaid or otherwise retired promptly after the Borrower Representative determines that such transaction has been abandoned, such Indebtedness shall be deemed to comply with this subsection 8.1(i) and ( y ) any Refinancing Indebtedness in respect thereof;
(j) Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries incurred to finance insurance premiums or consisting of take-or-pay obligations contained in supply arrangements, in each case in the ordinary course of business;
(k) Indebtedness arising from the honoring of a check, draft or similar instrument against insufficient funds and which is extinguished within five Business Days of its incurrence;
(l) Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries in respect of Capitalized Lease Obligations which have been funded solely by Investments of the Parent Borrower and its Restricted Subsidiaries permitted under clause (r) of the definition of “Permitted Investments”;
(m) ( x ) Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries arising in connection with industrial development or revenue bonds or similar obligations secured by property or assets leased to and operated by the Parent Borrower or such Restricted Subsidiary that were issued in connection with the financing or refinancing of such property or assets, provided , that the aggregate principal amount of such Indebtedness outstanding at any time shall not exceed $100,000,000 and ( y ) any Refinancing Indebtedness in respect thereof;
 
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(n) Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries in respect of obligations evidenced by bonds, debentures, notes or similar instruments issued as payment-in-kind interest payments in respect of Indebtedness otherwise permitted hereunder;
(o) accretion of the principal amount of Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries otherwise permitted hereunder issued at any original issue discount;
(p) Indebtedness of the Parent Borrower and its Restricted Subsidiaries under Interest Rate Agreements, Currency Agreement or Commodities Agreement and other Hedging Obligations to the extent and only to the extent that, such agreements or arrangements are entered into, purchased or otherwise acquired other than for purposes of speculation;
(q) Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries in respect of any Sale and Leaseback Transaction;
(r) Indebtedness in respect of any letters of credit issued in favor of any Issuing Lender or the Swing Line Lender to support any Defaulting Lender’s participation in Letters of Credit or Swing Line Loans as provided for in subsection 3.4 , in each case to the extent not exceeding the maximum amount of such participations;
(s) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(t) ( x ) other Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries; provided that the aggregate principal amount outstanding at any time of such Indebtedness incurred or assumed pursuant to this clause (t), when aggregated with the principal amount of all Guarantee Obligations incurred and outstanding pursuant to subsection 8.1(c)(iv) , shall not exceed the greater of ( i ) $100,000,000 and ( ii ) the amount equal to [ — ]% of the Consolidated Total Assets at the time of incurrence of such Indebtedness and ( y ) any Refinancing Indebtedness in respect thereof;
(u) Indebtedness in respect of performance, bid, appeal, surety, judgment, replevin and similar bonds, other suretyship arrangements, other similar obligations, letters of credit, bankers’ acceptances or similar instruments or obligations, and take-or-pay obligations under supply arrangements, all provided in, or relating to liabilities or obligations incurred in, the ordinary course of business, including those issued to government entities in connection with self-insurance under applicable workers’ compensation statutes;
(v) Indebtedness representing deferred compensation to employees of Holding, the Parent Borrower and the Restricted Subsidiaries incurred in the ordinary course of business;
 
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(w) Indebtedness ( A ) of any Special Purpose Subsidiary secured by a Lien on all or part of the assets disposed of in, or otherwise incurred in connection with, a Financing Disposition or ( B ) otherwise incurred in connection with a Special Purpose Financing; provided that ( 1 ) such Indebtedness is not recourse to the Parent Borrower or any Restricted Subsidiary that is not a Special Purpose Subsidiary (other than with respect to Special Purpose Financing Undertakings), ( 2 ) in the event such Indebtedness shall become recourse to the Parent Borrower or any Restricted Subsidiary that is not a Special Purpose Subsidiary (other than with respect to Special Purpose Financing Undertakings), such Indebtedness is permitted by one or more of the other provisions of this subsection 8.1 for so long as such Indebtedness shall be so recourse and ( 3 ) in the event that at any time thereafter such Indebtedness shall comply with the provisions of the preceding subclause (1), such Indebtedness shall be permitted under this clause (w) of subsection 8.1 ;
(x) Indebtedness of the Parent Borrower or any of its Subsidiaries borrowed against the cash surrender value of the life insurance policies and executive split dollar life insurance policies owned by the Parent Borrower on the lives of certain present and former employees of the Parent Borrower and its Subsidiaries; provided that ( i ) any such Indebtedness is either unsecured or secured solely by such policies and ( ii ) the aggregate amount of such Indebtedness borrowed against each such policy at any time shall not exceed the cash surrender value of such policy at such time;
(y) ( i ) unsecured subordinated Indebtedness of a Loan Party issued to the seller of assets or equity interests acquired in a Permitted Acquisition or an Investment permitted hereunder to pay all or a portion of the purchase price thereof; provided that ( x ) principal and interest on such Indebtedness shall not be paid or payable in cash until 91 days after the Maturity Date and ( y ) such Indebtedness shall have such other terms and conditions (including, without limitation, subordination provisions) that are reasonably satisfactory to the Administrative Agent and ( ii ) any Refinancing Indebtedness in respect thereof;
(z) ( 1 ) other Indebtedness; provided that on the date of the Incurrence of such Indebtedness after giving effect to such Incurrence (or on the date of the initial borrowing of such Indebtedness after giving pro forma effect to the Incurrence of the entire committed amount of such Indebtedness), the Consolidated Secured Leverage Ratio shall not exceed 5.00:1.00 (it being understood that for purposes of such calculation of the Consolidated Secured Leverage Ratio, any Indebtedness incurred under this clause (z) shall be treated as if such amount is Consolidated Secured Indebtedness regardless of whether such amount is actually secured) and ( 2 ) any Refinancing Indebtedness in respect thereof;
(aa) other unsecured Indebtedness; provided that at the time of incurrence of such Indebtedness the Payment Condition is satisfied; and
(bb) Repurchase Debt; provided that the aggregate amount of principal and interest payable thereon in cash during any fiscal year or during the term of this Agreement shall not exceed those amounts which the Parent Borrower would be permitted to distribute for such payments under subsection 8.5(b)(v) .
 
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For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness (including Guarantee Obligations) incurred pursuant to and in compliance with, this subsection 8.1 , ( i ) in the event that any Indebtedness (including Guarantee Obligations) meets the criteria of more than one of the types of Indebtedness (including Guarantee Obligations) described in one or more clauses of this subsection 8.1 , the Parent Borrower, in its sole discretion, shall classify such item of Indebtedness and may include the amount and type of such Indebtedness in one or more of the clauses of this subsection 8.1 (including in part under one such clause and in part under another such clause), ( ii ) the amount of any Indebtedness denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of such Indebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness), on the date that such Indebtedness was incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness); provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (or in a different currency from the Indebtedness being refinanced), and such refinancing would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed ( 1 ) the principal amount of such Indebtedness being refinanced plus ( 2 ) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) incurred or payable in connection with such refinancing, ( iii ) if any Indebtedness is incurred to refinance Indebtedness initially incurred in reliance on a basket measured by reference to a percentage of Consolidated Total Assets at the time of incurrence, and such refinancing would cause the percentage of Consolidated Total Assets restriction to be exceeded if calculated based on the Consolidated Total Assets on the date of such refinancing, such percentage of Consolidated Total Assets restriction shall not be deemed to be exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) incurred or payable in connection with such refinancing, ( iv ) the amount of Indebtedness issued at a price that is less than the principal amount thereof shall be equal to the amount of the liability in respect thereof determined in accordance with GAAP and ( v ) the principal amount of Indebtedness outstanding under any subclause of subsection 8.1 , shall be determined after giving effect to the application of proceeds of any such Indebtedness to refinance any such other Indebtedness.
8.2 Limitation on Liens . The Parent Borrower will not, and will not permit any Material Restricted Subsidiary to, create or suffer to exist, any Lien upon or with respect to any of their respective properties or assets, whether now owned or hereafter acquired, or assign, or permit any of their respective Restricted Subsidiaries to assign, any right to receive income, except for the following (collectively, “ Permitted Liens ”):
(a) Permitted Prior Liens;
 
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(b) Liens created pursuant to the Security Documents;
(c) Liens existing on, or provided for under written arrangements existing on, the Closing Date, which Liens or arrangements are set forth on Schedule 8.2 , or securing any Refinancing Indebtedness in respect of such Indebtedness so long as the Lien securing such Refinancing Indebtedness is limited to all or part of the same property or assets ( plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or under such written arrangements could secure) the original Indebtedness;
(d) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) under Interest Rate Agreements, Currency Agreements or Commodities Agreements and other Hedging Obligations Incurred in compliance with subsection 8.1(p) hereof; provided , that ( i ) (except in the case of Liens on cash and Cash Equivalents as permitted under clause (iii) below) such Liens shall only extend to ABL Priority Collateral to the extent such Interest Rate Agreements, Currency Agreements, Commodities Agreements and other Hedging Obligations constitute Secured Bank Product Obligations, ( ii ) upon the termination and non-replacement of such Hedging Obligations and Bank Products Obligations, such cash and Cash Equivalents are deposited in an account with respect to which a control agreement is in place between the applicable Loan Party, the applicable depositary institution and the Administrative Agent or the ABL Collateral Agent, or applied to secure other Indebtedness permitted by subsection 8.1(p) hereof and ( iii ) to the extent such Indebtedness does not constitute Secured Bank Product Obligations, the aggregate outstanding amount of collateral (which may include cash and Cash Equivalents but no other ABL Priority Collateral) provided in respect of Hedging Obligations or Bank Products Obligations secured by such Liens (when created), when aggregated with the amount of all other collateral provided in respect of Hedging Obligations or Bank Products Obligations secured by other Liens incurred and outstanding under this clause (d)(iii), shall not exceed the greater of ( x ) $10,000,000 and ( y ) the amount equal to [ — ]% of Consolidated Total Assets at the time such obligations are incurred;
(e) Liens (including Purchase Money Obligation Liens) granted by the Parent Borrower or any of its Restricted Subsidiaries (including the interest of a lessor under a capitalized lease and Liens to which any property is subject at the time, on or after the Closing Date, of the Parent Borrower’s or such Restricted Subsidiary’s acquisition thereof) securing Indebtedness permitted under subsection 8.1(d) and limited in each case to the property purchased with the proceeds of such Indebtedness or subject to such Lien or Capitalized Lease Obligation;
(f) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) consisting of ( i ) Indebtedness Incurred in compliance with subsection 8.1(j) , 8.1(q) , 8.1(r) or 8.1(x) , ( ii ) Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor (limited in the case of this clause (ii), to Liens on any of the property and assets of any Restricted Subsidiary that is not a Subsidiary Guarantor), ( iii ) Indebtedness or other obligations of any Special Purpose Entity, ( iv ) [reserved], or ( v ) Indebtedness of the Parent Borrower and its Subsidiaries permitted by
 
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subsection 8.1(m) on the property or assets described in subsection 8.1(m) , or ( vi ) Liens on cash, Cash Equivalents and Temporary Cash Investments in respect of obligations described in subsection 8.1(u) (whether or not such obligations constitute Indebtedness);
(g) Liens on assets of any Foreign Subsidiary (other than a Canadian Subsidiary) of the Parent Borrower securing Indebtedness of any Foreign Subsidiary permitted to be incurred by such Foreign Subsidiary;
(h) Liens in favor of lessors securing operating leases permitted hereunder;
(i) statutory or common law Liens or rights of setoff of depository banks or securities intermediaries with respect to deposit accounts, securities accounts or other funds of the Parent Borrower or any Restricted Subsidiary maintained at such banks or intermediaries, including to secure fees and charges in connection with returned items or the standard fees and charges of such banks or intermediaries in connection with the deposit accounts, securities accounts or other funds maintained by the Parent Borrower or such Restricted Subsidiary at such banks or intermediaries (excluding any Indebtedness for borrowed money owing by the Parent Borrower or such Restricted Subsidiary to such banks or intermediaries);
(j) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Parent Borrower or its Restricted Subsidiaries in the ordinary course of business;
(k) Liens securing Indebtedness of the Parent Borrower and its Restricted Subsidiaries permitted by subsection 8.1(l) ;
(l) leases, subleases, licenses or sublicenses to or from third parties;
(m) any encumbrance or restriction (including, but not limited to, put and call agreements or buy/sell arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(n) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) consisting of Refinancing Indebtedness Incurred in respect of any Indebtedness secured by, or securing any refinancing, refunding, extension, renewal or replacement (in whole or in part) of any other obligation secured by, any Permitted Liens, provided that any such new Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the obligations to which such Liens relate;
(o) Liens on assets of the Parent Borrower or any of its Restricted Subsidiaries not otherwise permitted by the other clauses of this subsection 8.2 securing obligations or other liabilities of the Parent Borrower or any of its Restricted Subsidiaries; provided that the aggregate outstanding amount of obligations and liabilities secured by such Liens (when created), when aggregated with the amount of all other obligations and liabilities secured by other Liens incurred and outstanding under this clause (o), shall not exceed
 
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the greater of ( i ) $25,000,000 and ( ii ) the amount equal to [ — ]% of Consolidated Total Assets at the time such obligations are incurred; provided that any Lien securing Indebtedness, when aggregated with the amount of all other obligations and liabilities secured by other Liens incurred and outstanding under this proviso, exceeding $5,000,000 and created pursuant to this clause (o) on ABL Priority Collateral shall be junior to the Lien on ABL Priority Collateral securing the Obligations under this Facility and subject to the terms of the Base Intercreditor Agreement or otherwise be on terms reasonably satisfactory to the Administrative Agent;
(p) Liens securing other Indebtedness consisting of Indebtedness Incurred in compliance with subsection 8.1(z) ; provided that any such Liens on ABL Priority Collateral securing Indebtedness pursuant to subsection 8.1(z) are junior in priority to the Liens securing the Indebtedness hereunder, which priority may be effected pursuant to the Base Intercreditor Agreement or otherwise (it being understood that any such Liens on Non-ABL Priority Collateral securing Indebtedness pursuant to subsection 8.1(z) may be senior in priority to the Liens securing the Indebtedness hereunder);
(q) Liens on Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;
(r) Liens on property or assets that do not constitute ABL Priority Collateral in favor of any Special Purpose Entity in connection with any Financing Disposition;
(s) Liens existing on property or assets of a Person at the time such Person becomes a Subsidiary of the Parent Borrower (or at the time the Parent Borrower or a Restricted Subsidiary acquires such property or assets, including any acquisition by means of a merger, amalgamation or consolidation with or into the Parent Borrower or any Restricted Subsidiary) or securing Indebtedness permitted under subsection 8.1(i) assumed in connection with a Permitted Acquisition; provided , however , that such Liens are not created in connection with, or in contemplation of, such other Person becoming such a Subsidiary (or such acquisition of such property or assets), and that such Liens are limited to all or part of the same property or assets ( plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which such Liens arose, could secure) the obligations to which such Liens relate; provided , further , that for purposes of this clause (s), if a Person other than the Parent Borrower is the Successor Company with respect thereto, any Subsidiary thereof shall be deemed to become a Subsidiary of the Parent Borrower, and any property or assets of such Person or any such Subsidiary shall be deemed acquired by the Parent Borrower or a Restricted Subsidiary, as the case may be, when such Person becomes such Successor Company; and
(t) Liens in respect of Guarantee Obligations permitted under subsection 8.1(c) relating to Indebtedness otherwise permitted under subsection 8.1 , to the extent Liens in respect of such Indebtedness are permitted under this subsection 8.2 .
 
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8.3 Limitation on Fundamental Changes .
(a) The Parent Borrower will not, and will not permit any other Borrower to, consolidate with or merge or amalgamate with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless:
(i) in the case of the Parent Borrower, the resulting, surviving or transferee Person (the “ Successor Company ”) will be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Parent Borrower) will expressly assume all the obligations of the Parent Borrower under this Agreement and the Loan Documents to which it is a party by executing and delivering to the Administrative Agent a joinder or one or more other documents or instruments in form reasonably satisfactory to the Administrative Agent;
(ii) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default will have occurred and be continuing;
(iii) the Payment Condition is satisfied;
(iv) each applicable Borrower or Subsidiary Guarantor (other than ( x ) the Parent Borrower, ( y ) any Borrower that will be released from its obligations hereunder or any Subsidiary Guarantor that will be released from its obligations under its Subsidiary Guarantee, in each case in connection with such transaction and ( z ) any party to any such consolidation, amalgamation or merger) shall have delivered a joinder or other document or instrument in form reasonably satisfactory to the Administrative Agent, confirming its obligations hereunder or its Subsidiary Guarantee under the Guarantee and Collateral Agreement, as applicable (other than any Borrower that will be released from its obligation hereunder or any Subsidiary Guarantee that will be discharged or terminated, in each case in connection with such transaction);
(v) to the extent required to be Collateral pursuant to the terms of the Security Documents and this Agreement, the Collateral owned by the Successor Company will ( x ) continue to constitute Collateral under the applicable Security Documents and ( y ) be subject to a Lien in favor of the ABL Collateral Agent;
(vi) the Parent Borrower will have delivered to the Administrative Agent a certificate signed by a Responsible Officer and a legal opinion each to the effect that such consolidation, merger, amalgamation or transfer complies with the provisions described in this paragraph, provided that in giving such opinion such counsel may rely on such certificate of such Responsible Officer as to compliance with the foregoing clauses (ii) and (iii) of this subsection 8.3(a) and as to any matters of fact; and
(vii) in the case of the Canadian Borrower, the Successor Company is organized under the laws of Canada or any province or territory thereof.
 
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(b) The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Parent Borrower or the applicable Borrower, respectively, under the Loan Documents, and thereafter the predecessor Parent Borrower or the applicable predecessor Borrower, respectively, shall be relieved of all obligations and covenants under this Agreement, except that the predecessor Parent Borrower or the applicable predecessor Borrower, respectively, in the case of a lease of all or substantially all its assets will not be released from the obligation to pay the principal of and interest on the Loans and Reimbursement Obligations owing in connection with Letters of Credit.
(c) Clauses (ii) and (iii) of subsection 8.3(a) will not apply to any transaction in which the Parent Borrower or any other Borrower consolidates, amalgamates or merges with or into or transfers all or substantially all its properties and assets to ( x ) an Affiliate incorporated or organized for the purpose of reincorporating or reorganizing the Parent Borrower or such other Borrower in another jurisdiction or changing its legal structure to a corporation or other entity or ( y ) a Subsidiary Guarantor so long as all assets of the Parent Borrower or such other Borrower, respectively, and the Restricted Subsidiaries immediately prior to such transaction (other than Capital Stock of such Subsidiary Guarantor) are owned by such Subsidiary Guarantor and its Restricted Subsidiaries that are Subsidiary Guarantors immediately after the consummation thereof. Subsection 8.3(a) will not apply to ( 1 ) any transaction in which any Restricted Subsidiary consolidates or amalgamates with, merges into or transfers all or part of its assets to the Parent Borrower or any other Borrower or ( 2 ) the Transactions.
8.4 [ Reserved .]
8.5 Limitation on Dividends, Acquisitions and Other Restricted Payments .
(a) The Parent Borrower shall not, and shall not permit any Material Restricted Subsidiary to, directly or indirectly, ( i ) declare or pay any dividend or make any distribution on or in respect of its Capital Stock (including any such payment in connection with any merger, amalgamation or consolidation to which the Parent Borrower is a party) except ( x ) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock) and ( y ) dividends or distributions payable to the Parent Borrower or any Restricted Subsidiary (and, in the case of any such Restricted Subsidiary making such dividend or distribution, to other holders of its Capital Stock on no more than a pro rata basis, measured by value), ( ii ) purchase, redeem, retire or otherwise acquire for value any Capital Stock of the Parent Borrower held by Persons other than the Parent Borrower or a Restricted Subsidiary (other than any acquisition of Capital Stock deemed to occur upon the exercise of options if such Capital Stock represents a portion of the exercise price thereof), ( iii ) voluntarily purchase, repurchase, redeem, defease or otherwise voluntarily acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations (other than Subordinated Obligations owed to a Restricted Subsidiary and other than a purchase, repurchase, redemption, defeasance or other acquisition or
 
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retirement for value in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such acquisition or retirement), or ( iv ) acquire by purchase or otherwise all the business or assets of, or stock or other evidences of beneficial ownership of, any Person or make any other Investment in any other Person (in each case, that is not a Permitted Investment) (any such dividend, distribution, purchase, repurchase, redemption, defeasance, other acquisition or retirement, acquisition or Investment being herein referred to as a “ Restricted Payment ”), if at the time the Parent Borrower or such Restricted Subsidiary makes such Restricted Payment and after giving effect thereto:
(1) a Default shall have occurred and be continuing (or would result therefrom);
(2) the Consolidated Coverage Ratio would be less than 2.00 to 1.00; or
(3) the aggregate amount of such Restricted Payment and all other Restricted Payments (the amount so expended, if other than in cash, to be as determined in good faith by the Parent Borrower, whose determination shall be conclusive) declared or made subsequent to the Closing Date and then outstanding would exceed, without duplication, the sum of:
(A) 50.0% of the Consolidated Net Income accrued during the period (treated as one accounting period) beginning on [ — ], 2014 to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which consolidated financial statements of the Parent Borrower are available (or, in case such Consolidated Net Income shall be a negative number, 100.0% of such negative number);
(B) the aggregate net cash proceeds and Cash Equivalents (such aggregate amount, the “ Available Equity Amount ”) received ( x ) by the Parent Borrower as capital contributions to the Parent Borrower after the Closing Date or from the issuance or sale (other than to a Restricted Subsidiary) of its Capital Stock (other than Disqualified Stock or Designated Preferred Stock) after the Closing Date (other than any Specified Equity Contribution) or ( y ) by the Parent Borrower or any Restricted Subsidiary from the Incurrence by the Parent Borrower or any Restricted Subsidiary after the Closing Date of Indebtedness that shall have been converted into or exchanged for Capital Stock of the Parent Borrower (other than Disqualified Stock or Designated Preferred Stock) or Capital Stock of any Parent, plus the amount of any cash received by the Parent Borrower or any Restricted Subsidiary upon such conversion or exchange; and
(C) ( i ) the aggregate amount of cash and the Fair Market Value of any property or assets received from dividends, distributions, interest payments, return of capital, repayments of Investments or other transfers of assets to the Parent Borrower or any Restricted Subsidiary from any Unrestricted Subsidiary, including dividends or other distributions related to dividends or other distributions made pursuant to subsection 8.5(b)(x) below, plus ( ii ) the Fair Market Value of the Investment in an Unrestricted Subsidiary redesignated as a Restricted Subsidiary as determined in good faith by the Parent Borrower.
 
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(b) The provisions of subsection 8.5(a) above do not prohibit any of the following (each, a “ Permitted Payment ”):
(i) ( x ) any purchase, redemption, repurchase, defeasance or other acquisition or retirement of Capital Stock of the Parent Borrower (“ Treasury Capital Stock ”) or Subordinated Obligations made by exchange (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares) for, or out of the proceeds of the issuance or sale of, Capital Stock of the Parent Borrower (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary) (“ Refunding Capital Stock ”) or a capital contribution to the Parent Borrower, in each case other than Specified Equity Contributions; provided that the net cash proceeds from such issuance, sale or capital contribution shall be excluded in subsequent calculations under subsection 8.5(a)(3)(B) above and ( y ) if immediately prior to such acquisition or retirement of such Treasury Capital Stock, dividends thereon were permitted pursuant to subsection 8.5(b)(xv) , dividends on such Refunding Capital Stock in an aggregate amount per annum not exceeding the aggregate amount per annum of dividends so permitted on such Treasury Capital Stock;
(ii) any purchase, redemption, repurchase, defeasance or other acquisition or retirement of any Subordinated Obligations ( x ) made by exchange for, or out of the proceeds of the Incurrence of Indebtedness of the Parent Borrower or Refinancing Indebtedness, Incurred in compliance with subsection 8.1 , ( y ) following the occurrence of a Change of Control (or other similar event described therein as a “change of control”) required pursuant to the terms of such Subordinated Obligations or pursuant to requirements to purchase, redeem, repurchase or defease or otherwise acquire or retire such Indebtedness with the net proceeds of an asset disposition, or ( z ) constituting Acquired Indebtedness;
(iii) any dividend paid or redemption made within 60 days after the date of declaration thereof or of the giving of notice thereof, as applicable, if at such date of declaration or notice such dividend or redemption would have complied with subsection 8.5(a) ;
 
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(iv) other Restricted Payments in an aggregate amount outstanding at any time not to exceed the Available Equity Amount Not Otherwise Applied; provided that at the time such Restricted Payment is made and after giving pro forma effect thereto no Event of Default shall have occurred and be continuing;
(v) loans, advances, dividends or distributions by the Parent Borrower to any Parent to permit any Parent to repurchase or otherwise acquire its Capital Stock or to service Repurchase Debt incurred in connection therewith (including any options, warrants or other rights in respect thereof), or payments by the Parent Borrower to repurchase or otherwise acquire Capital Stock of any Parent or the Parent Borrower (including any options, warrants or other rights in respect thereof), in each case from Management Investors (including any repurchase or acquisition by reason of the Parent Borrower or any Parent retaining any Capital Stock, option, warrant or other right in respect of tax withholding obligations, and any related payment in respect of any such obligation), such payments, loans, advances, dividends or distributions not to exceed an amount (net of repayments of any such loans or advances) equal to ( x )( 1 ) $10,000,000, plus ( 2 ) $2,000,000 multiplied by the number of calendar years that have commenced since the Closing Date, plus ( y ) the Net Cash Proceeds received by the Parent Borrower since the Closing Date from, or as a capital contribution from, the issuance or sale to Management Investors of Capital Stock (including any options, warrants or other rights in respect thereof), to the extent such Net Cash Proceeds are not included in any calculation under subsection 8.5(a)(3)(B)(x) above, plus ( z ) the cash proceeds of key man life insurance policies received by the Parent Borrower or any Restricted Subsidiary (or by any Parent and contributed to the Parent Borrower) since the Closing Date to the extent such cash proceeds are not included in any calculation under subsection 8.5(a)(3)(A) above; provided that any cancellation of Indebtedness owing to the Parent Borrower or any Restricted Subsidiary by any Management Investor in connection with any repurchase or other acquisition of Capital Stock (including any options, warrants or other rights in respect thereof) from any Management Investor shall not constitute a Restricted Payment for purposes of this subsection 8.5 or any other provision of this Agreement;
(vi) [Reserved]
(vii) any Restricted Payment; provided that at the time such Restricted Payment is ( A ) made, the Payment Condition shall be satisfied or ( B ) in the case of Restricted Payments the proceeds of which shall be applied by Holding to pay dividends (so long as Holding is at such time a public company), declared, the Payment Condition shall be satisfied, so long as, in the case of this clause (vii)(B), such Restricted Payment is made within 60 days of declaration;
(viii) loans, advances, dividends or distributions to any Parent or other payments by the Parent Borrower or any Restricted Subsidiary ( A ) to satisfy or permit Holding or any Parent to satisfy obligations under the Management Agreements, the Tax Matters Agreement and the Tax Receivable Agreement,
 
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( B ) to pay or permit any Parent to pay any Parent Expenses or any Related Taxes or ( C ) payments to the Investors or any of their respective Affiliates for any management, consulting, financial or advisory services, or in respect of financing, underwriting or placement services, or in respect of other investment banking activities (if any), pursuant to consulting or other agreements of up to $5,000,000 in any fiscal year;
(ix) payments by the Parent Borrower, or loans, advances, dividends or distributions by the Parent Borrower to any Parent to make payments, to holders of Capital Stock of the Parent Borrower or any Parent in lieu of issuance of fractional shares of such Capital Stock not to exceed $5,000,000 in the aggregate outstanding at any time;
(x) dividends or other distributions of Capital Stock, Indebtedness or other securities of Unrestricted Subsidiaries;
(xi) ( 1 ) any Restricted Payment pursuant to or in connection with the Transactions and ( 2 ) without limiting clause (1) hereof, any Restricted Payment in an amount sufficient to allow Holding and any Parent to perform their obligations under the Contribution Agreement, including to make the Special Payment (as defined in the Contribution Agreement) and other payments due and owing to International Paper thereunder;
(xii) dividends to holders of any class or series of Disqualified Stock, or of any Preferred Stock of a Restricted Subsidiary, Incurred in accordance with subsection 8.1 ;
(xiii) distributions or payments of Special Purpose Financing Fees;
(xiv) quarterly cash dividends not exceeding in any given fiscal year 6% per annum of the Market Capitalization of Holding or any Parent for the previous fiscal year payable every fiscal quarter; provided that on the date of declaration of such dividend, and after giving pro forma effect thereto, no Specified Default shall have occurred and be continuing; and
(xv) ( A ) dividends on any Designated Preferred Stock of the Parent Borrower issued after the Closing Date, provided that at the time of such issuance and after giving effect thereto on a pro forma basis, the Consolidated Coverage Ratio would be at least 2.00 to 1.00, and, in the case of cash dividends on Designated Preferred Stock, such dividend shall for purposes of the determination of such Consolidated Coverage Ratio be deemed to constitute Consolidated Interest Expense, or ( B ) any dividend on Refunding Capital Stock that is Preferred Stock in excess of the amount of dividends thereon permitted by subsection 8.5(b)(i) , provided that at the time of the declaration of such dividend and after giving effect thereto on a pro forma basis, the Consolidated Coverage Ratio would be at least 2.00 to 1.00, and, in the case of cash dividends on Refunding Capital Stock, such dividends shall for purposes of the determination
 
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of such Consolidated Coverage Ratio be deemed to constitute Consolidated Interest Expense, or ( C ) loans, advances, dividends or distributions to any Parent to permit dividends on any Designated Preferred Stock of any Parent issued after the Closing Date, in an amount (net of repayments of any such loans or advances) not exceeding the aggregate cash proceeds received by the Parent Borrower from the issuance or sale of such Designated Preferred Stock of such Parent.
provided that ( A ) in the case of subsections 8.5(b)(i)(y) , 8.5(b)(iii) , 8.5(b)(ix) and 8.5(b)(xv)(B) , the net amount of any such Permitted Payment shall be included in subsequent calculations of the amount of Restricted Payments and ( B ) in all cases other than pursuant to clause (A) immediately above the net amount of any such Permitted Payment shall be excluded in subsequent calculations of the amount of Restricted Payments. The Borrower, in its sole discretion, may classify any Restricted Payment as being made in part under one of the provisions of this covenant and in part under one or more other such provisions (or, as applicable, clauses).
(c) To the extent any Extension of Credit is used to effect in whole or in part the acquisition of an acquired company, such acquisition shall not be permitted if the board of directors or other governing body of such acquired company or the Person selling such acquired company shall have indicated its opposition to such acquisition.
8.6 Limitation on Transactions with Affiliates . Except as otherwise expressly permitted in this Agreement, the Parent Borrower will not, and will not permit any Material Restricted Subsidiary to, enter into any transaction, including any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate other than a portfolio company of any of the Investors or their respective Affiliates (in the ordinary course of business and consistent with past practice) involving consideration in excess of $2,500,000 unless such transaction is ( A ) not otherwise prohibited under this Agreement, and ( B ) upon terms not materially less favorable to the Parent Borrower or such Restricted Subsidiary, as the case may be, than those that could be obtained at the time in a transaction with a Person which is not an Affiliate; provided that nothing contained in this subsection 8.6 shall be deemed to prohibit:
(a) ( 1 ) the Parent Borrower or any Restricted Subsidiary from entering into, modifying, maintaining or performing any consulting, management, compensation, collective bargaining, benefits or employment agreements, related trust agreement or other compensation arrangements with a current or former management member, director, officer, employee or consultant of or to the Parent Borrower or such Restricted Subsidiary or any Parent in the ordinary course of business, including vacation, health, insurance, deferred compensation, severance, retirement, savings, or other similar plans, programs or arrangements, ( 2 ) payments, compensation, performance of indemnification or contribution obligations, the making or cancellation of loans in the ordinary course of business to any such management members, employees, officers, directors or consultants, ( 3 ) any issuance, grant or award of stock, options, other equity related interests or other equity securities, to any such management members, employees, officers, directors or consultants, ( 4 ) the payment of reasonable fees to directors of the Parent Borrower or any of its Subsidiaries or any Parent (as ( i ) approved by the Board of Directors of the Parent Borrower or any Parent (including the compensation committee thereof), ( ii ) in an
 
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amount not in excess of $1,000,000 in the aggregate for all such directors in any fiscal year, or ( iii ) in the ordinary course of business), or ( 5 ) Management Advances and payments in respect thereof (or in reimbursement of any expenses referred to in the definition of such term);
(b) the payment of all amounts in connection with this Agreement or any of the Transactions;
(c) the Parent Borrower or any of its Restricted Subsidiaries from entering into, making payments pursuant to and otherwise performing ( i ) the obligations under the Contribution Agreement and ( ii ) an indemnification and contribution agreement in favor of any Permitted Holder and each person who is or becomes a director, officer, agent, consultant or employee of the Parent Borrower or any of its Subsidiaries or any Parent, in respect of liabilities ( A ) arising under the Securities Act, the Exchange Act and any other applicable securities laws or otherwise, in connection with any offering of securities by any Parent (provided that, if such Parent shall own any material assets other than ( x ) the Capital Stock of the Parent Borrower or another Parent, or ( y ) other assets relating to the ownership interest by such Parent in the Parent Borrower or another Parent, such liabilities shall be limited to the reasonable and proportional share, as determined by the Parent Borrower in its reasonable discretion based on the benefit therefrom to the Parent Borrower and its Subsidiaries, of such liabilities relating or allocable to the ownership interest of such Parent in the Parent Borrower or another Parent and such other related assets) or the Parent Borrower or any of its Subsidiaries, ( B ) incurred to third parties for any action or failure to act of the Parent Borrower or any of its Subsidiaries or any Parent or any of their predecessors or successors, ( C ) arising out of the performance by any Affiliate of the Investors of management, consulting or financial advisory services provided to the Parent Borrower or any of its Subsidiaries or any Parent, ( D ) arising out of the fact that any indemnitee was or is a director, officer, agent, consultant or employee of the Parent Borrower or any of its Subsidiaries or any Parent, or is or was serving at the request of any such Person as a director, officer, agent, consultant or employee of another corporation, partnership, joint venture, trust, enterprise or other Person or ( E ) to the fullest extent permitted by Delaware or other applicable state law, arising out of any breach or alleged breach by such indemnitee of his or her fiduciary duty as a director or officer of the Parent Borrower or any of its Subsidiaries or any Parent;
(d) any issuance or sale of Capital Stock of the Parent Borrower or any Parent or capital contribution to the Parent Borrower or any Restricted Subsidiary;
(e) ( 1 ) the execution, delivery and performance of any Transaction Agreement, and ( 2 ) payments to the Investors or any of their respective Affiliates ( x ) for any management, consulting, financial or advisory services, or in respect of financing, underwriting or placement services, or in respect of other investment banking activities (if any), pursuant to consulting or other agreements of up to $5,000,000 in any fiscal year, ( y ) in connection with any acquisition, disposition, merger, amalgamation, recapitalization or similar transactions, which payments are made pursuant to the Transaction Agreements or are approved by a majority of the Board of Directors in good faith, and ( z ) of all out-of-pocket expenses, indemnifications and contributions incurred in connection with such services or activities;
 
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(f) the execution, delivery and performance of agreements or instruments as set forth on Schedule 8.6 ;
(g) ( i ) any transaction ( x ) among any of the Loan Parties, ( y ) among any of the Non-Loan Parties, or ( z ) among any of the Loan Parties and the Restricted Subsidiaries, in the case of this clause (z) in the ordinary course of business and consistent with past practice, ( ii ) any Restricted Payment Transaction, ( iii ) any transaction permitted by subsection 8.1(c) or 8.1(f) and ( iv ) any transaction permitted by subsection 8.3 ;
(h) the Transactions and all transactions in connection therewith (including but not limited to the financing thereof), and all fees and expenses paid or payable in connection with the Transactions, including the fees and out-of-pocket expenses of International Paper, the Holding Parent, the Investors and their Affiliates; and
(i) any transaction in the ordinary course of business and consistent with past practice between the Parent Borrower or any Restricted Subsidiary and any Affiliate of the Parent Borrower controlled by the Parent Borrower that is a joint venture or similar entity.
For purposes of this subsection 8.6 , ( i ) any transaction with any Affiliate shall be deemed to have satisfied the standard set forth in clause ( B ) of the first sentence hereof if ( x ) such transaction is approved by a majority of the Disinterested Directors of the Board of Directors of the Parent Borrower, or ( y ) a fairness opinion is provided by a nationally recognized appraisal or investment banking firm with respect to such transaction and ( ii ) “ Disinterested Director ” shall mean, with respect to any Person and transaction, a member of the Board of Directors of such Person who does not have any material direct or indirect financial interest in or with respect to such transaction; it being understood that a member of any such Board of Directors shall not be deemed to have such a financial interest by reason of such member holding Capital Stock of the Parent Borrower or any Parent or any options, warrants or other rights in respect of such Capital Stock.
8.7 Limitations on Changes in Nature of Business . The Parent Borrower will not, and will not permit any Material Restricted Subsidiary to, enter into any business, either directly or through any Restricted Subsidiary, except for those businesses of the same general type as the Business, which are reasonably related thereto or which are acquired in Permitted Acquisitions, and any business reasonably related thereto.
8.8 Limitations on Negative Pledge Clauses . The Parent Borrower will not, and will not permit any Material Restricted Subsidiary to, enter into with any Person any agreement which prohibits or limits the ability of the Parent Borrower or any of its Restricted Subsidiaries that are Loan Parties to create, incur, assume or suffer to exist any Lien in favor of the Lenders in respect of obligations and liabilities under this Agreement or any other Loan Documents upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than:
(a) pursuant to any agreement or instrument in effect at or entered into on the Closing Date, this Agreement, the other Loan Documents and any related documents, and, on and after the execution and delivery thereof, any applicable Intercreditor Agreement;
 
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(b) pursuant to any agreement governing or relating to Indebtedness and/or other obligations and liabilities, in each case secured by a Lien permitted by subsection 8.2 (in which case any restriction shall only be effective against the assets subject to such Lien, except as may otherwise be permitted under this subsection 8.8 );
(c) pursuant to any agreement or instrument of a Person, or relating to Indebtedness (including any Guarantee Obligation in respect thereto) or Capital Stock of a Person, which Person is acquired by or merged or consolidated or amalgamated with or into the Parent Borrower or any Restricted Subsidiary, or which agreement or instrument is assumed by the Parent Borrower, or any Restricted Subsidiary in connection with an acquisition from such Person or any other transaction entered into in connection with any such acquisition, merger, consolidation or amalgamation, as in effect at the time of such acquisition, merger, consolidation, amalgamation or transaction (except to the extent that such Indebtedness was incurred to finance, or otherwise in connection with, such acquisition, merger, consolidation, amalgamation or transaction), provided that for purposes of this subsection 8.8(c) , if a Person other than a Borrower is the Successor Company with respect thereto, any Subsidiary thereof or agreement or instrument of such Person or any such Subsidiary shall be deemed acquired or assumed, as the case may be, by the Parent Borrower or a Restricted Subsidiary, as the case may be, when such Person becomes such Successor Company;
(d) pursuant to any agreement or instrument (a “ Refinancing Agreement ”) effecting a refinancing of Indebtedness incurred or outstanding pursuant or relating to, or that otherwise extends, renews, refunds, refinances or replaces, any agreement or instrument referred to in subsection 8.8(a) or 8.8(c) or this subsection 8.8(d) (an “ Initial Agreement ”) or that is, or is contained in, any amendment, supplement or other modification to an Initial Agreement or Refinancing Agreement (an “ Amendment ”); provided , however , that the encumbrances and restrictions contained in any such Refinancing Agreement or Amendment taken as a whole are not materially less favorable to the Lenders than encumbrances and restrictions contained in the Initial Agreement or Initial Agreements to which such Refinancing Agreement or Amendment relates (as determined in good faith by the Borrower Representative);
(e) ( i ) pursuant to any agreement or instrument that restricts in a customary manner the assignment or transfer thereof, or the subletting, assignment or transfer of any property or asset subject thereto, ( ii ) by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of a Borrower or any Restricted Subsidiary not otherwise prohibited by this Agreement, ( iii ) pursuant to mortgages, pledges or other security agreements securing Indebtedness or other obligations of the Parent Borrower or a Restricted Subsidiary to the extent restricting the transfer of the property or assets subject thereto, ( iv ) pursuant to customary provisions restricting dispositions of real property interests set forth in any reciprocal easement
 
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agreements of the Parent Borrower or any Restricted Subsidiary, ( v ) pursuant to Purchase Money Obligations that impose encumbrances or restrictions on the property or assets so acquired, ( vi ) pursuant to any agreement with customers or suppliers entered into in the ordinary course of business that impose restrictions with respect to cash or other deposits or net worth, ( vii ) pursuant to customary provisions contained in agreements and instruments entered into in the ordinary course of business (including but not limited to leases and licenses) or in joint venture and other similar agreements, or in shareholder, partnership, limited liability company and other similar agreements in respect of non-Wholly Owned Restricted Subsidiaries, ( viii ) restrictions that arise or are agreed to in the ordinary course of business and do not detract from the value of property or assets of the Parent Borrower or any Restricted Subsidiary in any manner material to the Parent Borrower or such Restricted Subsidiary, or ( ix ) pursuant to Interest Rate Agreements, Currency Agreements or Commodities Agreements or under Bank Products Agreements;
(f) pursuant to any agreement or instrument ( i ) relating to any Indebtedness permitted to be incurred subsequent to the Closing Date pursuant to subsection 8.1 , ( x ) if the encumbrances and restrictions contained in any such agreement or instrument taken as a whole are not materially less favorable to the Lenders than the encumbrances and restrictions contained in the Initial Agreements (as determined in good faith by the Borrower Representative), or ( y ) if such encumbrance or restriction is not materially more disadvantageous to the Lenders than is customary in comparable financings (as determined in good faith by the Borrower Representative) and either ( 1 ) the Parent Borrower determines in good faith that such encumbrance or restriction will not materially affect the Parent Borrower’s ability to create and maintain the Liens on the ABL Priority Collateral pursuant to the Security Documents or ( 2 ) such encumbrance or restriction applies only if a default occurs in respect of a payment or financial covenant relating to such Indebtedness, or ( ii ) relating to any sale of receivables by or Indebtedness of a Foreign Subsidiary (other than a Canadian Subsidiary);
(g) pursuant to any agreement relating to intercreditor arrangements and related rights and obligations, to or by which the Lenders and/or the Administrative Agent, the ABL Collateral Agent or any other agent, trustee or representative on their behalf may be party or bound at any time or from time to time, and any agreement providing that in the event that a Lien is granted for the benefit of the Lenders another Person shall also receive a Lien, which Lien is permitted by subsection 8.2 ;
(h) pursuant to any agreement for the direct or indirect disposition of Capital Stock of any Person, property or assets, imposing restrictions with respect to such Person, Capital Stock, property or assets pending the closing of such disposition;
(i) by reason of any applicable law, rule, regulation or order, or required by any regulatory authority having jurisdiction over the Parent Borrower or any Restricted Subsidiary or any of their businesses, including any such law, rule, regulation, order or requirement applicable in connection with such Restricted Subsidiary’s status (or the status of any Subsidiary of such Restricted Subsidiary) as a Captive Insurance Subsidiary; and
(j) any agreement governing or relating to Indebtedness of or a Financing Disposition by or to or in favor of any Special Purpose Entity (in which case, any restriction shall only be effective against property, assets and revenues financed or refinanced thereby, subject or relating thereto, or securing such Indebtedness, and/or any property, assets and revenues not constituting ABL Priority Collateral, except as may be otherwise permitted under this subsection 8.8 ), and including any Guarantee Obligation in respect thereof.
 
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8.9 Minimum Consolidated Fixed Charge Coverage Ratio Covenant . The Parent Borrower will not permit the Consolidated Fixed Charge Coverage Ratio to be less than 1.00 to 1.00; provided that such Fixed Charge Coverage Ratio will only be tested ( a ) on the date on which a Compliance Period begins, as of the last day of the then applicable Test Period and ( b ) as of the last day of each Test Period thereafter that ends while such Compliance Period is continuing. For purposes of determining satisfaction with the foregoing Consolidated Fixed Charge Coverage Ratio under this subsection 8.9 , ( x ) any Specified Equity Contribution made with respect to a given fiscal quarter (whether made during or after the end of such fiscal quarter) will, at the option of the Parent Borrower but in compliance with the definition of the term “Specified Equity Contribution,” be included in the calculation of Consolidated EBITDA for such fiscal quarter and for any subsequent Test Period that includes such fiscal quarter and ( y ) except for purposes of testing pro forma compliance with this subsection 8.9 for purposes of determining whether any Specified Payment, incurrence of Indebtedness, or other action or transaction is permitted hereunder, any Restricted Payments made pursuant to subsection 8.5(b)(vii)(A) shall be disregarded.
8.10 Passive Holding Company Status . Holding shall not conduct, transact or otherwise engage, or commit to conduct, transact or otherwise engage, in any business or operations other than ( i ) transactions contemplated by the Loan Documents or the provision of administrative, legal, accounting and management services to, or on behalf of, any of its Subsidiaries, ( ii ) the acquisition and ownership of the Capital Stock of any of its Subsidiaries and the exercise of rights and performance of obligations in connection therewith, ( iii ) the entry into, and exercise of rights and performance of obligations in respect of ( A ) the Transaction Agreements, this Agreement, any other Loan Documents and any other agreement listed on Schedule 8.10 to which it is a party, as any such agreements may be amended, supplemented, waived or otherwise modified from time to time, or replaced, renewed or extended from time to time in a manner not materially adverse to the Lenders, and any guarantee of Indebtedness or other obligations of any of its Subsidiaries permitted pursuant to the Loan Documents, in each case as amended, supplemented waived or otherwise modified from time to time, and any refinancings, refundings, renewals or extensions thereof, ( B ) contracts and agreements with officers, directors, employees and consultants of it or any Subsidiary thereof relating to their employment or directorships (including providing indemnifications to such Persons), ( C ) insurance policies and related contracts and agreements, ( D ) equity subscription agreements, registration rights agreements, voting and other stockholder agreements, engagement letters, underwriting agreements and other agreements in respect of its equity securities or any offering, issuance or sale thereof, and ( E ) Interest Rate Agreements, Currency Agreements, Commodities Agreements and Bank Products Agreements, ( iv ) the guarantee of, and the grant of Liens to secure, Indebtedness under this Agreement and the other Loan Documents, or other Indebtedness and Liens permitted to be incurred under this Agreement by the Parent Borrower or any
 
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Restricted Subsidiary, and repayment, repurchase, redemption, defeasance, acquisition, retirement or discharge of any such Indebtedness or Liens, ( v ) the offering, issuance, sale and repurchase or redemption of, and dividends or distributions on its equity securities, and the incurrence of Indebtedness in connection therewith, ( vi ) the filing of registration statements, and compliance with applicable reporting and other obligations, under federal, state, provincial or other securities laws, ( vii ) the listing of its equity securities and compliance with applicable reporting and other obligations in connection therewith, and the entry into and performance of agreements relating to obligations and activities as a publicly traded company (including in respect of its board of directors, corporate governance, financial reporting, investor relations and similar functions), ( viii ) the retention of (and the entry into, and exercise of rights and performance of obligations in respect of, contracts and agreements with) transfer agents, private placement agents, underwriters, counsel, accountants and other advisors and consultants, ( ix ) the performance of obligations under and compliance with its certificate of incorporation and by-laws, or any applicable law, ordinance, regulation, rule, order, judgment, decree or permit, including, without limitation, as a result of or in connection with the activities of its Subsidiaries, ( x ) the incurrence and payment of its operating and business expenses, including any expenses incurred in connection with the acquisition, development, maintenance, ownership, prosecution, protection and defense of its intellectual property and associated rights (including but not limited to trademarks, service marks, trade names, trade dress, patents, copyrights and similar rights, including registrations and registration or renewal applications in respect thereof; inventions, processes, designs, formulae, trade secrets, know-how, confidential information, computer software, data and documentation, and any other intellectual property rights; and licenses of any of the foregoing) to the extent such intellectual property and associated rights relate to the business or businesses of Holding or any Subsidiary thereof, and any Taxes for which it may be liable and the completion and filing of required tax returns, ( xi ) the payment of dividends and distributions, ( xii ) making loans to or other Investments in, or incurrence of Indebtedness from, its Subsidiaries as and to the extent not prohibited by this Agreement, ( xiii ) the merger or consolidation into any Parent; provided that if Holding is not the surviving entity, such Parent undertakes the obligations of Holding under the Loan Documents pursuant to documentation (including the provision of officer’s certificates and legal opinions) reasonably satisfactory to the Administrative Agent, ( xiv ) transactions by and among Holding, the Parent Borrower and any of the Restricted Subsidiaries to the extent expressly permitted hereunder, ( xv ) the Merger and ( xvi ) other activities incidental or related to the foregoing.
8.11 Canadian Pension Plans . Without the prior written consent of the Administrative Agent, no Loan Party shall ( i ) establish, or otherwise incur any obligations or liabilities under or in connection with any Canadian Pension Plan that provides benefits on a defined benefit basis, other than those in existence on the Closing Date and as disclosed on Schedule 5.12 or ( ii ) permit the wind-up or termination of any Canadian Pension Plan that provides benefits on a defined benefit basis.
 
SECTION 9.	EVENTS OF DEFAULT .	
If any of the following events shall occur and be continuing:
(a) Any Borrower shall fail to pay any principal of any Loan or any Reimbursement Obligation when due in accordance with the terms hereof (whether at
 
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stated maturity, by mandatory prepayment or otherwise); or any of the Borrowers shall fail to pay any interest on any Loan or any Reimbursement Obligations, or any other amount payable hereunder, within five days after any such interest or other amount becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document (or in any amendment, modification or supplement hereto or thereto) or that is contained in any certificate furnished at any time by or on behalf of any Loan Party pursuant to this Agreement or any such other Loan Document shall prove to have been incorrect in any material respect on or as of the date made or deemed made; provided that if any such representation or warranty is capable of being cured, no Event of Default shall occur hereunder if such misrepresentation or breach of warranty is cured within 30 days after a Responsible Officer of the Parent Borrower shall have discovered or should have discovered such misrepresentation or breach of warranty; or
(c) Any Loan Party shall default in the observance or performance of any agreement contained in subsections 4.16 , 5.16 , 7.2(f) , 7.4 (with respect to maintenance of existence of the Parent Borrower) or 7.7(a) or Section 8 of this Agreement; provided that, in the case of a default in the observance or performance of its obligations under ( i )  subsection 4.16 , such default shall have continued unremedied for a period of 15 days or a Cash Dominion Period is continuing at the time of such default; and ( ii )  subsection 7.2(f) , such default shall have continued unremedied for five Business Days; or
(d) Any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section 9 ), and such default shall continue unremedied for a period of 30 days after the earlier of ( i ) the date a Responsible Officer of the Parent Borrower shall have discovered or should have discovered such default and ( ii ) the date written notice has been given to the Borrower Representative by the Administrative Agent or the Required Lenders; or
(e) ( i ) Any Loan Party or any of its Material Restricted Subsidiaries shall default in any payment of principal of or interest on any Indebtedness for borrowed money or any Loan Party or any of its Material Restricted Subsidiaries shall default in the payment of principal of or interest on any Indebtedness, in each case (excluding the Loans and any Indebtedness owed to any Borrower or any Loan Party) in excess of $50,000,000 beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created, ( ii ) any Loan Party or any of its Material Restricted Subsidiaries shall default in the observance or performance of any other agreement or condition relating to any Indebtedness (excluding Indebtedness hereunder) referred to in clause (i) above or contained in any instrument or agreement evidencing, securing or relating thereto (other than a failure to provide notice of a default or an event of default under such instrument or agreement or default in the observance of or compliance with any financial maintenance covenant), or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such
 
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holder or holders) to cause, with the giving of notice or lapse of time if required, such Indebtedness to become due prior to its stated maturity (an “ Acceleration ”) and such time shall have lapsed and, if any notice (a “ Default Notice ”) shall be required to commence a grace period or declare the occurrence of an event of default before notice of Acceleration may be delivered, such Default Notice shall have been given and (in the case of the preceding clause (i) or clause (ii)) such default, event or condition shall not have been remedied or waived by or on behalf of such holder or holders ( provided that this clause (ii) shall not apply to ( x ) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder, or ( y ) any termination event or similar event pursuant to the terms of any Interest Rate Agreement) or ( iii ) there shall have been an Acceleration of any Indebtedness (excluding Indebtedness hereunder) referred to in clause (i) above and, if the Administrative Agent has not yet commenced the exercise of remedies under the Loan Documents, such Acceleration shall not have been rescinded; or
(f) If ( i ) any Loan Party or any of its Material Restricted Subsidiaries shall commence any case, proceeding or other action ( A ) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, proposal, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or ( B ) seeking appointment of a receiver, interim receiver, receivers, receiver and manager, trustee, monitor, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Loan Party or any of its Material Restricted Subsidiaries shall make a general assignment for the benefit of its creditors; or ( ii ) there shall be commenced against any Loan Party or any of its Material Restricted Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above that ( A ) results in the entry of an order for relief or any such adjudication or appointment or ( B ) remains undismissed, undischarged, unstayed or unbonded for a period of 60 days; or ( iii ) there shall be commenced against any Loan Party or any of its Material Restricted Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or ( iv ) any Loan Party or any of its Material Restricted Subsidiaries shall take any corporate or other similar organizational action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or ( v ) any Loan Party or any of its Material Restricted Subsidiaries shall be generally unable to, or shall admit in writing its general inability to, pay its debts as they become due; or
(g) ( i ) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, or ( ii ) any failure to satisfy minimum funding standards within the meaning of Section 412 or 430 of the Code or Section 302 or 303 of ERISA, whether or not waived, shall exist with respect to any Single Employer Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of either of the Parent Borrower or any Commonly Controlled Entity, or ( iii ) a
 
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Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is in the reasonable opinion of the Administrative Agent likely to result in the termination of such Plan for purposes of Title IV of ERISA, or ( iv ) any Single Employer Plan shall terminate for purposes of Title IV of ERISA other than a standard termination pursuant to Section 4041(b) of ERISA, or ( v ) either of the Parent Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the Administrative Agent is reasonably likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan, or ( vi ) a Pension Event occurs or any Lien arises (save for contribution amounts not yet due) in connection with any Canadian Pension Plan; or ( vii ) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vii) above, such event or condition, together with all other such events or conditions, if any, would be reasonably expected to result in a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against any Loan Party or any of its Material Restricted Subsidiaries involving in the aggregate at any time a liability (net of any insurance or indemnity payments actually received in respect thereof prior to or within 60 days from the entry thereof, or to be received in respect thereof in the event any appeal thereof shall be unsuccessful) of $50,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or
(i) ( i ) Any of the Security Documents shall cease for any reason to be in full force and effect (other than pursuant to the terms hereof or thereof), or the Parent Borrower or any Loan Party, in each case that is a party to any of the Security Documents shall so assert in writing, or ( ii ) the Lien created by any of the Security Documents shall cease to be perfected and enforceable in accordance with its terms or of the same effect as to perfection and priority purported to be created thereby with respect to any significant portion of the Collateral (other than in connection with any termination of such Lien in respect of any Collateral as permitted hereby or by any Security Document), and, in the case of the failure of a Lien solely on non-ABL Priority Collateral, such failure to be perfected and enforceable with such priority shall have continued unremedied for a period of 20 days; or
(j) A Change of Control shall have occurred;
then , and in any such event, ( A ) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to any Borrower, the Commitments and any obligation of an Issuing Lender to issue, amend or renew Letters of Credit, if any, shall automatically immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including all L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall immediately become due and payable and the outstanding Letters of Credit shall be cash collateralized in accordance with the following paragraph, and ( B ) if such event is any other Event of Default either or both of the following actions may be taken: ( i ) with
 
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the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower Representative, ( x ) declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate and/or ( y ) declare any obligation of any Issuing Lender to issue, amend or renew Letters of Credit to be terminated; and ( ii ) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower Representative, ( x ) declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement (including, without limitation, all L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable and/or ( y ) require the Borrowers to cash collateralize all outstanding Letters of Credit in accordance with the following paragraph.
In the case of all U.S. Facility Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the applicable U.S. Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount in immediately available funds equal to the aggregate then undrawn and unexpired amount of such U.S. Facility Letters of Credit (and each U.S. Borrower hereby grants to the ABL Collateral Agent, for the ratable benefit of the applicable Secured Parties, a continuing security interest in all amounts at any time on deposit in such collateral account to secure the undrawn and unexpired amount of such U.S. Facility Letters of Credit and all other obligations under the Loan Documents of the U.S. Borrowers). In the case of all Canadian Facility Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Canadian Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount in immediately available funds equal to the aggregate then undrawn and unexpired amount of such Canadian Facility Letters of Credit (and the Canadian Borrower hereby grants to the ABL Collateral Agent, for the ratable benefit of the applicable Secured Parties, a continuing security interest in all amounts at any time on deposit in such cash collateral account to secure the undrawn and unexpired amount of such Canadian Facility Letters of Credit and all other obligations of the Canadian Borrower under the Loan Documents). Each Borrower shall execute and deliver to the Administrative Agent, for the account of the Issuing Lender and the L/C Participants, such further documents and instruments as such Agent may request to evidence the creation and perfection of such security interest in such cash collateral accounts. If at any time the Administrative Agent determines that any funds held in such cash collateral account are subject to any right or claim of any Person other than the ABL Collateral Agent and the applicable Secured Parties, or that the total amount of such funds is less than the aggregate undrawn and unexpired amount of outstanding U.S. Facility Letters of Credit or Canadian Facility Letters of Credit, as applicable, the applicable Borrowers, shall, forthwith, upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in such cash collateral account, an amount equal to the excess of ( a ) such aggregate undrawn and unexpired amount over ( b ) the total amount of funds, if any, then held in such cash collateral account that the Administrative Agent determines to be free and clear of any such right and claim. Amounts held in such cash collateral account with respect to U.S. Facility Letters of Credit shall be applied by the Administrative Agent to the payment of drafts drawn under such U.S. Facility Letters of Credit, and the unused portion thereof after all such U.S. Facility Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to
 
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repay other obligations of the U.S. Borrowers hereunder and under the other Loan Documents. Amounts held in any such cash collateral account with respect to Canadian Facility Letters of Credit shall be applied by the Administrative Agent to the payment of drafts drawn under such Canadian Facility Letters of Credit, and the unused portion thereof after all such Canadian Facility Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Canadian Borrower hereunder and under the other Loan Documents. After all Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrowers hereunder and under the other Loan Documents shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the applicable Borrower. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, no Lender in its capacity as a Secured Party or as beneficiary of any security granted pursuant to the Security Documents shall have any right to exercise remedies in respect of such security without the prior written consent of the Required Lenders.
Except as expressly provided above in this Section 9 , presentment, demand, protest and all other notices of any kind are hereby expressly waived.
Notwithstanding anything to the contrary otherwise contained in this Section 9 , in the event of any Event of Default under the covenant set forth in subsection 8.9 and upon the receipt of a Specified Equity Contribution within the time period specified, and subject to the satisfaction of the other conditions with respect to Specified Equity Contribution set forth in the definition thereof, EBITDA shall be increased with respect to such applicable fiscal quarter and any Test Period that contains such fiscal quarter by the amount of such Specified Equity Contribution (the “ Cure Amount ”), solely for the purpose of measuring compliance with subsection 8.9 . If, after giving effect to the foregoing pro forma adjustment (without giving effect to any repayment of any Indebtedness with any portion of the Cure Amount or any portion of the Cure Amount on the balance sheet of the Parent Borrower and its Restricted Subsidiaries), the Parent Borrower and its Restricted Subsidiaries shall then be in compliance with the requirements of subsection 8.9 , they shall be deemed to have been in compliance therewith as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default hereunder that had occurred shall be deemed cured for the purposes of this Agreement.
The parties hereby acknowledge that notwithstanding any other provision in this Agreement to the contrary, the Cure Amount received pursuant to the occurrence of any Specified Equity Contribution shall be disregarded for purposes of determining any financial ratio-based conditions (other than as applicable to subsection 8.9 ), pricing or any available basket under Section 8 .
 
SECTION 10.	THE AGENTS AND THE OTHER REPRESENTATIVES .	
10.1 Appointment .
(a) Each Lender hereby irrevocably designates and appoints the Agents as the agents of such Lender under this Agreement and the other Loan Documents, and each such Lender irrevocably authorizes each Agent, in such capacity, to take such action on
 
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its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to or required of such Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Agents and the Other Representatives shall not have any duties or responsibilities, except, in the case of the Administrative Agent, the ABL Collateral Agent and the Issuing Lender, those expressly set forth herein and in the other Loan Documents, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against any Agent or the Other Representatives. Each of the Agents may perform any of their respective duties under this Agreement, the other Loan Documents and any other instruments and agreements referred to herein or therein by or through its respective officers, directors, agents, employees or affiliates (it being understood and agreed, for avoidance of doubt and without limiting the generality of the foregoing, that the Administrative Agent and the ABL Collateral Agent may perform any of their respective duties under the Security Documents by or through one or more of their respective affiliates or branches).
(b) Without limiting the generality of paragraph (a) above, for the purposes of creating a solidarité active in accordance with Article 1541 of the Civil Code of Québec , between each Secured Party, taken individually, on the one hand, and the ABL Collateral Agent, on the other hand, each Loan Party and each such Secured Party acknowledge and agree with the ABL Collateral Agent that such Secured Party is hereby conferred the legal status of solidary creditor of each Loan Party in respect of all Obligations, present and future, owed by each Loan Party to each such Secured Party and the ABL Collateral Agent (collectively, the “ Solidary Claim ”). Each Loan Party which is not a signatory of this Agreement but is or may become a signatory to any other Loan Documents shall be deemed to have accepted the provisions contained in this paragraph by its execution of such other Loan Documents. Accordingly, but subject (for the avoidance of doubt) to Article 1542 of the Civil Code of Québec , the Loan Parties are irrevocably bound towards the ABL Collateral Agent and each Secured Party in respect of the entire Solidary Claim of the ABL Collateral Agent and such Secured Party. As a result of the foregoing, the parties hereto acknowledge that the ABL Collateral Agent and each Secured Party shall at all times have a valid and effective right of action for the entire Solidary Claim of the ABL Collateral Agent and such Secured Party and the right to give full acquittance for it. Accordingly, without limiting the generality of the foregoing, the ABL Collateral Agent, as solidary creditor with each Secured Party, shall at all times have a valid and effective right of action in respect of all Obligations, present and future, owed by each Loan Party to the ABL Collateral Agent and each of the applicable Secured Parties or any of them and the right to give a full acquittance for same. The parties further agree and acknowledge that the ABL Collateral Agent’s Liens on the Collateral shall be granted to the ABL Collateral Agent, for its own benefit and for the benefit of the other applicable Secured Parties.
(c) The execution by Bank of America, N.A. as ABL Collateral Agent, prior to this Agreement of any deeds of hypothec, Quebec Security Documents or other Security Documents is hereby ratified and confirmed.
 
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10.2 Delegation of Duties . In performing its functions and duties under this Agreement, each Agent shall act solely as an agent for the Lenders and, as applicable, the other Secured Parties, and, except as provided under subsection 11.6(b)(v) , no Agent assumes any (and shall not be deemed to have assumed any) obligation or relationship of agency or trust with or for the Parent Borrower or any of its Subsidiaries. Each Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact (including the ABL Collateral Agent in the case of the Administrative Agent and the Administrative Agent in the case of the ABL Collateral Agent), and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Agent shall be responsible for the negligence or misconduct of any agents or attorneys-in-fact or counsel selected by it with reasonable care.
10.3 Exculpatory Provisions . No Agent or Other Representative, or any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be ( a ) liable for any action taken or omitted to be taken by such Person under or in connection with this Agreement or any other Loan Document (except for the gross negligence or willful misconduct of such Person or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates) or ( b ) responsible in any manner to any of the Lenders for ( i ) any recitals, statements, representations or warranties made by any Borrower or any other Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent or any Other Representative under or in connection with, this Agreement or any other Loan Document, ( ii ) the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any Notes or any other Loan Document, ( iii ) any failure of the Borrower or any other Loan Party to perform its obligations hereunder or under any other Loan Document, ( iv ) the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Loan Document, ( v ) the satisfaction of any of the conditions precedent set forth in Section 6 , or ( vi ) the existence or possible existence of any Default or Event of Default. No Agent or Other Representative shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Borrower or any other Loan Party. Each Lender agrees that, except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder or given to the Administrative Agent for the account of or with copies for the Lenders, the Agents and the Other Representatives shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Borrower or any other Loan Party which may come into the possession of the Agents and the Other Representatives or any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates.
10.4 Reliance by the Administrative Agent . Each Agent shall be entitled to rely, and shall be fully protected (and shall have no liability to any Person) in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including counsel to the Borrowers), independent accountants and other experts selected by such Agent. The Administrative Agent may deem and treat the payee
 
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of any Note as the owner thereof for all purposes unless such Note shall have been transferred in accordance with subsection 11.6 and all actions required by such subsection in connection with such transfer shall have been taken. Any request, authority or consent of any Person or entity who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor. Each Agent shall be fully justified as between itself and the Lenders in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders and/or such other requisite percentage of the Lenders as is required pursuant to subsection 11.1(a) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and any Notes and the other Loan Documents in accordance with a request of the Required Lenders and/or such other requisite percentage of the Lenders as is required pursuant to subsection 11.1(a) , and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.
10.5 Notice of Default . The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or a Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default.” In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action reasonably promptly with respect to such Default or Event of Default as shall be directed by the Required Lenders and/or such other requisite percentage of the Lenders as is required pursuant to subsection 11.1(a) ; provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.
10.6 Acknowledgement and Representations by Lenders . Each Lender expressly acknowledges that none of the Agents, the Other Representatives or their officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by any Agent or any Other Representative hereafter taken, including any review of the affairs of any Borrowers or any other Loan Party, shall be deemed to constitute any representation or warranty by such Agent or such Other Representative to any Lender. Each Lender represents to the Agents, the Other Representatives and each of the Loan Parties that, independently and without reliance upon any Agent, the Other Representatives or any other Lender, and based on such documents and information as it has deemed appropriate, it has made and will make, its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Borrowers and the other Loan Parties, it has made its own decision to make its Loans or issue Letters of Credit hereunder and enter into this Agreement and it will make its own decisions in taking or not taking any action under this Agreement and the other Loan Documents and, except as expressly provided in this Agreement, neither the Agents nor any Other Representative shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit
 
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or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. Each Lender and each Issuing Lender represents to each other party hereto that it is a bank, savings and loan association or other similar savings institution, insurance company, investment fund or company or other financial institution which makes or acquires commercial loans in the ordinary course of its business, that it is participating hereunder as a Lender for such commercial purposes, and that it has the knowledge and experience to be and is capable of evaluating the merits and risks of being a Lender hereunder. Each Lender and each Issuing Lender acknowledges and agrees to comply with the provisions of subsection 11.6 applicable to the Lenders and Issuing Lenders hereunder.
10.7 Indemnification .
(a) The Lenders agree to indemnify each Agent (or any Affiliate or branch thereof), each Issuing Lender (or Affiliate or branch thereof) and each Other Representative (or any Affiliate or branch thereof) (to the extent not reimbursed by the Borrowers or any other Loan Party and without limiting the obligation of the Borrowers to do so), ratably according to their respective Total Credit Percentages in effect on the date on which indemnification is sought under this subsection 10.7 (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with their Total Credit Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including at any time following the payment of the Loans) be imposed on, incurred by or asserted against any Agent (or any Affiliate or branch thereof) in any way relating to or arising out of this Agreement, any of the other Loan Documents or the transactions contemplated hereby or thereby or any action taken or omitted by any Agent (or any Affiliate or branch thereof) under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent arising from ( a ) such Agent’s gross negligence or willful misconduct or ( b ) claims made or legal proceedings commenced against such Agent by any security holder or creditor thereof arising out of and based upon rights afforded any such security holder or creditor solely in its capacity as such. The obligations to indemnify the Issuing Lender and Swing Line Lender shall be ratable among the Revolving Lenders in accordance with their respective Commitments (or, if the Commitments have been terminated, the outstanding principal amount of their respective Revolving Credit Loans and L/C Obligations and their respective participating interests in the outstanding Letters of Credit) and shall be payable only by the Revolving Lenders. The agreements in this subsection 10.7 shall survive the payment of the Loans and all other amounts payable hereunder.
(b) Any Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document (except actions expressly required to be taken by it hereunder or under the Loan Documents) unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.
 
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(c) The provisions of this subsection 10.7 shall apply to the Issuing Lender in its capacity as such to the same extent that such provisions apply to the Administrative Agent.
(d) The provisions of this subsection 10.7 shall survive the payment of all Borrower Obligations and Guarantor Obligations (each as defined in the U.S. Guarantee and Collateral Agreement and the Canadian Guarantee and Collateral Agreement).
10.8 The Agents and Other Representatives in Their Individual Capacity . The Agents, the Other Representatives and their Affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Borrower or any other Loan Party as though the Agents and the Other Representatives were not the Administrative Agent or the Other Representatives hereunder and under the other Loan Documents. With respect to Loans made or renewed by them and any Note issued to them and with respect to any Letter of Credit issued or participated in by them, the Agents and the Other Representatives shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though they were not an Agent or an Other Representative, and the terms “Lender” and “Lenders” shall include the Agents and the Other Representatives in their individual capacities.
10.9 Right to Request and Act on Instructions .
(a) Each Agent may at any time request instructions from the Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the Loan Documents an Agent is permitted or desires to take or to grant, and if such instructions are promptly requested, the requesting Agent shall be absolutely entitled as between itself and the Lenders to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Lender for refraining from any action or withholding any approval under any of the Loan Documents until it shall have received such instructions from the Required Lenders or all or such other portion of the Lenders as shall be prescribed by this Agreement. Without limiting the foregoing, no Lender shall have any right of action whatsoever against any Agent as a result of an Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) and, notwithstanding the instructions of the Required Lenders (or such other applicable portion of the Lenders), an Agent shall have no obligation to any Lender to take any action if it believes, in good faith, that such action would violate applicable law or exposes an Agent to any liability for which it has not received satisfactory indemnification in accordance with the provisions of subsection 10.7 .
(b) Each Lender authorizes and directs the Agents to enter into ( w ) the Security Documents, ( x ) any Intercreditor Agreement for the benefit of the Lenders and the other Secured Parties, ( y ) any amendments, waivers of or supplements to or other modifications of the Security Documents or any Intercreditor Agreement, in each case with respect to the preceding clauses (w), (x) and (y), in connection with the incurrence by any Loan Party or any Subsidiary thereof of Incremental Indebtedness or other Indebtedness secured by a Permitted Lien (each, an “ Intercreditor Agreement
 
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Supplement ”) to permit such Incremental Indebtedness or other Indebtedness to be secured by a valid, perfected lien (with such priority as may be designated by the Parent Borrower or relevant Subsidiary, as and to the extent such priority is permitted by the Loan Documents) and ( z ) any Incremental Commitment Amendment, any Lender Joinder Agreement or Extension Amendment as provided in subsection 2.6 or 2.7 , respectively, and any amendment as provided in subsection 1.3(b) . Each Lender hereby agrees, and each holder of any Note or participant in a Letter of Credit by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Administrative Agent, the ABL Collateral Agent or the Required Lenders in accordance with the provisions of this Agreement, the Security Documents, any applicable intercreditor agreement, including any applicable Intercreditor Agreement, any Intercreditor Agreement Supplement, any Incremental Commitment Amendment, any Lender Joinder Agreement, or any Extension Amendment and the exercise by the Agents or the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. The Administrative Agent and the ABL Collateral Agent are hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time, to take any action with respect to any Collateral or Security Documents which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral granted pursuant to the Security Documents. Each Lender agrees that it will not have any right individually to enforce or seek to enforce any Security Document or to realize upon any Collateral for the Loans unless instructed to do so by the ABL Collateral Agent, it being understood that the ABL Collateral Agent may grant extensions of time for the creation and perfection of security interests in or the obtaining of title insurance, legal opinions or other deliverables with respect to particular assets or the provision of any guarantee by any Subsidiary (including extensions beyond the Closing Date or in connection with assets acquired, or Subsidiaries formed or acquired, after the Closing Date) where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or the Security Documents.
(c) The Lenders hereby authorize the ABL Collateral Agent, in each case at its option and in its discretion, ( A ) to release any Lien granted to or held by such Agent upon any Collateral ( i ) upon termination of the Commitments and payment and satisfaction of all of the obligations under the Loan Documents at any time arising under or in respect of this Agreement or the Loan Documents or the transactions contemplated hereby or thereby and with no Letters of Credit outstanding (unless cash collateralized or otherwise provided for in a manner reasonably satisfactory to the Administrative Agent) and no other amounts owing hereunder, ( ii ) constituting property being sold or otherwise disposed of to Persons other than a Loan Party (or to a U.S. Loan Party from a Canadian Loan Party or to a Canadian Loan Party from a U.S. Loan Party or in connection with a Foreign Subsidiary becoming (or ceasing to be) directly owned by a U.S. Loan Party) upon the sale or other disposition thereof to the extent permitted or not prohibited by any Loan Document, ( iii ) owned by any Restricted Subsidiary of the Parent Borrower that becomes an Excluded Subsidiary or ceases to be a Restricted Subsidiary of the Parent Borrower or constituting Capital Stock of an Excluded Subsidiary, ( iv ) if approved,
 
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authorized or ratified in writing by the Required Lenders (or such greater amount, to the extent required by subsection 11.1 ) or ( v ) constituting Non-ABL Priority Collateral (as defined in the Base Intercreditor Agreement) or ( vi ) as otherwise may be expressly provided in the relevant Security Documents, ( B ) to enter into any intercreditor agreement on behalf of, and binding with respect to, the Lenders and their interest in designated assets, to give effect to any Special Purpose Financing, including to clarify the respective rights of all parties in and to designated assets, ( C ) to subordinate any Lien on any Excluded Assets or any property granted to or held by such Agent, as the case may be under any Loan Document to the holder of any Permitted Lien and ( D ) to release any Subsidiary Guarantor from its Obligations under any Loan Documents to which it is a party if such Person ceases to be a Restricted Subsidiary of the Parent Borrower or becomes an Excluded Subsidiary. Upon request by the ABL Collateral Agent, at any time, the Lenders will confirm in writing the ABL Collateral Agent’s authority to release particular types or items of Collateral pursuant to this subsection 10.9 .
(d) The Lenders hereby authorize the Administrative Agent and the ABL Collateral Agent, as the case may be, in each case at its option and in its discretion, to enter into any amendment, amendment and restatement, restatement, waiver, supplement or modification, and to make or consent to any filings or to take any other actions, in each case as contemplated by subsection 11.17 . Upon request by any Agent, at any time, the Lenders will confirm in writing the Administrative Agent’s and the ABL Collateral Agent’s authority under this subsection 10.9(d) .
(e) No Agent or Issuing Lender shall have any obligation whatsoever to the Lenders to assure that the Collateral exists or is owned by the Parent Borrower or any of its Subsidiaries or is cared for, protected or insured or that the Liens granted to any Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Agents in this subsection 10.9 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, each Agent may act in any manner it may deem appropriate, in its sole discretion, given such Agent’s own interest in the Collateral as a Lender and that no Agent shall have any duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct.
(f) Notwithstanding any provision herein to the contrary, any Security Document may be amended (or amended and restated), restated, waived, supplemented or modified as contemplated by and in accordance with subsection 11.1 or 11.17 with the written consent of the Agent party thereto and the Loan Parties party thereto.
(g) The ABL Collateral Agent may, and hereby does, appoint the Administrative Agent as its agent for the purposes of holding any Collateral and/or perfecting the ABL Collateral Agent’s security interest therein and for the purpose of taking such other action with respect to the Collateral as such Agents may from time to time agree.
 
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(h) In connection with the sale or other disposition of the Capital Stock of any Loan Party other than the Parent Borrower (other than to the Parent Borrower or a Restricted Subsidiary) or any other transaction pursuant to which such Loan Party shall no longer be a Restricted Subsidiary, upon written notice by the Parent Borrower to the Administrative Agent identifying such Loan Party, describing such sale, disposition or other transaction and certifying that such transaction complies with this Agreement, the Administrative Agent shall execute and deliver to such Loan Party (at its expense) all releases or other documents necessary or reasonably desirable for the release of such Loan Party from its obligations as a Loan Party hereunder, and the ABL Collateral Agent shall execute and deliver to such Loan Party (at its expense) all releases or other documents (including without limitation UCC and PPSA termination statements or similar discharges) necessary or reasonably desirable for the release of the Liens created under the Security Documents in any property or assets of such Loan Party, as such Loan Party may reasonably request.
10.10 Successor Agent . Subject to the appointment of a successor as set forth herein, ( i ) each of the Administrative Agent and the ABL Collateral Agent may be removed by the Parent Borrower or the Required Lenders if it is subject to an Agent-Related Distress Event and ( ii ) each of the Administrative Agent and the ABL Collateral Agent may resign as Administrative Agent or ABL Collateral Agent, in each case upon 10 days’ notice to the applicable Lenders and the Parent Borrower. If the Administrative Agent or the ABL Collateral Agent shall be removed by the Parent Borrower or the Required Lenders pursuant to clause (i) above or resign as Administrative Agent, or ABL Collateral Agent pursuant to clause (ii) above, as applicable, under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be subject to approval by the Parent Borrower in its discretion, provided that such approval by the Parent Borrower in connection with the appointment of any such successor agent shall only be required so long as no Event of Default under subsection 9(a) or 9(f) has occurred and is continuing; provided , further , that the Parent Borrower shall not unreasonably withhold its approval of any successor Administrative Agent if such successor is a commercial bank with a combined consolidated capital and surplus of at least $5,000,000,000. Upon the successful appointment of a successor agent, such successor agent shall succeed to the rights, powers and duties of the Administrative Agent or the ABL Collateral Agent, as applicable, and the term “Administrative Agent,” or “ABL Collateral Agent,” as applicable, shall mean such successor agent effective upon such appointment and approval, and the former Agent’s rights, powers and duties as Administrative Agent or ABL Collateral Agent, as applicable, shall be terminated, without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement or any holders of the Loans or issuers of Letters of Credit. After any retiring Agent’s resignation or removal as Agent, the provisions of this Section 10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement and the other Loan Documents. Additionally, after any retiring Agent’s resignation as such Agent, the provisions of this subsection 10.10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was such Agent under this Agreement and the other Loan Documents. After the resignation or removal of the Administrative Agent pursuant to the preceding provisions of this subsection 10.10 , such resigning or removed Administrative Agent ( x ) shall not be required to act as Issuing Lender for any Letters of Credit to be issued after the date of such resignation or removal and ( y ) shall not be required to act as Swing Line Lender
 
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with respect to Swing Line Loans to be made after the date of such resignation or removal (and all outstanding Swing Line Loans of such resigning or removed Administrative Agent shall be required to be repaid in full upon its resignation or removal), although the resigning or removed Administrative Agent shall retain all rights hereunder as Issuing Lender and Swing Line Lender with respect to all Letters of Credit issued by it, and all Swing Line Loans made by it, prior to the effectiveness of its resignation or removal as Administrative Agent hereunder. After the resignation or removal of the Administrative Agent pursuant to the preceding provisions of this subsection 10.10 , the resigning or removed Administrative Agent shall not be required to act as Issuing Lender for any Letters of Credit to be issued after the date of such resignation, although the resigning or removed Administrative Agent shall retain all rights hereunder as Issuing Lender with respect to all Letters of Credit issued by it prior to the effectiveness of its resignation or removal as Administrative Agent hereunder. The fees payable by the Borrowers to any successor agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor.
10.11 Other Representatives . None of the entities identified as joint bookrunners and/or joint lead arrangers pursuant to the definition of Other Representative contained herein shall have any duties or responsibilities hereunder or under any other Loan Document in its capacity as such.
10.12 Swing Line Lender . The provisions of this Section 10 shall apply to the Swing Line Lender in its capacity as such to the same extent that such provisions apply to the Administrative Agent.
10.13 Withholding Tax . To the extent required by any applicable law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding tax. If the Internal Revenue Service, the Canada Revenue Agency or any other authority of the United States, Canada or other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender for any reason (including because the appropriate form was not delivered or not properly executed or because such Lender failed to notify the Administrative Agent of a change in circumstance that rendered an exemption from or reduction of withholding tax ineffective), such Lender shall indemnify and hold harmless the Administrative Agent (to the extent that the Administrative Agent has not already been reimbursed by the Parent Borrower and without limiting the obligation of the Parent Borrower to do so), for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including any interest, additions to tax or penalties thereto, together with all expenses incurred, including legal expenses and any other out-of-pocket expenses.
10.14 Approved Electronic Communications . Each of the Lenders and the Loan Parties agree that the Administrative Agent may, but shall not be obligated to, make the Approved Electronic Communications available to the Lenders and the Issuing Lender by posting such Approved Electronic Communications on IntraLinks™ or a substantially similar electronic platform chosen by the Administrative Agent to be its electronic transmission system (the “ Approved Electronic Platform ”). The Approved Electronic Communications and the Approved Electronic Platform are provided (subject to subsection 11.16 ) “as is” and “as available.”
 
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Each of the Lenders and (subject to subsection 11.16) each of the Loan Parties agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Approved Electronic Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally applicable document retention procedures and policies.
10.15 Appointment of Borrower Representative . Each Borrower hereby designates the Parent Borrower as its borrower representative (in such capacity, the “ Borrower Representative ”). The Borrower Representative will be acting as agent on each of the Borrowers’ behalf for the purposes of issuing notices of Borrowing and notices of conversion/continuation of any Loans pursuant to subsection 4.2 or similar notices, giving instructions with respect to the disbursement of the proceeds of the Loans, selecting interest rate options, requesting Letters of Credit, giving and receiving all other notices and consents hereunder or under any of the other Loan Documents and taking all other actions (including in respect of compliance with covenants) on behalf of any Borrower or the Borrowers under the Loan Documents. The Borrower Representative hereby accepts such appointment. Each Borrower agrees that each notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by the Borrower Representative shall be deemed for all purposes to have been made by such Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if the same had been made directly by such Borrower.
10.16 Reports . By signing this Agreement, each Lender:
(a) is deemed to have requested that the Administrative Agent furnish such Lender, promptly after they become available, copies of all financial statements required to be delivered by the Parent Borrower hereunder and all field examinations, audits and appraisals of the Collateral received by the Agents (collectively, the “ Reports ”);
(b) expressly agrees and acknowledges that the Administrative Agent ( i ) makes no representation or warranty as to the accuracy of the Reports, and ( ii ) shall not be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations and that the Administrative Agent or any other party performing any audit or examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel;
(d) agrees to keep all Reports confidential and strictly for its internal use, and not to distribute, except to its participants (or in connection with periodic regulatory examination and reviews conducted by the National Association of Insurance Commissioners or any Governmental Authority having jurisdiction over such Lender or its affiliates (to the extent applicable)), or use any Report in any other manner; and
(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees ( i ) to hold the Administrative Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any Loans or Letters of Credit that the indemnifying Lender has made or may make to the Parent Borrower, or the indemnifying Lender’s participation in, or the
 
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indemnifying Lender’s purchase of, a Loan or Loans of the Parent Borrower; and ( ii ) to pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses and other amounts (including attorney costs) incurred by the Agents and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.
10.17 Application of Proceeds . The Lenders, the Administrative Agent and the ABL Collateral Agent agree, as among such parties, as follows: subject to the terms of any applicable intercreditor agreement, including the Base Intercreditor Agreement, after the occurrence and during the continuance of an Event of Default,
(a) all amounts collected or received by the Administrative Agent, the ABL Collateral Agent, any Lender or any Issuing Lender under any U.S. Security Documents or otherwise with respect to any U.S. Loan Party under any Loan Document, in each case on account of amounts then due and outstanding under any of the Loan Documents shall be applied as follows: first , to pay interest on and then principal of Agent Advances made as Tranche A U.S. Facility Revolving Credit Loans then outstanding, second , to pay all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees to the extent provided in the Loan Documents) due and owing hereunder of the Administrative Agent and the ABL Collateral Agent in connection with enforcing the rights of the Agents, the Lenders and the Issuing Lenders under the Loan Documents (including all expenses with respect to the sale or other realization of or in respect of the Collateral granted under the U.S. Security Documents and any sums advanced to the ABL Collateral Agent to preserve its security interest in the Collateral granted under the U.S. Security Documents), third , to pay interest on and then principal of Swing Line Loans then outstanding, fourth , to pay all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees to the extent provided herein) due and owing hereunder of each of the Lenders and each of the Issuing Lenders in connection with enforcing such Lender’s or such Issuing Lender’s rights under the Loan Documents, fifth , to pay interest on and then principal of Tranche A U.S. Facility Revolving Credit Loans then outstanding and any Reimbursement Obligations in respect of Letters of Credit issued by a U.S. Facility Issuing Lender then outstanding and to cash collateralize any outstanding U.S. Facility L/C Obligations in respect of Letters of Credit issued by a U.S. Facility Issuing Lender on terms reasonably satisfactory to the Administrative Agent, as applicable, on a pro rata basis, sixth , to pay interest on and then principal of Tranche A Canadian Facility Revolving Credit Loans then outstanding and any Reimbursement Obligations in respect of Letters of Credit issued by a Canadian Facility Issuing Lender then outstanding and to cash collateralize any outstanding L/C Obligations in respect of Letters of Credit issued by a Canadian Facility Issuing Lender on terms reasonably satisfactory to the Administrative Agent, as applicable, on a pro rata basis, seventh , to pay interest on and the principal of Tranche A-1 U.S. Facility Revolving Credit Loans then outstanding and all Qualified Secured Bank Product Obligations of any U.S. Loan Party to the extent a Bank Product Reserve has been established with respect thereto up to and including the amount most recently specified to the Administrative Agent pursuant to the terms hereof, in each case on a pro rata basis, eighth , to pay interest on and the principal
 
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of Tranche A-1 Canadian Facility Revolving Credit Loans then outstanding on a pro rata basis, ninth , to pay all Obligations (as such term is defined in the U.S. Guarantee and Collateral Agreement) and all Obligations (as such term is defined in the Canadian Guarantee and Collateral Agreement) not referenced in clauses first through eighth above pro rata to the Secured Parties (as such term is defined in the U.S. Guarantee and Collateral Agreement) and the Secured Parties (as such term is defined in the Canadian Guarantee and Collateral Agreement) entitled thereto and, tenth , to pay the surplus, if any, to whomever may be lawfully entitled to receive such surplus. To the extent that any amounts available for distribution pursuant to clause fifth or sixth above are attributable to the issued but undrawn amount of outstanding Letters of Credit which are then not yet required to be reimbursed hereunder, such amounts shall be held by the ABL Collateral Agent in a cash collateral account and applied ( x ) first, to reimburse the applicable U.S. Facility Issuing Lender or Canadian Facility Issuing Lender from time to time for any drawings under such Letters of Credit and ( y ) then, following the expiration of all Letters of Credit, to all other obligations of the types described in such clause fifth or sixth . To the extent any amounts available for distribution pursuant to clause ninth are insufficient to pay all obligations described therein in full, such moneys shall be allocated pro rata among the Revolving Lenders and Issuing Lenders based on their respective Commitment Percentages; and
(b) all amounts collected or received by the Administrative Agent, the ABL Collateral Agent, any Issuing Lender or any Canadian Facility Lender under any Canadian Security Document or otherwise with respect to any Canadian Loan Party under any Loan Document, in each case on account of amounts then due and outstanding under any of the Loan Documents shall be applied as follows: first , to pay interest on and then principal of Agent Advances made as Tranche A Canadian Facility Revolving Credit Loans to the Canadian Borrower then outstanding, second , to pay all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees to the extent provided in the Loan Documents) due and owing hereunder of the Administrative Agent and the ABL Collateral Agent in connection with enforcing the rights of the Agents, the Lenders and the Issuing Lenders under the Loan Documents (including all expenses with respect to the sale or other realization of or in respect of the Collateral granted under the Canadian Security Documents and any sums advanced to the ABL Collateral Agent to preserve its security interest in the Collateral granted under the Canadian Security Documents), third , to pay all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees to the extent provided herein) due and owing hereunder of each of the Canadian Facility Lenders and each of the Canadian Facility Issuing Lenders in connection with enforcing such Canadian Facility Lender’s or such Canadian Facility Issuing Lender’s rights under the Loan Documents, fourth , to pay interest on and then principal of Tranche A Canadian Facility Revolving Credit Loans then outstanding and any Reimbursement Obligations in respect of Letters of Credit issued by a Canadian Facility Issuing Lender then outstanding and to cash collateralize any outstanding L/C Obligations in respect of Letters of Credit issued by a Canadian Facility Issuing Lender on terms reasonably satisfactory to the Administrative Agent, as applicable, on a pro rata basis, fifth , to pay interest on and the principal of Tranche A-1 Canadian Facility Revolving Credit Loans then as outstanding and all Qualified Secured Bank Product Obligations of any Canadian Loan Party to the extent a Bank Product Reserve has been established with respect
 
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thereto up to and including the amount most recently specified to the Administrative Agent pursuant to the terms hereof, in each case on a pro rata basis, sixth , to pay any Obligations (as such term is defined in the Canadian Guarantee and Collateral Agreement) owing to Canadian Secured Parties not referenced in clauses first through fifth above and seventh to pay the surplus, if any, to whomever may be lawfully entitled to receive such surplus. To the extent that any amounts available for distribution pursuant to clause fourth above are attributable to the issued but undrawn amount of outstanding Letters of Credit issued by a Canadian Facility Issuing Lender which are then not yet required to be reimbursed hereunder, such amounts shall be held by the ABL Collateral Agent in a cash collateral account and applied ( x ) first, to reimburse the applicable Canadian Facility Issuing Lender from time to time for any drawings under such Letters of Credit and ( y ) then, following the expiration of all Letters of Credit issued by a Canadian Facility Issuing Lender, to all other obligations of the types described in such clause fourth . To the extent any amounts available for distribution pursuant to clause fourth are insufficient to pay all obligations described therein in full, such moneys shall be allocated pro rata among the Canadian Facility Lenders and Canadian Facility Issuing Lenders based on their respective Tranche A Canadian Facility Commitment Percentages or Tranche A-1 Canadian Facility Commitment Percentages, as applicable.
10.18 Bank Product Providers . Each Secured Bank Product Provider that is not a Lender, by delivery of a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and the Borrower Representative, or as otherwise agreed by the Administrative Agent and the Borrower Representative, shall agree to be bound by this Section 10 . Each Secured Bank Product Provider shall indemnify and hold harmless each Agent (or any Affiliate or branch thereof), to the extent not reimbursed by the Loan Parties, against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including at any time following the payment of the Loans) be imposed on, incurred by or asserted against any Agent (or any Affiliate or branch thereof) in connection with such provider’s Secured Bank Product Obligations (except those liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements determined in a final, non-appealable judgment by a court of competent jurisdiction to result from the gross negligence, willful misconduct or bad faith of such Agent).
 
SECTION 11.	MISCELLANEOUS .	
11.1 Amendments and Waivers .
(a) Neither this Agreement nor any other Loan Document, nor any terms hereof or thereof, may be amended, supplemented, modified or waived except in accordance with the provisions of this subsection 11.1 . The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent (and the ABL Collateral Agent, as applicable) may, from time to time, ( x ) enter into with the respective Loan Parties hereto or thereto, as the case may be, written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or to the other Loan Documents or changing, in any manner the rights or obligations of the Lenders or the Loan Parties hereunder or thereunder or ( y )
 
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waive at any Loan Party’s request, on such terms and conditions as the Required Lenders or the Administrative Agent (or the ABL Collateral Agent, as applicable), as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that amendments pursuant to subsections 11.1(e) and 11.1(g) may be effected without the consent of the Required Lenders to the extent provided therein; provided , further , that no such waiver and no such amendment, supplement or modification shall:
(i) ( A ) reduce or forgive the amount or extend the scheduled date of maturity of any Loan or any Reimbursement Obligation hereunder or of any scheduled installment thereof, ( B ) reduce the stated rate of any interest, commission or fee payable hereunder (other than as a result of any waiver of the applicability of any post-default increase in interest rates), ( C ) (except as provided in subsection 11.1(g) ) extend the scheduled date of any payment thereof or increase the amount or extend the expiration date of any Lender’s Commitment, or (D) change the currency in which any Loan or Reimbursement Obligation is payable, in each case without the consent of each Lender directly and adversely affected thereby (it being understood that amendments or supplements to, or waivers or modifications of, conditions precedent, representations, warranties, covenants, Defaults or Events of Default, mandatory prepayments or the making of any Agent Advance or of a mandatory reduction in the aggregate Commitment of all Lenders shall not constitute an increase of the Commitment of any Lender or an extension of the scheduled date of maturity of any Loan or any Reimbursement Obligation hereunder, or a reduction or forgiveness thereof, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase in the Commitment of such Lender);
(ii) amend, modify or waive any provision of this subsection 11.1(a) or reduce the percentage specified in the definition of “Required Lenders” or “Supermajority Lenders,” or consent to the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement and the other Loan Documents (other than pursuant to subsection 8.3 or 11.6(a) ), in each case without the written consent of all the Lenders; provided that, as further provided in subsection 11.1(g) , the definition of “Required Lenders” and “Supermajority Lenders” may be amended in connection with any amendment pursuant to subsection 2.6 or 2.7 to include appropriately the Lenders participating in such incremental facility or extension in any required vote or action of the Required Lenders or the Supermajority Lenders, as applicable;
(iii) release in the aggregate (in a single transaction or a series of related transactions) all or substantially all of the value of the Guarantees of the Guarantors under the Security Documents, or, in the aggregate (in a single transaction or a series of related transactions), all or substantially all of the Collateral without the consent of all of the Lenders, except as expressly permitted hereby or by any Security Document (as such documents are in effect on the date hereof or, if later, the date of execution and delivery thereof in accordance with the terms hereof);
 
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(iv) require any Lender to make Loans having an Interest Period of longer than six months without the consent of such Lender;
(v) amend, modify or waive any provision of Section 10 without the written consent of the then Agents and of any Other Representative directly and adversely affected thereby;
(vi) [reserved];
(vii) amend, modify or waive any provision of subsection 6.2 applicable to the making of a Loan without the written consent of the Supermajority Lenders;
(viii) amend, modify or waive any provision of the Swing Line Note (if any) or subsection 2.4 without the written consent of the Swing Line Lender and each other Lender, if any, which holds, or is required to purchase, a participation in any Swing Line Loan pursuant to subsection 2.4(d) ;
(ix) amend, modify or waive the provisions of any Letter of Credit or any L/C Obligation without the written consent of the Issuing Lender and each directly and adversely affected L/C Participant;
(x) amend, modify or waive the order of application of payments set forth in subsection 4.8(a) or 10.17 hereof, Section 4.1 of the Base Intercreditor Agreement (if applicable) or the relative priority of the ABL Priority Collateral, in each case without the consent of the Supermajority Lenders;
(xi) increase the advance rates set forth in the definition of “Tranche A Canadian Borrowing Base,” “Tranche A-1 Canadian Borrowing Base,” “Tranche A U.S. Borrowing Base” or “Tranche A-1 U.S. Borrowing Base” or make any change to the definition of “Tranche A Canadian Borrowing Base,” “Tranche A-1 Canadian Borrowing Base,” “Tranche A U.S. Borrowing Base” or “Tranche A-1 U.S. Borrowing Base” (by adding additional categories or components thereof), “Eligible Accounts,” “Eligible Credit Card Receivables,” “Eligible In-Transit Inventory,” “Eligible Inventory,” “Eligible Letter of Credit Inventory,” “Net Orderly Liquidation Value” or “Value” that could have the effect of increasing the amount of the Tranche A Canadian Borrowing Base, Tranche A-1 Canadian Borrowing Base, Tranche A U.S. Borrowing Base or Tranche A-1 U.S. Borrowing Base, reduce the Dollar amount set forth in the definition of “Cash Dominion Period,” or increase the maximum amount of permitted Agent Advances under subsection 2.1(d) (which, when aggregated with all other Extensions of Credit made hereunder, shall under no circumstance exceed the Commitments) in each case, without the written consent of the Supermajority Lenders; provided, that if the Tranche A-1 Canadian Facility Lenders or the Tranche A-1 U.S. Facility Lenders are directly adversely affected by any such
 
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change described in this clause (xi), the written consent of the Supermajority Lenders (taking into account only Tranche A-1 Canadian Facility Lenders or Tranche A-1 U.S. Facility Lenders, as the case may be), shall also be required and provided, further that the Administrative Agent may increase or decrease the amount of, or otherwise modify or eliminate, any Availability Reserves that it implements in its Permitted Discretion in accordance with subsection 2.1(c) or otherwise in accordance with the terms of this Agreement, and in any such case, such change will not be deemed to require any Supermajority Lender of other Lender consent; or
(xii) subordinate in right of payment (or subordinate the Liens securing) any Obligations in respect of the Tranche A-1 Canadian Facility Revolving Credit Commitments or the Tranche A-1 U.S. Facility Revolving Credit Commitments, or any Facility that is (or is required to be) pari passu therewith in security or right of payment, to any Indebtedness that is subordinated in right of payment, or secured by Liens subordinate to, the Obligations with respect to the Tranche A Canadian Facility Revolving Credit Commitments, the Tranche A U.S. Facility Revolving Credit Commitments, or any other Facility that is (or is required to be) pari passu therewith in security or right of payment, without the consent of each Tranche A-1 Canadian Facility Lender, each Tranche A-1 U.S. Facility Lender, and each Lender under any other Facility so subordinated;
provided , further , that, as more fully set forth in subsection 11.1(g) , these sections may be amended or modified in connection with any amendment, supplement or joinder pursuant to subsection 2.6 or 2.7 to reflect the priorities as permitted by, and contemplated by, such subsections with the consent of the Administrative Agent and the Lenders participating in such incremental facility or extension, provided, further, that notwithstanding and in addition to the foregoing, the ABL Collateral Agent may, in its discretion, release the Lien on Collateral valued in the aggregate not in excess of $10,000,000 in any fiscal year without the consent of any Lender.
(b) Any waiver and any amendment, supplement or modification pursuant to this subsection 11.1 shall apply to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Agents and all future holders of the Loans and the Commitments. In the case of any waiver, each of the Loan Parties, the Lenders and the Agents shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.
(c) [Reserved].
(d) Notwithstanding any provision herein to the contrary, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower Representative ( x ) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to
 
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share ratably in the benefits of this Agreement and the other Loan Documents with the existing Facilities and the accrued interest and fees in respect thereof (ranking pari passu (or, as permitted hereunder (subject to the class protection set forth in subsection 11.1(a)(xii) ), junior) in right of ( A ) priority with respect to the Collateral and ( B ) payment with respect to the Obligations hereunder), ( y ) to include, as appropriate, the Lenders holding such credit facilities in any required vote or action of the Required Lenders or of the Lenders of each Facility hereunder and ( z ) to provide class protection for any additional credit facilities in a manner consistent with those provided in the original Facilities pursuant to the provisions of subsection 11.1(a) as originally in effect.
(e) Notwithstanding any provision herein to the contrary, any Security Document may be amended (or amended and restated), restated, waived, supplemented or modified as contemplated by subsection 11.17 with the written consent of the Agent party thereto and the Loan Party party thereto.
(f) If, in connection with any proposed change, waiver, discharge or termination of or to any of the provisions of this Agreement and/or any other Loan Document as contemplated by subsection 11.1(a) , the consent of each Lender, the Supermajority Lenders or each directly and adversely affected Lender, as applicable, is required and the consent of the Required Lenders at such time is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained (each such other Lender, a “ Non-Consenting Lender ”), then the Borrower Representative may, on notice to the Administrative Agent and the Non-Consenting Lender, ( A ) replace such Non-Consenting Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to subsection 11.6 (with the assignment fee and any other costs and expenses to be paid by the Parent Borrower in such instance) all of its rights and obligations under this Agreement to one or more assignees; provided that neither the Administrative Agent nor any Lender shall have any obligation to the Parent Borrower to find a replacement Lender; provided, further, that the applicable assignee shall have agreed to the applicable change, waiver, discharge or termination of this Agreement and/or the other Loan Documents; and provided, further, that all obligations of the Borrowers owing to the Non-Consenting Lender relating to the Loans and participations so assigned shall be paid in full by the assignee Lender (or, at the Borrower Representative’s option, by a Borrower) to such Non-Consenting Lender concurrently with such Assignment and Acceptance or ( B ) upon notice to the Administrative Agent, prepay the relevant Loans and, at the Parent Borrower’s option, terminate the Commitments of such Non-Consenting Lender, in whole or in part, subject to subsection 4.12 , without premium or penalty. In connection with any such replacement under this subsection 11.1(f) , if the Non-Consenting Lender does not execute and deliver to the Administrative Agent a duly completed Assignment and Acceptance and/or any other documentation necessary to reflect such replacement within a period of time deemed reasonable by the Administrative Agent after the later of ( a ) the date on which the replacement Lender executes and delivers such Assignment and Acceptance and/or such other documentation and ( b ) the date as of which all obligations of the Parent Borrower owing to the Non-Consenting Lender relating to the Loans so assigned shall be paid in full by the assignee Lender to such Non-Consenting Lender, then such Non-Consenting Lender shall be deemed to have executed and delivered such Assignment and
 
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Acceptance and/or such other documentation as of such date and each Borrower shall be entitled (but not obligated) to execute and deliver such Assignment and Acceptance and/or such other documentation on behalf of such Non-Consenting Lender, and the Administrative Agent shall record such assignment in the Register.
(g) Notwithstanding any provision herein to the contrary, this Agreement and the other Loan Documents may be amended ( i ) to cure any ambiguity, mistake, omission, defect or inconsistency, ( ii ) in accordance with subsection 2.6 to incorporate the terms of any Incremental ABL Term Loans, Incremental Revolving Commitments and New Revolving Commitments, ( iii ) in accordance with subsection 2.7 to effectuate an Extension and to provide for non-pro rata borrowings and payments of any amounts hereunder as between the Loans and any Commitments in connection therewith, and ( iv ) in accordance with subsection 1.3(b ) in connection a change in GAAP or the application thereof, in each case with the consent of the Administrative Agent but without the consent of any Lender (except as expressly provided in subsection 2.6 or 2.7 , as applicable) required, including, without limitation, as provided in subsection 4.4(f) .
(h) Notwithstanding any provision herein to the contrary, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except to the extent the consent of such Lender would be required under clause (i) in the proviso to the first sentence of subsection 11.1(a) .
11.2 Notices .
(a) All notices, requests, and demands to or upon the respective parties hereto to be effective shall be in writing (including telecopy or electronic mail), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or three days after being deposited in the mail, postage prepaid, or, in the case of telecopy or electronic mail notice, when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day), or, in the case of delivery by a nationally recognized overnight courier, when received, addressed as follows in the case of the Borrowers, the Administrative Agent, the ABL Collateral Agent and the Issuing Lender, and as set forth in Schedule A in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the Loans:

The Loan Parties (including the Parent Borrower in its capacity as Borrower Representative):	  		
		
	  	Attention:	
	  	Facsimile:	
	  	Telephone:	
	  	Email:	
 
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With copies (which shall not constitute notice) to:	  	Debevoise & Plimpton LLP	
	  	919 Third Avenue	
	  	New York, NY 10022	
	  	Attention:   Pierre Maugüé, Esq.	
	  	Facsimile:    (212) 909-6836	
	  	Telephone:   (212) 909-6000	
The Administrative Agent:	  		
With copies to:	  		
		
[The ABL Collateral Agent:	  		
		
With copies to:	  		
		
The Swing Line Lender:	  		
		
The Issuing Lender:]	  		
provided that any notice, request or demand to or upon the Administrative Agent or the Lenders pursuant to subsection 2.2 , 2.4 , 4.2 , 4.4 or 4.8 shall not be effective until received.
(b) Without in any way limiting the obligation of any Loan Party and its Subsidiaries to confirm in writing any telephonic notice permitted to be given hereunder, the Administrative Agent, the Swing Line Lender (in the case of a Borrowing of Swing Line Loans) or the Issuing Lender (in the case of the issuance of a Letter of Credit), as the case may be, may prior to receipt of written confirmation act without liability upon the basis of such telephonic notice, believed by the Administrative Agent, the Swing Line Lender or the Issuing Lender, as the case may be, in good faith to be from a Responsible Officer.
11.3 No Waiver; Cumulative Remedies . No failure to exercise and no delay in exercising, on the part of the Administrative Agent, the Issuing Lender, any Lender or any Loan
 
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Party, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties . All representations and warranties made hereunder and in the other Loan Documents (or in any amendment, modification or supplement hereto or thereto) and in any certificate delivered pursuant hereto or such other Loan Documents shall survive the execution and delivery of this Agreement and the making of the Loans hereunder.
11.5 Payment of Expenses and Taxes . The Parent Borrower agrees ( a ) to pay or reimburse the Commitment Parties for ( 1 ) all their reasonable and documented or invoiced out-of-pocket costs and expenses incurred in connection with ( i ) the syndication of the Facility and the development, preparation, execution and delivery of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, ( ii ) the consummation and administration of the transactions (including the syndication of the Commitments) contemplated hereby and thereby and ( iii ) efforts to monitor the Loans and verify, protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of any of the Collateral, and ( 2 ) the reasonable and documented or invoiced fees and disbursements of Skadden, Arps, Slate, Meagher & Flom LLP and Norton Rose Fulbright Canada LLP, a single local counsel in each relevant jurisdiction and such other special or local counsel, consultants, advisors, appraisers and auditors whose retention (other than during the continuance of an Event of Default) is approved by the Parent Borrower (such consent not to be unreasonably withheld, conditioned or delayed), ( b ) to pay or reimburse each Lender, Issuing Lender and Agent for all its reasonable and documented or invoiced costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any other documents prepared in connection herewith or therewith, including the fees and disbursements of counsel to the Agents and the Lenders, ( c ) to pay, indemnify or reimburse each Lender, Issuing Lender and Agent for, and hold each Lender, Issuing Lender and Agent harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, ( d ) to pay, indemnify or reimburse each Lender, Issuing Lender, Syndication Agent, Other Representative and Agent, their respective affiliates, and their respective officers, directors, employees, shareholders, members, attorneys and other advisors, agents and controlling persons (each, an “ Indemnitee ”) for, and hold each Indemnitee harmless from and against, any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including any of the foregoing relating to the use of proceeds of the Loans, Letters of Credit or the violation of, noncompliance with or liability under, any Environmental Law attributable to the operations of the Parent Borrower or any of its
 
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Subsidiaries or any property or facility owned, leased or operated by the Parent Borrower or any of its Subsidiaries or the presence of Materials of Environmental Concern at, on or under, and Release of Materials of Environmental Concern at, on, under or from any such properties or facilities, or any litigation or other proceeding relating to any of the foregoing, regardless of whether any such Indemnitee is a party thereto and whether or not such litigation or other proceeding is brought by any Borrower, any equity holder, Affiliate or creditor of any Borrower or any other Person (all the foregoing in this clause (d), collectively, the “ Indemnified Liabilities ”) and ( e ) to pay reasonable and documented or invoiced fees for appraisals and field examinations required by subsection 7.6(b) and the preparation of Reports related thereto in each calendar year based on the fees charged by third parties retained by the Administrative Agent (notwithstanding any reference to “out-of-pocket” above in this subsection 11.5 ); provided that any Borrower shall not have any obligation hereunder to the Administrative Agent, any other Agent, any Issuing Lender or any Lender (or any of their respective affiliates, or any of their respective officers, directors, employees, shareholders, members, attorneys and other advisors, agents and controlling persons with respect to Indemnified Liabilities arising from ( i ) the gross negligence, bad faith or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable decision, or by settlement tantamount thereto) of the Administrative Agent, any such other Agent, any LC Facility Issuing Lender or any such Lender (or any of their respective affiliates, or any of their respective officers, directors, employees, shareholders, members, agents, attorneys and other advisors, successors and controlling persons), ( ii ) claims made or legal proceedings commenced against the Administrative Agent, any other Agent, any Issuing Lender or any such Lender by any security holder or creditor thereof arising out of and based upon rights afforded any such security holder or creditor solely in its capacity as such, ( iii ) claims of any Indemnitee (or any Related Party thereof) solely against one or more Indemnitees (or any Related Party thereof or disputes between or among Indemnitees (or any Related Party thereof) in each case except to the extent such claim is determined to have been caused by an act or omission by the Parent Borrower or any of its Subsidiaries or such dispute involves any Agent in its capacity as such and ( iv ) a material breach of the Loan Documents by the applicable Indemnitee (or any Related Party thereof). To the fullest extent permitted under applicable law, no Indemnitee shall be liable for any consequential or punitive damages in connection with the Facility. All amounts due under this subsection shall be payable not later than 30 days after written demand therefor. Statements reflecting amounts payable by the Loan Parties pursuant to this subsection 11.5 shall be submitted to the address of the Borrowers set forth in subsection 11.2 , or to such other Person or address as may be hereafter designated by the Parent Borrower in a notice to the Administrative Agent. Notwithstanding the foregoing, except as provided in clauses (b) and (c) above and in Section 4 , the Borrowers shall have no obligation under this subsection 11.5 to any Indemnitee with respect to any Taxes imposed, levied, collected, withheld or assessed by any Governmental Authority. The agreements in this subsection shall survive repayment of the Loans, the L/C Obligations and all other amounts payable hereunder.
11.6 Successors and Assigns; Participations and Assignments .
(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any affiliate of an Issuing Lender that issues any Letter of Credit), except that ( i ) other than in accordance with subsection 8.3 , the Borrowers may not assign or otherwise transfer any of their rights or obligations hereunder without the prior written
 
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consent of each Lender (and any attempted assignment or transfer by any Borrower without such consent shall be null and void) and ( ii ) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with subsections 4.13(d) , 4.17(c) and 11.1(f) and this subsection 11.6 .
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender other than a Conduit Lender may, in accordance with applicable law, assign (other than to a Disqualified Lender or any natural person) to one or more assignees (each, an “ Assignee ”) all or a portion of its rights and obligations under this Agreement (including its Commitments and/or Loans, pursuant to an Assignment and Acceptance) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:
(A) the Parent Borrower, provided that no consent of the Parent Borrower shall be required for an assignment to a Lender or, if an Event of Default under subsection 9(a) or 9(f) has occurred and is continuing, to any other Person; provided, further, that if any Lender assigns all or a portion of its rights and obligations under this Agreement to one of its affiliates in connection with or in contemplation of the sale or other disposition of its interest in such affiliate, the Parent Borrower’s prior written consent shall be required for such assignment; and
(B) the Administrative Agent, the Swing Line Lender and each Issuing Lender.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender, an affiliate or branch of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans, as the case may be, the amount of Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $25,000,000 and in integral multiples of $1,000,000 in excess thereof unless the Parent Borrower and the Administrative Agent otherwise consent, provided that ( 1 ) no such consent of the Parent Borrower shall be required if an Event of Default under subsection 9(a) or 9(f) has occurred and is continuing and ( 2 ) such amounts shall be aggregated in respect of each Lender and its affiliates and branches or Approved Funds, if any;
(B) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and
 
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Acceptance, together with a processing and recordation fee of $3,500 (unless such assignment is ( 1 ) waived by the Administrative Agent in any given case or ( 2 ) is made by a Commitment Party or any of its Affiliates or branches); provided that for concurrent assignments to two or more Approved Funds such assignment fee shall only be required to be paid once in respect of and at the time of such assignments;
(C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent ( 1 ) an administrative questionnaire and ( 2 ) an executed joinder to that certain Collateral Allocation Agreement, dated as of the date hereof, among the Administrative Agent, the ABL Collateral Agent, the Swing Line Lender, each Issuing Lender and each Lender (as it may be amended, amended and restated, modified or supplemented from time to time); and
(D) any assignment made by a Canadian Facility Lender of its Canadian Facility Commitment shall only be made to a Person or group of Persons that qualifies as a Canadian Facility Lender, unless an Event of Default under subsection 9(a) or 9(f) has occurred and is continuing.
(iii) For the purposes of this subsection 11.6 , the term “ Approved Fund ” has the following meaning: any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered or managed by ( a ) a Lender, ( b ) an affiliate or branch of a Lender or ( c ) an entity or an affiliate of an entity that administers or manages a Lender.
(iv) Subject to acceptance and recording thereof pursuant to paragraph (b)(vi) below, from and after the effective date specified in each Assignment and Acceptance the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of (and bound by any related obligations under) subsections 4.10 , 4.11 , 4.12 , 4.13 , 4.17 and 11.5 , and bound by its continuing obligations under subsection 11.16 ). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 11.6 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this subsection 11.6 .
 
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(v) The Borrowers hereby designate the Administrative Agent, and the Administrative Agent agrees, to serve as the Borrowers’ agent, solely for purposes of this subsection 11.6 , to maintain at one of its offices in New York, New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and interest and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent, the Issuing Lender and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers, the ABL Collateral Agent, each Issuing Lender and any Lender (with respect to its own interest only), at any reasonable time and from time to time upon reasonable prior notice.
(vi) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender (unless such assignment is being made in accordance with subsection 4.13(d) , 4.17(c) or 11.1(g) , in which case the effectiveness of such Assignment and Acceptance shall not require execution by the assigning Lender) and an Assignee, the Assignee’s satisfaction of the requirements of subsection 11.6(b)(ii)(C) (unless the Assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this subsection 11.6 and any written consent to such assignment required by paragraph (b) of this subsection 11.6 , the Administrative Agent shall accept such Assignment and Acceptance, record the information contained therein in the Register and give prompt notice of such assignment and recordation to the Borrower Representative. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(vii) On or prior to the effective date of any assignment pursuant to this subsection 11.6(b) , the assigning Lender shall surrender any outstanding Notes held by it all or a portion of which are being assigned. Any Notes surrendered by the assigning Lender shall be returned by the Administrative Agent to the Borrower Representative marked “cancelled.”
Notwithstanding the foregoing provisions of this subsection 11.6(b) or any other provision of this Agreement, if the Parent Borrower shall have consented thereto in writing (such consent not to be unreasonably withheld), the Administrative Agent shall have the right, but not the obligation, to effectuate assignments of Loans and Commitments via an electronic settlement system acceptable to the Administrative Agent and the Parent Borrower as designated in writing from time to time to the Lenders by the Administrative Agent (the “ Settlement Service ”). At any time when the Administrative Agent elects, in its sole discretion, to implement such Settlement Service, each such assignment shall be effected by the assigning Lender and proposed Assignee pursuant to the procedures then in effect under the Settlement Service, which procedures shall be subject to the prior written approval of the Parent Borrower and shall be consistent with the other
 
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provisions of this subsection 11.6(b) . Each assigning Lender and proposed Assignee shall comply with the requirements of the Settlement Service in connection with effecting any assignment of Loans and Commitments pursuant to the Settlement Service. If so elected by each of the Administrative Agent and the Parent Borrower in writing (it being understood that the Parent Borrower shall have no obligation to make such an election), the Administrative Agent’s and the Parent Borrower’s approval of such Assignee shall be deemed to have been automatically granted with respect to any transfer effected through the Settlement Service. Assignments and assumptions of the Loans and Commitments shall be effected by the provisions otherwise set forth herein until the Administrative Agent notifies Lenders of the Settlement Service as set forth herein. The Parent Borrower may withdraw its consent to the use of the Settlement Service at any time upon at least 10 Business Days’ (or such shorter period as may be agreed to by the Administrative Agent) prior written notice to the Administrative Agent, and thereafter assignments and assumptions of the Loans and Commitments shall be effected by the provisions otherwise set forth herein.
Furthermore, no Assignee, which as of the date of any assignment to it pursuant to this subsection 11.6(b) would be entitled to receive any greater payment under subsection 4.10 , 4.11 or 11.5 than the assigning Lender would have been entitled to receive as of such date under such subsections with respect to the rights assigned, shall be entitled to receive such greater payments unless the assignment was made after an Event of Default under subsection 9(a) or 9(f) has occurred and is continuing or the Parent Borrower has expressly consented in writing to waive the benefit of this provision at the time of such assignment.
(c) (i) Any Lender other than a Conduit Lender may, in accordance with applicable law, without the consent of the Parent Borrower or the Administrative Agent, sell participations (other than to Disqualified Lenders and natural persons) to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that ( A ) such Lender’s obligations under this Agreement shall remain unchanged, ( B ) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, ( C ) such Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Loan Documents, and ( D ) the Borrowers, the Administrative Agent, each Issuing Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that ( 1 ) requires the consent of each Lender directly and adversely affected thereby pursuant to the proviso to the second sentence of subsection 11.1(a) , ( 2 ) directly and adversely affects such Participant and ( 3 ) requires the consent of all Lenders. Subject to paragraph (c)(ii) of this subsection, the Parent Borrower agrees that each Participant shall be entitled to the benefits of (and shall have the related obligations under) subsections 4.10 , 4.11 , 4.12 , 4.13 , 4.17 and 11.5 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this subsection. To the extent permitted by
 
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law, each Participant also shall be entitled to the benefits of subsection 11.7(b) as though it were a Lender, provided that such Participant shall be subject to subsection 11.7(a) as though it were a Lender. Notwithstanding the foregoing, no Lender shall be permitted to sell participations under this Agreement to any Disqualified Lender.
(ii) No Loan Party shall be obligated to make any greater payment under subsection 4.10 , 4.11 or 11.5 than it would have been obligated to make in the absence of any participation, unless the sale of such participation is made with the prior written consent of the Parent Borrower and the Parent Borrower expressly waives the benefit of this provision at the time of such participation. No Participant shall be entitled to the benefits of subsection 4.11 to the extent such Participant fails to comply with subsection 4.11(b) or to provide the forms and certificates referenced therein to the Lender that granted such participation and such failure increases the obligation of the Borrowers under subsection 4.11 .
(iii) Subject to paragraph (c)(ii), any Lender other than a Conduit Lender may also sell participations on terms other than the terms set forth in paragraph (c)(i) above, provided such participations are on terms and to Participants satisfactory to the Parent Borrower and the Parent Borrower has consented to such terms and Participants in writing.
(iv) Each Lender that sells a participation shall, acting for itself and, solely for this purpose, as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the interest and principal amounts of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations or other applicable law. The entries in the Participant Register shall be conclusive absent manifest error, and each Lender shall treat each Person whose name is recorded in its Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.
(d) Any Lender, without the consent of the Borrowers or the Administrative Agent, may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this subsection 11.6 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute (by foreclosure or otherwise) any such pledgee or Assignee for such Lender as a party hereto.
 
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(e) No assignment or participation made or purported to be made to any Assignee or Participant shall be effective without the prior written consent of the Parent Borrower if it would require the Parent Borrower to make any filing with any Governmental Authority or qualify any Loan or Note under the laws of any jurisdiction, and the Parent Borrower shall be entitled to request and receive such information and assurances as it may reasonably request from any Lender or any Assignee or Participant to determine whether any such filing or qualification is required or whether any assignment or participation is otherwise in accordance with applicable law.
(f) Notwithstanding the foregoing, any Conduit Lender may assign any or all of the Revolving Credit Loans it may have funded hereunder to its designating Lender without the consent of the Parent Borrower or the Administrative Agent and without regard to the limitations set forth in subsection 11.6(b) . Each Borrower, each Lender and the Administrative Agent hereby confirms that it will not institute against a Conduit Lender or join any other Person in instituting against a Conduit Lender any domestic or foreign bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any state, federal, provincial or foreign bankruptcy or similar law, for one year and one day after the payment in full of the latest maturing commercial paper note issued by such Conduit Lender; provided , however , that each Lender designating any Conduit Lender hereby agrees to indemnify, save and hold harmless each other party hereto for any loss, cost, damage or expense arising out of its inability to institute such a proceeding against such Conduit Lender during such period of forbearance. Each such indemnifying Lender shall pay in full any claim received from the Parent Borrower pursuant to this subsection 11.6(f) within 30 Business Days of receipt of a certificate from a Responsible Officer of the Parent Borrower specifying in reasonable detail the cause and amount of the loss, cost, damage or expense in respect of which the claim is being asserted, which certificate shall be conclusive absent manifest error. Without limiting the indemnification obligations of any indemnifying Lender pursuant to this subsection 11.6(f) , in the event that the indemnifying Lender fails timely to compensate the Parent Borrower for such claim, any Loans held by the relevant Conduit Lender shall, if requested by the Parent Borrower, be assigned promptly to the Lender that administers the Conduit Lender and the designation of such Conduit Lender shall be void.
(g) If the Parent Borrower wishes to replace the Loans or Commitments with ones having different terms, it shall have the option, with the consent of the Administrative Agent and subject to at least three Business Days’ advance notice to the Lenders, instead of prepaying the Loans or reducing or terminating the Commitments to be replaced, to ( i ) require the Lenders to assign such Loans or Commitments to the Administrative Agent or its designees and ( ii ) amend the terms thereof in accordance with subsection 11.1 (with such replacement, if applicable, being deemed to have been made pursuant to subsection 11.1(d) ). Pursuant to any such assignment, all Loans to be replaced shall be purchased at par (allocated among the Lenders in the same manner as would be required if such Loans were being optionally prepaid or such Commitments were being optionally reduced or prepaid by the Borrowers), accompanied by payment of any accrued interest and fees thereon and any amounts owing pursuant to subsection 4.12 . By receiving such purchase price, the Lenders, as applicable, shall automatically be deemed to have assigned the Loans or Commitments pursuant to the terms of the form of
 
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Assignment and Acceptance attached hereto as Exhibit A , and accordingly no other action by such Lenders shall be required in connection therewith. The provisions of this paragraph are intended to facilitate the maintenance of the perfection and priority of existing security interests in the Collateral during any such replacement.
11.7 Adjustments; Set-off; Calculations; Computations .
(a) If any Lender (a “ Benefited Lender ”) shall at any time receive any payment of all or part of the U.S. Facility Revolving Credit Loans or Reimbursement Obligations in respect of Letters of Credit issued by a U.S. Facility Issuing Lender owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in subsection 9(f) , or otherwise) (except pursuant to subsection 2.6 , 2.7 , 4.4 , 4.9 , 4.10 , 4.11 , 4.12 , 4.13(d) , 4.17 , 11.1(f) or 11.6 ), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender’s U.S. Facility Revolving Credit Loans or the Reimbursement Obligations in respect of Letters of Credit issued by a U.S. Facility Issuing Lender, as the case may be, owing to it, or interest thereon, such Benefited Lender shall purchase for cash from the other Lenders an interest (by participation, assignment or otherwise) in such portion of each such other Lender’s U.S. Facility Revolving Credit Loans or the Reimbursement Obligations in respect of Letters of Credit issued by a U.S. Facility Issuing Lender, as the case may be, owing to it, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided , however , that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. If any Lender (a “ Canadian Benefited Lender ”) shall at any time receive any payment of all or part of the Canadian Facility Revolving Credit Loans or Reimbursement Obligations in respect of Letters of Credit issued by a Canadian Facility Issuing Lender owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in subsection 9(f) , or otherwise) (except pursuant to subsection 2.6 , 2.7 , 4.4 , 4.9 , 4.10 , 4.11 , 4.12 , 4.13(d) , 4.17 , 11.1(f) or 11.6 ), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender’s Canadian Facility Revolving Credit Loans or the Reimbursement Obligations in respect of Letters of Credit issued by a Canadian Facility Issuing Lender owing to it, as the case may be, owing to it, or interest thereon, such Canadian Benefited Lender shall purchase for cash from the Canadian Facility Lenders an interest (by participation, assignment or otherwise) in such portion of each such Canadian Facility Lender’s Canadian Facility Revolving Credit Loans or the Reimbursement Obligations in respect of Letters of Credit issued by a Canadian Facility Issuing Lender, as the case may be, owing to it, or shall provide such Canadian Facility Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Canadian Benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Canadian Facility Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Canadian Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.
 
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(b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to any Borrower, any such notice being expressly waived by each Borrower to the extent permitted by applicable law, upon the occurrence of an Event of Default under subsection 9(a) to set-off and appropriate and apply against any amount then due and payable under subsection 9(a) by any Borrower any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of such Borrower. Each Lender agrees promptly to notify the Borrower Representative and the Administrative Agent after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application.
11.8 Judgment .
(a) If, for the purpose of obtaining or enforcing judgment against any Loan Party in any court in any jurisdiction, it becomes necessary to convert into any other currency (such other currency being hereinafter in this subsection 11.8 referred to as the “ Judgment Currency ”) an amount due under any Loan Document in any currency (the “ Obligation Currency ”) other than the Judgment Currency, the conversion shall be made at the rate of exchange prevailing on the Business Day immediately preceding the date of actual payment of the amount due, in the case of any proceeding in the courts of the Province of Ontario or in the courts of any other jurisdiction that will give effect to such conversion being made on such date, or the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this subsection 11.8 being hereinafter in this subsection 11.8 referred to as the “ Judgment Conversion Date ”).
(b) If, in the case of any proceeding in the court of any jurisdiction referred to in subsection 11.8(a) , there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual receipt for value of the amount due, the applicable Loan Party shall pay such additional amount (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount actually received in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of the Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date. Any amount due from any Loan Party under this subsection 11.8(b) shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of any of the Loan Documents.
(c) The term “rate of exchange” in this subsection 11.8 means the rate of exchange at which the Administrative Agent, on the relevant date at or about 12:00 Noon
 
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(New York City time), would be prepared to sell, in accordance with its normal course foreign currency exchange practices, the Obligation Currency against the Judgment Currency.
11.9 Counterparts . This Agreement may be executed by one or more of the parties to this Agreement in any number of separate counterparts (including by telecopy or other electronic transmission), and all of such counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be delivered to the Borrower Representative and the Administrative Agent.
11.10 Severability . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
11.11 Integration. This Agreement and the other Loan Documents represent the entire agreement of each of the Loan Parties party hereto, the Agents, the Issuing Lender and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any of the Loan Parties party hereto, the Agents, the Issuing Lender or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.
11.12 GOVERNING LAW . THIS AGREEMENT AND ANY NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
11.13 Submission to Jurisdiction; Waivers . Each party hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially
 
231

similar form of mail), postage prepaid, to the applicable Borrowers (or, in the case of a Canadian Borrower, as specified in subsection 11.13(f) ), the applicable Lender or the Administrative Agent, as the case may be, at the address specified in subsection 11.2 or at such other address of which the Administrative Agent, any such Lender and any such Borrower shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction;
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection any consequential or punitive damages;
(f) the Canadian Borrower hereby agrees to irrevocably and unconditionally appoint an agent for service of process located in the City of New York (the “ New York Process Agent ”), reasonably satisfactory to the Administrative Agent, as its agent to receive on behalf of the Canadian Borrower and its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding in any such New York State or Federal court described in paragraph (a) of this subsection 11.13 and agrees promptly to appoint a successor New York Process Agent in the City of New York (which successor New York Process Agent shall accept such appointment in a writing reasonably satisfactory to the Administrative Agent) prior to the termination for any reason of the appointment of the initial New York Process Agent. [ — ] has been appointed as the initial New York Process Agent. In any action or proceeding in New York State or Federal court, service may be made on the Canadian Borrower by delivering a copy of such process to the Canadian Borrower in care of the New York Process Agent at the New York Process Agent’s address and by depositing a copy of such process in the mails by certified or registered air mail, addressed to the Canadian Borrower at its address specified in subsection 11.2 with (if applicable) a copy to the Parent Borrower (such service to be effective upon such receipt by the New York Process Agent and the depositing of such process in the mails as aforesaid). The Canadian Borrower hereby irrevocably and unconditionally authorizes and directs the New York Process Agent to accept such service on its behalf. As an alternate method of service, the Canadian Borrower irrevocably and unconditionally consents to the service of any and all process in any such action or proceeding in such New York State or Federal court by mailing of copies of such process to the Canadian Borrower by certified or registered air mail at its address specified in subsection 11.2 . The Canadian Borrower agrees that, to the fullest extent permitted by applicable law, a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law; and
(g) to the extent that the Canadian Borrower has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with respect to itself or any of its property, the Canadian Borrower hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under this Agreement and any Note.
 
232

11.14 Acknowledgements . Each Loan Party hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any other Agent, Other Representative, Issuing Lender or Lender has any fiduciary relationship with or duty to any Loan Party arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Administrative Agent and Lenders, on the one hand, and the Loan Parties, on the other hand, in connection herewith or therewith is solely that of creditor and debtor; and
(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby and thereby among the Lenders or among any of the Loan Parties and the Lenders.
11.15 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.16 Confidentiality .
(a) Each Agent, each Issuing Lender, each Other Representative and each Lender agrees to keep confidential any information ( x ) provided to it by or on behalf of Holding or any of its Subsidiaries pursuant to or in connection with the Loan Documents or ( y ) obtained by such Lender based on a review of the books and records of Holding or any of its Subsidiaries; provided that nothing herein shall prevent any Lender from disclosing any such information ( i ) to any Agent, Issuing Lender, any Other Representative or any other Lender, ( ii ) to any Transferee, or prospective Transferee or any creditor or any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to any Borrower and its obligations which agrees to comply with the provisions of this subsection (or with other confidentiality provisions satisfactory to and consented to in writing by the Parent Borrower) pursuant to a written instrument (or electronically recorded agreement from any Person listed above in this clause (ii), which Person has been approved by the Parent Borrower (such approval not be unreasonably withheld), in respect to any electronic information (whether posted or otherwise distributed on IntraLinks™ or any other electronic distribution system)) for the benefit of the Borrowers (it being understood that each relevant Lender shall be solely responsible for obtaining such instrument (or such electronically recorded agreement)), ( iii ) to its affiliates and the employees, officers, directors, agents, attorneys, accountants and other professional advisors of it and its affiliates, provided that such Lender shall inform each such Person of the agreement under this subsection 11.16 and take reasonable actions to cause compliance by any such Person referred to in this clause (iii)
 
233

with this agreement (including, where appropriate, to cause any such Person to acknowledge its agreement to be bound by the agreement under this subsection 11.16 ), ( iv ) upon the request or demand of any Governmental Authority having jurisdiction over such Lender or its affiliates or to the extent required in response to any order of any court or other Governmental Authority or as shall otherwise be required pursuant to any Requirement of Law, provided that such Lender shall, unless prohibited by any Requirement of Law, notify the Borrower Representative of any disclosure pursuant to this clause (iv) as far in advance as is reasonably practicable under such circumstances, ( v ) which has been publicly disclosed other than in breach of this Agreement, ( vi ) in connection with the exercise of any remedy hereunder, under any Loan Document or under any Interest Rate Agreement related to the Loan Documents, ( vii ) in connection with periodic regulatory examinations and reviews conducted by the National Association of Insurance Commissioners or any Governmental Authority having jurisdiction over such Lender or its affiliates (to the extent applicable), ( viii ) in connection with any litigation to which such Lender (or, with respect to any Interest Rate Agreement related to the Loan Documents, any affiliate of any Lender party thereto) may be a party, subject to the proviso in clause (iv), and ( ix ) if, prior to such information having been so provided or obtained, such information was already in an Agent’s, Issuing Lender’s, Other Representative’s or a Lender’s possession on a non-confidential basis without a duty of confidentiality to Holding or the Parent Borrower (or any of their respective Affiliates) being violated. Notwithstanding any other provision of this Agreement, any other Loan Document or any Assignment and Acceptance, the provisions of this subsection 11.16 shall survive with respect to each Agent and Lender until the second anniversary of such Agent or Lender ceasing to be an Agent or Lender, respectively.
(b) Each Lender acknowledges that any such information referred to in subsection 11.16(a) , and any information (including requests for waivers and amendments) furnished by the Parent Borrower or the Administrative Agent pursuant to or in connection with this Agreement and the other Loan Documents, may include material non-public information concerning the Parent Borrower, the other Loan Parties and their respective Affiliates or their respective securities. Each Lender represents and confirms that such Lender has developed compliance procedures regarding the use of material non-public information; that such Lender will handle such material non-public information in accordance with those procedures and applicable law, including United States federal and state securities laws; and that such Lender has identified to the Administrative Agent a credit contact who may receive information that may contain material non-public information in accordance with its compliance procedures and applicable law.
11.17 Incremental Indebtedness; Additional Obligations . In connection with the incurrence by any Loan Party or any Subsidiary thereof of any Incremental Indebtedness or Additional Obligations, each of the Administrative Agent and the ABL Collateral Agent agrees to execute and deliver any intercreditor agreement, including any applicable Intercreditor Agreement and any amendments, amendments and restatements, restatements or waivers of or supplements to or other modifications to, any Security Document (including, but not limited to, any Mortgages), and to make or consent to any filings or take any other actions in connection
 
234

therewith, as may be reasonably deemed by the Parent Borrower to be necessary or reasonably desirable for any Lien on the assets of any Loan Party permitted to secure such Incremental Facility or Additional Obligations to become a valid, perfected lien (with such priority as may be designated by the relevant Loan Party or Subsidiary, to the extent such priority is permitted by the Loan Documents) pursuant to the Security Document being so amended, amended and restated, restated, waived, supplemented or otherwise modified or otherwise.
11.18 USA Patriot Act Notice . Each Lender hereby notifies each Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. Law 107-56 (signed into law October 26, 2001)) (the “ Patriot Act ”), it is required to obtain, verify, and record information that identifies each Borrower and Subsidiary Guarantor, which information includes the name of each Borrower and each Subsidiary Guarantor and other information that will allow such Lender to identify each Borrower and Subsidiary Guarantor in accordance with the Patriot Act, and each Borrower and Subsidiary Guarantor agrees to provide such information from time to time to any Lender.
11.19 Joint and Several Liability; Postponement of Subrogation .
(a) The obligations of the U.S. Borrowers hereunder and under the other Loan Documents shall be joint and several and, as such, each U.S. Borrower shall be liable for all of the obligations of the other U.S. Borrower under this Agreement and the other Loan Documents. To the fullest extent permitted by law the liability of each U.S. Borrower for the obligations under this Agreement and the other Loan Documents of the other applicable U.S. Borrowers with whom it has joint and several liability shall be absolute, unconditional and irrevocable, without regard to ( i ) the validity or enforceability of this Agreement or any other Loan Document, any of the obligations hereunder or thereunder or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any applicable Secured Party, ( ii ) any defense, set-off or counterclaim (other than a defense of payment or performance hereunder; provided that no U.S. Borrower hereby waives any suit for breach of a contractual provision of any of the Loan Documents) which may at any time be available to or be asserted by such other applicable U.S. Borrower or any other Person against any Secured Party or ( iii ) any other circumstance whatsoever (with or without notice to or knowledge of such other applicable U.S. Borrower or such U.S. Borrower) which constitutes, or might be construed to constitute, an equitable or legal discharge of such other applicable U.S. Borrower for the obligations hereunder or under any other Loan Document or of such U.S. Borrower under this subsection 11.19 , in bankruptcy or in any other instance.
(b) Each Borrower agrees that it will not exercise any rights which it may acquire by way of rights of subrogation under this Agreement, by any payments made hereunder or otherwise, until the prior payment in full in cash of all of the obligations hereunder and under any other Loan Document, the termination or expiration of all Letters of Credit and the permanent termination of all Commitments. Any amount paid to any Borrower on account of any such subrogation rights prior to the payment in full in cash of all of the obligations hereunder and under any other Loan Document, the termination or expiration of all Letters of Credit and the permanent termination of all Commitments shall be held in trust for the benefit of the applicable Secured Parties and
 
235

shall immediately be paid to the Administrative Agent for the benefit of the applicable Secured Parties and credited and applied against the obligations of the applicable Borrowers, whether matured or unmatured, in such order as the Administrative Agent shall elect. In furtherance of the foregoing, for so long as any obligations of the Borrowers hereunder, any Letters of Credit or any Commitments remain outstanding, each Borrower shall refrain from taking any action or commencing any proceeding against any other Borrower (or any of its successors or assigns, whether in connection with a bankruptcy proceeding or otherwise) to recover any amounts in respect of payments made in respect of the obligations hereunder or under any other Loan Document of such other Borrower to any Secured Party. Notwithstanding any other provision contained in this Agreement or any other Loan Document, if a “secured creditor” (as that term is defined under the Bankruptcy and Insolvency Act (Canada)) is determined by a court of competent jurisdiction not to include a Person to whom obligations are owed on a joint or joint and several basis, then the Borrowers’ Obligations (and the obligations of their Subsidiaries), to the extent such obligations are secured, only shall be several obligations and not joint or joint and several obligations.
11.20 Language . The parties hereto confirm that it is their wish that this Agreement, as well as any other documents relating to this Agreement, including notices, schedules and authorizations, have been and shall be drawn up in the English language only. Les signataires confirment leur volonté que la présente convention, de même que tous les documents s’y rattachant, y compris tout avis, annexe et autorisation, soient rédigés en anglais seulement .
11.21 Canadian Anti-Money Laundering Legislation . If the Administrative Agent has ascertained the identity of any Loan Party or any authorized signatories of any Loan Party for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and other anti-terrorism laws and “know your client” policies, regulations, laws or rules applicable in Canada (the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and such other anti-terrorism laws, applicable policies, regulations, laws or rules in Canada, collectively, including any guidelines or orders thereunder, “ AML Legislation ”), then the Administrative Agent:
(a) shall be deemed to have done so as an agent for each Lender and this Agreement shall constitute a “written agreement” in such regard between each Lender and the Administrative Agent within the meaning of the applicable AML Legislation; and
(b) shall provide to the Lenders, copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.
Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each Lender agrees that the Administrative Agent has no obligation to ascertain the identity of the Loan Parties or any authorized signatories of the Loan Parties on behalf of any Lender, or to confirm the completeness or accuracy of any information it obtains from any Loan Party or any such authorized signatory in doing so.
[Signature Pages Follow]
 
236

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers, as of the date first written above.

 BORROWER:	 		 	XPEDX INTERMEDIATE, LLC	
				
	 		 	By:	 	 	
	 		 		 	Name:	
	 		 		 	Title:	
			
	 		 	XPEDX, LLC	
				
	 		 	By:	 	 	
	 		 		 	Name:	
	 		 		 	Title:	
 
[Signature Page to ABL Credit Agreement]

							
 AGENT:	 		 	BANK OF AMERICA, N.A.,	
	 		 	as Administrative Agent, ABL Collateral Agent,
Swing Line Lender and a U.S. Facility Lender	
				
	 		 	By:	 	 	
	 		 		 	Name:	
	 		 		 	Title:	
			
ISSUING LENDER:	 		 	BANK OF AMERICA, N.A.,	
	 		 	as U.S. Facility Issuing Lender	
				
	 		 	By:	 	 	
	 		 		 	Name:	
	 		 		 	Title:	
			
	 		 	BANK OF AMERICA, N.A. (acting through its Canada branch),	
	 		 	as Canadian Facility Issuing Lender and a Canadian Facility Lender	
				
	 		 	By:	 	 	
	 		 		 	Name:	
	 		 		 	Title:	
 
[Signature Page to ABL Credit Agreement]

							
LENDER:	 		 		 		
			
	 		 	[                                         ],	
	 		 	as U.S. Facility Lender	
				
	 		 	By:	 	 	
	 		 		 	Name:	
	 		 		 	Title:	
			
	 		 	[                                         ],	
	 		 	as Canadian Facility Lender	
				
	 		 	By:	 	 	
	 		 		 	Name:	
	 		 		 	Title:	
 
[Signature Page to ABL Credit Agreement]

SCHEDULE A 1
Commitments and Addresses

Lender	  	Commitment	
BANK OF AMERICA, N.A.
One Bryant Park
New York, NY 10036	  	[To come]	
		
WELLS FARGO BANK, N.A.
240 Colorado Boulevard
Suite 300 West
Santa Monica, California 90404	  	[To come]	
		
SUNTRUST BANK
303 Peachtree Street
Atlanta, Georgia 30308	  	[To come]	

Total:	  	[To come]	

 

1  	Lenders to confirm.	
 
1

SCHEDULE 1.1E
Existing Letters of Credit
A. xpedx
None.
B. Unisource
Standby Letters of Credit

Applicant	  	Beneficiary	  	Issue Date	  	Expiration
Date	  	Current
Amount of
L/C	 	  	Letter of
Credit
Number	 	  	Issued by	
							
Unisource Worldwide, Inc.	  	ACE American Insurance Company	  	December 4,
2007	  	11/30/14	  	 	5,298,126.00	  	  	 	3044007	  	  	Bank of America	
							
Unisource Worldwide, Inc.	  	Travelers Casualty and Surety Company of America	  	January 31,
2003	  	1/30/15	  	 	214,554.00	  	  	 	3053849	  	  	Bank of America	
							
Unisource Worldwide, Inc.	  	Solaris Paper, Inc.	  	March 11,
2009	  	3/31/15	  	 	750,000.00	  	  	 	3044009	  	  	Bank of America	
							
Unisource Worldwide, Inc.	  	Gold East Trading (Hong Kong) Company Limited	  	July 1, 2009	  	7/1/14	  	 	1,500,000.00	  	  	 	3044010	  	  	Bank of America	
Commercial Letters of Credit
None.
 
2

SCHEDULE 1.1T
Transaction Agreements
 
1.	Agreement and Plan of Merger by and among International Paper, Spinco, the Parent Borrower, the OpCo Borrower, Holding Parent, UWWH and Unisource, dated as of January 28, 2014 as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of May 28, 2014	
 
2.	Contribution and Distribution Agreement among International Paper, Spinco, UWWH and Holding Parent, dated as of January 28, 2014 as amended by Amendment No. 1 to the Contribution and Distribution Agreement, dated as of May 28, 2014	
 
3.	Tax Matters Agreement by and among International Paper, Spinco and UWWH, dated as of January 28, 2014	
 
4.	Employee Matters Agreement by and between International Paper, Spinco and UWWH, dated as of January 28, 2014	
 
5.	Tax Receivable Agreement by and among Spinco and Holding Parent, to be dated as of the date hereof	
 
6.	Registration Rights Agreement between Spinco and Holding Parent, to be dated as of the date hereof	
 
7.	Transition Services Agreement between International Paper and Spinco, to be dated as of the date hereof	
 
8.	Supply Agreement between International Paper and Spinco for CPB, to be dated as of the date hereof	
 
9.	Supply Agreement between International Paper and Spinco for Supply of Products to IP, to be dated as of the date hereof	
 
10.	Supply Agreement between International Paper and Spinco for P&CP, to be dated as of the date hereof	
 
11.	Trademark License Agreement between International Paper and the OpCo Borrower, to be dated as of the date hereof	
 
12.	Employment Agreement, dated as of January 28, 2014, between xpedx Holding Company and Mary A. Laschinger	
 
13.	Consulting and Non-Competition Agreement, dated as of January 28, 2014, between UWW Holdings, Inc. and Allan R. Dragone	
 
3

SCHEDULE 1.1C
Credit Card Issuers and Processors
To be provided.
 
4

SCHEDULE 1.1P
Investments
To be provided.
 
5

SCHEDULE 4.16
DDAs
To come.
 
7

SCHEDULE 5.4
Consents Required
A. xpedx
None.
B. Unisource
None.
 
8

SCHEDULE 5.6
Litigation
A. xpedx
None.
B. Unisource
None.
 
9

SCHEDULE 5.8
Real Property
A. xpedx
[None.]
B. Unisource
[None.]
 
10

SCHEDULE 5.12(b)
Canadian Pension Plans
A. xpedx
None.
B. Unisource
Retirement Plan for Employees of Unisource Canada, Inc.
Unisource (Alberta Bargaining) Pension Plan
Unisource (Winnipeg Bargaining) Pension Plan
Pulp and Paper Industry Pension Plan
 
11

SCHEDULE 5.15
Subsidiaries
A. xpedx 2

Name of Entity	  	Equity Holder	  	Percentage Ownership Interest	  	Jurisdiction of Organization	
xpedx, LLC	  	xpedx Intermediate, LLC	  	100%	  	NY	
				
xpedx International, Inc.	  	xpedx, LLC	  	100%	  	DE	
				
Veritiv Netherlands B.V.	  	xpedx Holdings S.ÀR.L.	  	100%	  	Netherlands	
				
Papelera Kif de Mexico, S.A. de C.V.	  	xpedx Mexico Nominee Holdings S.ÀR.L.	  	0.00002737% xpedx Mexico Nominee
Holdings S.ÀR.L.	  	Mexico	
	  	xpedx Holdings S.ÀR.L.	  		  		
	  		  	99.99997263% xpedx Holdings S.ÀR.L.	  		
				
Oficina Central De de Servicios, S.A. de C.V.	  	xpedx Mexico Nominee Holdings S.ÀR.L	  	0.0010616% xpedx Mexico Nominee Holdings S.ÀR.L.	  	Mexico	
	  	xpedx Holdings S.ÀR.L.	  		  		
	  		  	99.9989384% xpedx Holdings S.ÀR.L.	  		
				
xpedx, S.A. de C.V.	  	xpedx Mexico Nominee Holdings S.ÀR.L	  	0.002% xpedx Mexico Nominee Holdings S.ÀR.L.	  	Mexico	
	  	xpedx Holdings S.ÀR.L.	  		  		
	  		  	99.998% xpedx Holdings S.ÀR.L.	  		
				
MC xpedx, S. de R.L. de C.V.	  	Oficina Central de Servicios, S.A. de C.V.	  	0.002% Oficina Central De de Servicios, S.A. de C.V.	  	Mexico	
	  	xpedx, S.A. de C.V.	  		  		
	  		  	99.998% xpedx, S.A. de C.V.	  		
				
xpedx Mexico Nominee Holdings S. ÀR.L.	  	xpedx Holdings S.ÀR.L.	  	100%	  	Luxembourg	
				
xpedx Holdings S. ÀR.L.	  	xpedx, LLC	  	100%	  	Luxembourg	

2  	This reflects ownership structure at first draw by xpedx, LLC, immediately prior to distribution of Veritiv Corporation common stock.	
 
12

B. Unisource

Name of Entity	  	Equity Holder	  	Percentage Ownership Interest	  	Jurisdiction of Organization	
Unisource International Holdings, Inc.	  	Unisource Worldwide, Inc.	  	100%	  	DE	
				
Graphic Communications Holdings, Inc.	  	Unisource Worldwide, Inc.	  	100%	  	CA	
				
Paper Corporation of North America	  	Unisource Worldwide, Inc.	  	100%	  	DE	
				
Alco Realty, Inc.	  	Unisource Worldwide, Inc.	  	100%	  	DE	
				
Unisource Realty, Inc.	  	Unisource Worldwide, Inc.	  	100%	  	DE	
				
Unisource International Holdings Poland, Inc.	  	Unisource International Holdings, Inc.	  	100%	  	DE	
				
Unisource International SA, Inc.	  	Unisource International Holdings, Inc.	  	100%	  	DE	
				
Graph Comm Holdings International, Inc.	  	Graphic Communications Holdings, Inc.	  	100%	  	CA	
				
Unisource Global Solutions- Singapore Pte. Ltd.	  	Unisource International Holdings, Inc.	  	100%	  	Singapore	
				
Unisource Global Solutions- Malaysia Sdn. Bhd.	  	Unisource International Holdings, Inc.	  	100%	  	Malaysia	
				
UWW Corporativos S.A. de C.V.	  	Unisource International Holdings, Inc.;	  	1%	  	Mexico	
				
	  	Unisource International SA, Inc.	  	99%	  		
				
Unisource Servicos Para Impressoes Ltda.	  	Unisource International Holdings, Inc.;	  	1%	  	Brazil	
				
	  	Unisource International SA, Inc.	  	99%	  		
 
13

							
Name of Entity	  	Equity Holder	  	Percentage Ownership Interest	  	Jurisdiction of Organization	
Servicios Resources for Uni-Worldwide, S.A. de C.V.	  	Unisource International SA, Inc.	  	1%	  	Mexico	
				
	  	UWW Corporativos S.A. de C.V.	  	99%	  		
				
Unisource Belgium BVBA f/k/a Graph Comm Belgium BVBA	  	Graphic Communications Holdings, Inc.	  	1%	  	Belgium	
				
	  	Graph Comm Holdings International, Inc.	  	99%	  		
				
Unisource Sweden AB	  	Unisource Belgium BVBA	  	100%	  	Sweden	
				
Unisource International China, Inc.	  	Unisource International Holdings, Inc.	  	100%	  	DE	
				
Unisource Trading (Shanghai) Co. LTD.	  	Unisource International China, Inc.	  	100%	  	China	
				
Unisource Canada, Inc.	  	Paper Corporation of North America	  	100%	  	Canada	
 
14

SCHEDULE 5.17
Environmental Matters
A. xpedx
None.
B. Unisource
None.

SCHEDULE 7.2
Website Address for Electronic Financial Reporting
None.

SCHEDULE 7.11
Post-Closing Collateral Requirements
[TBD.]

SCHEDULE 8.1
Indebtedness
To be provided.

SCHEDULE 8.2
Existing Liens
A. xpedx

 	  	Debtor
(xpedx entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File
Date	  	Amdt. File
#	
1.	  	(xpedx, LLC)
 
xpedx
 
PO Box 625799
 
Cincinnati, OH 45262
 
&
 
Technology Media Group
 
1208 Viceroy Drive
 
Dallas, TX 75247	  	New York	  	UCC Debtor Search	  	UCC 1	  	Recognition Systems, Inc.
 
30 Harbor Park Drive
 
Port Washington, NY 11050	  	Specified Equipment	  	09/25/2013	  	201309258388920	  		  		

B. Unisource

 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
1.	  	Alco Realty, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	20110966203	  		  		
2.	  	Graph Comm Holdings International, Inc.	  	California	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	11-7263485370	  		  		
3.	  	Graphic Communication Holdings, Inc.	  	California	  	UCC Debtor Search	  	UCC 1	  	SP III 909 Lake Carolyn Parkway, L.P.
 
c/o CB Richard Ellis
 
865 S. Figueroa, Suite 3500
 
Los Angeles, CA 90017
 
c/o CB Richard Ellis Strategic Partners
 
515 S. Flower Street, Suite 3100
 
Los Angeles, CA 90071	  	Debtor’s property situated in or upon specified premises or used within specified project	  	09/08/2006	  	06-7085203647	  	3/24/2011 (Amdt.)
 
3/24/2011 (Cont.)	  	11-72645906
 
11-72645907	
 
21

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
4.	  	Graphic Communication Holdings, Inc.	  	California	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	11-7263485754	  		  		
5.	  	Paper Corporation of North America	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966187	  		  		
6.	  	Unisource Canada, Inc.	  	Canada	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	08/05/2009	  	2009085898	  		  		
7.	  	Unisource Canada, Inc.	  	Canada	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/16/2011	  	2011033257	  		  		
8.	  	Unisource International Holdings, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966161	  		  		
 
22

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
9.	  	Unisource Realty	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966153	  		  		
10.	  	Unisource Worldwide, Inc.
 
133 Peachtree Street NE
 
Atlanta, GA 30303	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Crown Credit Company
 
40 S. Washington Street
 
New Bremen, OH 45869	  	Current and future Equipment leased pursuant to specified lease agreement	  	03/31/2004	  	40905432	  	3/31/2004 (Amdt.)
 
10/14/2008 (Cont.)
 
3/3/2014 (Cont.)	  	40906265
 
83451836
 
40804740	
11.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	UPS Capital Corporation
 
35 Glenlake Parkway, NE
 
Atlanta, GA 30328	  	Specified Equipment	  	01/13/2005	  	50196130	  	11/17/2009 (Cont.)	  	93680540	
12.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	UPS Capital Corporation
 
35 Glenlake Parkway, NE
 
Atlanta, GA 30328	  	Specified Equipment	  	03/18/2005	  	50985052	  	02/04/2010 (Cont.)	  	00389266	
 
23

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
13.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	UPS Capital Corporation
 
35 Glenlake Parkway, NE
 
Atlanta, GA 30328	  	Specified Equipment	  	03/22/2005	  	51001503	  	04/06/2005 (Amdt.)
 
02/04/2010 (Cont.)	  	51053892
 
00389316	
14.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	UPS Capital Corporation
 
35 Glenlake Parkway, NE
 
Atlanta, GA 30328	  	Specified Equipment	  	02/10/2006	  	60576876	  	01/04/2011 (Cont.)	  	10020217	
15.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Current and future Equipment leased pursuant to specified lease agreement	  	02/20/2007	  	70645845	  	1/26/2012 (Cont.)	  	20332058	
16.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Specified Equipment	  	02/20/2007	  	70646314	  	02/10/2012 (Cont.)	  	20552119	
 
24

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
17.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Specified Equipment	  	08/02/2007	  	72944667	  	10/17/2007 (Asgnmt.)
 
10/17/2007 (Amdt.)
 
08/01/2012 (Cont.)	  	73912135
 
73914511
 
22950204	
18.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Specified Equipment	  	10/30/2007	  	74110200	  	05/06/2008 (Asgnmt.)
 
05/06/2008 (Amdt.)
 
10/26/2012 (Cont.)	  	81568557
 
81568987
 
2415958	
19.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Specified Equipment	  	05/28/2008	  	81821162	  	08/21/2008 (Asgnmt.)
 
05/13/2013 (Cont.)	  	82859765
 
31822551	
 
25

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
20.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Leaf Funding, Inc.
 
2005 Market Street, 15 th Floor
 
Philadelphia, PA 19103	  	*All of Debtor’s right, title and interest in all agreements assigned, sold, or otherwise conveyed by Debtor to Secured Creditor (the “Chattel Paper”) and assets related to such Chattel Paper	  	07/16/2009	  	92279542	  		  		
21.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	08/19/2009	  	92664941	  		  		
 
26

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
22.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	08/19/2009	  	92664958	  		  		
23.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	08/19/2009	  	92664974	  		  		
24.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	09/18/2009	  	92997705	  		  		
25.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/13/2009	  	93285415	  		  		
 
27

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
26.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/13/2009	  	93294490	  		  		
27.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	11/05/2009	  	93557433	  		  		
28.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	12/09/2009	  	93944417	  		  		
29.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	12/16/2009	  	94026982	  		  		
 
28

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
30.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	12/16/2009	  	94026990	  		  		
31.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	02/09/2010	  	00442297	  		  		
32.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	02/09/2010	  	00442305	  		  		
33.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	05/11/2010	  	01641806	  		  		
 
29

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
34.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	05/20/2010	  	01779036	  		  		
35.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	07/01/2010	  	02313421	  		  		
36.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	08/10/2010	  	02782005	  		  		
37.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Toyota Motor Credit Corporation
 
P.O. Box 3457
 
Torrance, CA 90510	  	Specified Equipment	  	10/20/2010	  	03668997	  		  		
 
30

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
38.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/20/2010	  	03671751	  		  		
39.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/20/2010	  	03671777	  		  		
40.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/20/2010	  	03671785	  		  		
41.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	02/10/2011	  	10497076	  		  		
 
31

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
42.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Marubeni America Corp.
 
375 Lexington Avenue
 
New York, NY 10017	  	Specified Equipment	  	02/11/2011	  	10524374	  		  		
43.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966146	  		  		
44.	  	Unisource Worldwide, Inc.
 
&
 
Unisource Global Solutions
 
6600 Governors Lake Parkway
 
Norcross, GA 30071	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Sumitomo (SHI) Plastics Machinery (America), LLC
 
1266 Oakbrook Drive
 
Norcross, GA 30093	  	Specified Equipment	  	04/21/11	  	11500936	  		  		
45.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	04/25/2011	  	11536864	  		  		
 
32

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
46.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/17/2011	  	13988055	  		  		
47.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/17/2011	  	13988063	  		  		
48.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Financing Statement Missing	  	10/17/2011	  	13988089	  		  		
 
33

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File
#	
49.	  	Unisource Worldwide, Inc.
 
1090 Bailey Hill Road
 
Eugene, OR 97402	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	U.S. Bank Equipment Finance, A Division of U.S. Bank National Association
 
1310 Madrid Street
 
Marshall, MN 56258	  	Specified Equipment	  	01/12/12	  	20147076	  		  		
50.	  	Unisource Worldwide, Inc.
 
9001 Wyoming Avenue N
 
Brooklyn Park, MN 55445	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Robert Reiser & Co., Inc.
 
725 Dedham Street
 
Canton, MA 02021	  	Specified Equipment	  	06/29/12	  	22532663	  		  		
51.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Marubeni America Corp.
 
375 Lexington Avenue
 
New York, NY 10017	  	Specified Equipment	  	05/22/2013	  	31950949	  		  		
52.	  	UWW Holdings, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966138	  		  		
 
34

SCHEDULE 8.6
Affiliate Transactions
To be provided.

SCHEDULE 8.10
Holding Agreements
None.
 
36

EXHIBIT A TO
ABL CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto. Unless otherwise defined herein, terms defined in the ABL Credit Agreement and used herein shall have the meanings given to them in the ABL Credit Agreement.
                                  (the “ Assignor ”) and                                  (the “ Assignee ”) agree as follows:
 
1.	The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Transfer Effective Date (as defined below), an interest (the “ Assigned Interest ”) as set forth in Schedule 1 in and to the Assignor’s rights and obligations under the ABL Credit Agreement and the other Loan Documents with respect to those credit facilities provided for in the ABL Credit Agreement as are set forth on Schedule 1 (individually, an “ Assigned Facility ”; collectively, the “ Assigned Facilities ”), in a principal amount for each Assigned Facility as set forth on Schedule 1.	
 
2.	The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the ABL Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the ABL Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto, other than that it is the legal and beneficial owner of the Assigned Interest and that it has not created any adverse claim upon the interest being assigned by it hereunder and that such interest is free and clear of any such adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Parent Borrower, any of its Subsidiaries or any other obligor or the performance or observance by the Parent Borrower, any of its Subsidiaries or any other obligor of any of their respective obligations under the ABL Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto or thereto; and (c) attaches the Note(s), if any, held by it evidencing the Assigned Facilities [and requests that the Agent exchange such Note(s) for a new Note or Notes payable to the Assignee and (if the	
 
A-1

 	Assignor has retained any interest in the Assigned Facilities) a new Note or Notes payable to the Assignor in the respective amounts which reflect the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Transfer Effective Date) 1 ].	
 
3.	The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received a copy of the ABL Credit Agreement, together with copies of the financial statements referred to in subsection 7.1 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the ABL Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under the ABL Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Agent by the terms thereof, together with such powers as are incidental thereto; (e) hereby affirms the acknowledgements and representations of such Assignee as a Lender contained in subsection 10.6 of the ABL Credit Agreement; (f) agrees that it will be bound by the provisions of the ABL Credit Agreement and will perform in accordance with the terms of the ABL Credit Agreement all the obligations which by the terms of the ABL Credit Agreement are required to be performed by it as a Lender, including its obligations pursuant to subsection 11.16 of the ABL Credit Agreement, and, if it is organized under the laws of a jurisdiction outside the United States, its obligations pursuant to subsection 4.11(a)(1) of the ABL Credit Agreement; and (g) substantially contemporaneously with the effectiveness of this Assignment and Acceptance, agrees to execute a joinder to that certain Collateral Allocation Agreement, dated as of the Closing Date, among the Agent, the ABL Collateral Agent, the Swing Line Lender, each Issuing Lender and each Lender (as it may be amended, modified or supplemented from time to time).	
 
4.	The Assignor hereby assign and the Assignee hereby accepts all of the Assignor’s rights and obligations as party to the Base Intercreditor Agreement and the Assignee agrees (i) that its interest in the Loans and the other Obligations being assigned hereunder is subject to the terms of the Base Intercreditor Agreement and (ii) that such Assignee shall be deemed to be a party to the Base Intercreditor Agreement as if it was a signatory thereto.	
 
5.	Following the execution of this Assignment and Acceptance, it will be delivered to the Agent for acceptance by it and recording by the Agent pursuant to subsection 11.6 of the ABL Credit Agreement, effective as of             , 20[    ] (the “ Transfer Effective Date ”) (which shall not, unless otherwise agreed to by the Agent, be earlier than five Business Days after the date of such acceptance and recording by the Agent).	

1  	Should only be requested when specifically required by the Assignee and/or the Assignor, as the case may be.	
 
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6.	Upon such acceptance and recording, from and after the Transfer Effective Date, the Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the Transfer Effective Date or accrued subsequent to the Transfer Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Agent for periods prior to the Transfer Effective Date or with respect to the making of this assignment directly between themselves.	
 
7.	From and after the Transfer Effective Date, (a) the Assignee shall be a party to the ABL Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the other Loan Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the ABL Credit Agreement, but shall nevertheless continue to be entitled to the benefits (and bound by any related obligations) of subsections 4.10 , 4.11 , 4.12 , 11.5 and 11.16 and the obligations of subsection 4.13 thereof.	
 
8.	Notwithstanding any other provision hereof, if the consents of any of the Parent Borrower, the Swing Line Lender, each Issuing Lender and the Agent hereto are required under subsection 11.6 of the ABL Credit Agreement, this Assignment and Acceptance shall not be effective unless such consents shall have been obtained.	
 
9.	THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.	
 
10.	This Assignment and Acceptance may be executed in any number of counterparts (including by facsimile or other electronic transmission (i.e. a “pdf” or “tif”)) and by different parties on separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached the same document. Delivery of an executed counterpart of this Assignment and Acceptance by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance.	
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto.
 
A-3

SCHEDULE 1 to the
Assignment and Acceptance
Re: ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto.
Name of Assignor:
Name of Assignee:
Transfer Effective Date of Assignment:

Credit Facility Assigned 1	  	Aggregate Amount of
Commitment/Loans
under Credit Facility
for all Lenders	 	 	Amount of
Commitment/Loans
under Credit
Facility Assigned	 	
	  	 	        .	  	  	 	    	% 	 	$	            	  	

[NAME OF ASSIGNEE]	 		 	[NAME OF ASSIGNOR]	
					
By:	 	 	 		 	By:	 	 	
	 	Name:	 		 		 	Name:	
	 	Title:	 		 		 	Title:	

1  	Please specify Tranche A U.S. Facility Commitments, Tranche A-1 U.S. Facility Commitments, Tranche A Canadian Facility Commitments and/or Tranche A-1 Canadian Facility Commitments.	
 
A-1-4

			
Accepted for recording in the Register :	
	
BANK OF AMERICA, N.A.	
		
By:	 	 	
	 	Name:	
	 	Title:	

Consented To :	
	
[[UNISOURCE WORLDWIDE, INC.], as Parent Borrower] 2	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and U.S. Facility Issuing Lender	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
BANK OF AMERICA, N.A. (acting through its Canada branch), as Canadian Facility Issuing Lender	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[OTHER ISSUING LENDERS]	

2  	If required.	
 
A-1-5

EXHIBIT B TO
ABL CREDIT AGREEMENT
FORM OF JOINDER
ABL JOINDER AGREEMENT, dated as of [                    ] (this “ Agreement ”), among the Parent Borrower (as hereinafter defined), and certain operating subsidiaries of the Parent Borrower signatory hereto (each such subsidiary, a “ Joining Borrower ”) and consented to by the other Loan Parties (as hereinafter defined), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, for the banks and other financial institutions (the “ Lenders ”) from time to time parties to the ABL Credit Agreement (as hereinafter defined).
W I T N E S S E T H :
WHEREAS, the Parent Borrower and the Agent are parties to the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto.
WHEREAS, pursuant to the ABL Credit Agreement and in consideration of, among other things, the making available to each of the Joining Borrowers of an asset-based revolving credit facility under the ABL Credit Agreement, each of the Joining Borrowers wishes to become a party to the ABL Credit Agreement and assume all the rights, obligations, covenants, agreements, duties and liabilities of a “U.S. Borrower” thereunder and under or with respect to any Notes, any Letters of Credit and any of the other Loan Documents (in each case as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:
 
1.	Defined Terms . Unless otherwise defined herein, terms defined in the ABL Credit Agreement and used herein shall have the meanings given to them in the ABL Credit Agreement.	
 
2.	Joinder of Agreements and Obligations . Effective as of the date hereof, each of the Joining Borrowers hereby becomes a party to the ABL Credit Agreement and expressly assumes, confirms and agrees to perform and observe all of the indebtedness, obligations (including, without limitation, all obligations in respect of the Loans), covenants,	
 
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 	agreements, terms, conditions, duties and liabilities of a “U.S. Borrower” thereunder and under or with respect to, any Notes, any Letters of Credit and any of the other Loan Documents to which a U.S. Borrower is a party in its capacity as “U.S. Borrower” as fully as if each Joining Borrower were originally a signatory in the capacity of a “U.S. Borrower” thereto. At all times after the effectiveness of such joinder, all references to a “U.S. Borrower” in the ABL Credit Agreement, any Notes, any Letter of Credit or any of the other Loan Documents and any and all certificates and other documents executed by a U.S. Borrower in connection therewith shall be deemed to include references to each Joining Borrower, as more fully described in the ABL Credit Agreement.	
 
3.	Amendment to ABL Credit Agreement . The ABL Credit Agreement is hereby deemed to be amended to the extent, but only to the extent, necessary to effect the joinder provided for hereby. Except as expressly amended, modified and supplemented hereby, the provisions of the ABL Credit Agreement and the other Loan Documents are and shall remain in full force and effect.	
 
4.	Affirmation of Loan Documents . Each of the other Loan Parties signatory hereto hereby consents to the execution and delivery of this Agreement and confirms, reaffirms and restates its obligations under each of the Loan Documents to which it is a party pursuant to the terms hereof.	
 
5.	GOVERNING LAW . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.	
 
6.	Counterparts . This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Parent Borrower and the Agent.	
 
7.	Section Headings . The section headings in this Agreement are for convenience of reference only and are not to affect the construction hereof or to be taken into consideration in the interpretation hereof.	
 
8.	Severability . Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.	
 
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9.	Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.	
 
10.	WAIVERS OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.	
[The Remainder of This Page is Left Intentionally Blank]
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective proper and duly authorized officers as of the date first set forth above.

[UNISOURCE WORLDWIDE, INC.], as Parent Borrower	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[LOAN PARTIES], as Joining Borrower	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
BANK OF AMERICA, N.A., as Administrative Agent and ABL Collateral Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
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EXHIBIT C TO
ABL CREDIT AGREEMENT
FORM OF U.S. GUARANTEE AND COLLATERAL AGREEMENT
See Exhibit 10.6 to the Registration Statement on Form S-1; Registration No. 333-193950.
 
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EXHIBIT D-1 TO
ABL CREDIT AGREEMENT
FORM OF CANADIAN GUARANTEE AND COLLATERAL AGREEMENT
See Exhibit 10.11 to the Registration Statement on Form S-1; Registration No. 333-193950.
 
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EXHIBIT D-2 TO
ABL CREDIT AGREEMENT
FORM OF QUEBEC SECURITY DOCUMENTS
DEED OF HYPOTHEC
ON THE UNIVERSALITY OF MOVABLE PROPERTY

BETWEEN:	  	UNISOURCE CANADA, INC. , a corporation duly amalgamated under the laws of Canada, having its registered office and domicile at 6185 McLaughlin Road, Mississauga, Province of Ontario L5R 3W7,	
		
	  	(the “ Grantor ”)	
		
AND:	  	BANK OF AMERICA, N.A. , having an office at [335 Madison Avenue, New York, New York, 10017 U.S.A.], acting for its own benefit as Lender and as Administrative Agent, ABL Collateral Agent and solidary creditor for the benefit of the other present and future Secured Parties (as hereinafter defined) under the hereinafter defined Credit Agreement, and any successors thereto in such capacity	
		
	  	(including its successors and assigns, the “ Agent ”)	
WHO HAVE DECLARED AS FOLLOWS:
WHEREAS xpedx Intermediate, LLC, xpedx, LLC, the several Subsidiary Borrowers (as defined in the Credit Agreement (hereinafter defined)), the Grantor, as Canadian Borrower, the financial institutions listed on the signature pages thereto, as Lenders, the Agent and the other parties described therein have entered or will be entering into a credit agreement dated on or about July [ — ], 201 providing, inter alia , for credit facilities to be made available thereunder by the Lenders to the Borrowers (as defined in the Credit Agreement (hereinafter defined)), subject to the terms and conditions therein set forth (said credit agreement as same may be amended, restated, supplemented or otherwise modified from time to time, being hereinafter referred to as the “ Credit Agreement ”); all capitalized words and expressions used herein shall have the same meaning as ascribed thereto in the Credit Agreement, unless otherwise defined herein or unless the context otherwise requires;

DOCSMTL: 5625864\2	  	Deed of Hypothec – Unisource Canada, Inc. (2014)	  		

WHEREAS the Grantor has executed or will concurrently execute in favour of the Agent a Canadian Guarantee and Collateral Agreement governed by the laws of the Province of Ontario (as same may be amended, restated, supplemented or otherwise modified from time to time, the “ Canadian Guarantee and Collateral Agreement ”);
WHEREAS to secure the Obligations (as such expression is hereinafter defined), the Grantor has agreed to grant a hypothec on the Hypothecated Property (as such expression is hereinafter defined) in favour of the Agent, acting for the benefit of itself as a Canadian Lender and as Administrative Agent, ABL Collateral Agent and solidary creditor for the benefit of the Secured Parties (as defined in the Canadian Guarantee and Collateral Agreement), (hereinafter, collectively, the “ Secured Parties ” and each, a “ Secured Party ”);
WHEREAS pursuant to Section 10.1(b) of the Credit Agreement, the Agent, on one hand, and each Secured Party, on the other hand, have been or will be conferred the legal status of solidary creditors of each Loan Party in respect of all amounts, liabilities and other obligations owed by each Loan Party to the Agent and each such Secured Party, respectively, under the Credit Agreement and the other Loan Documents, the whole in accordance with Article 1541 of the Civil Code of Québec ;
AND WHEREAS the Agent, as solidary creditor for the benefit of the Secured Parties, has the authority to hold any and all Agent’s Liens over the Hypothecated Property (as hereinafter defined) for the payment and performance of all obligations to the Agent and the other Secured Parties of the Loan Parties arising under or in connection with the Credit Agreement and the other Loan Documents.
NOW THEREFORE, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
 
1.	SECURED OBLIGATIONS	
The hypothec constituted under this deed shall secure the following obligations (hereinafter collectively called the “ Obligations ”):
 
 	1.1	the Borrower Obligations (as such term is defined in the Canadian Guarantee and Collateral Agreement; and	
 
 	1.2	the strict performance and observance by the Grantor of all its agreements, warranties, representations, covenants, conditions and obligations (whether actual or contingent, whether now existing or hereafter arising, whether or not for the payment of money, and including, without limitation, any obligation or liability to pay damages) pursuant to or in connection with this deed.	
 
Deed of Hypothec – Unisource Canada, Inc. (2014)
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2.	HYPOTHEC	
 
 	2.1	Amount of Hypothec	
To secure the performance of the Obligations, the Grantor hereby hypothecates in favour of the Agent the property described in Section 2.2 hereof for the sum of three hundred million Canadian dollars (CDN$300,000,000) bearing interest at the rate of twenty percent (20%) per annum from the date hereof, compounded annually.
 
 	2.2	Description of Hypothecated Property	
The hypothec created by this deed charges the universality of all the Grantor’s movable property, present and future, corporeal and incorporeal, of whatsoever nature and kind and wheresoever situated, (hereinafter collectively called the “ Hypothecated Property ”), including, without limitation, all tools and equipment pertaining to the enterprises of the Grantor, all claims and customer accounts, all securities, securities accounts, all patents, trademarks, industrial designs and other intellectual property rights and all corporeal movables included in the assets of any of the Grantor’s enterprises kept for sale, lease or processing in the manufacture or transformation of property intended for sale, for lease or for use in providing a service.
 
 	2.3	Excluded Assets	
Notwithstanding the foregoing, the Agent hereby renounces to all rights and recourses of a hypothecary creditor, including, without limitation, the right to follow contemplated in Article 2700 of the Civil Code of Québec , with respect to any Excluded Assets (as defined in the Canadian Guarantee and Collateral Agreement).
 
 	2.4	Interpretation	
The parties hereto acknowledge and confirm as follows:
 
 	2.4.1	that the hypothec created on the Hypothecated Property pursuant to this deed is not and shall not be construed as a floating hypothec within the meaning of Articles 2715 et seq. of Civil Code of Québec ;	
 
 	2.4.2	that the hypothec constituted hereunder will remain in full force and effect for the full amount stipulated in Section 2.1 hereof until such time as an express written discharge is executed by the Agent and delivered to the Grantor. The hypothec, security and rights hereby created in favour of the Agent will not be extinguished, reduced, novated or otherwise affected by any payments made to or amounts received by the Agent or any other Secured Party, directly or	
 
Deed of Hypothec – Unisource Canada, Inc. (2014)
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 	indirectly, from the Grantor or any other party or as a result of any insurance indemnities arising from loss or damage to any of the Hypothecated Property or by reason of the collection of any claims hypothecated hereunder; and	
 
 	2.4.3	that should the Obligations at any time be fully extinguished without an express discharge of the hypothec created hereunder having been granted, and should any new Obligations arise, the security created hereunder will secure such new Obligations in the same manner and to the same extent as if there had never occurred an extinction of any of the Obligations and the Grantor is and shall remain obligated under the provisions hereof. The Grantor shall be deemed to have obligated itself for such new Obligations pursuant to the provisions hereof and the hypothec herein created shall secure such new Obligations as contemplated by Article 2797 of the Civil Code of Québec .	
 
3.	GRANTOR’S UNDERTAKINGS	
 
 	3.1	Alienation	
Unless the Agent gives its prior written consent or unless otherwise permitted under the Credit Agreement, the Grantor agrees not to alienate, lease or otherwise dispose of any of the Hypothecated Property.
 
 	3.2	Transformation	
The Grantor may not, without the Agent’s prior written consent or unless the Agent shall have received an acknowledgement (in form and substance satisfactory to the Agent) of its prior Lien, transform any of the movables forming part of the Hypothecated Property either by incorporating such movables into an immovable or by combining or mixing them with other movables so as to form new property, unless such immovable or new property are themselves subject or made subject to the hypothec hereby granted or to a Lien in favour of the Agent or unless such transformation is made in the ordinary course of operating an enterprise of the Grantor that is engaged in the business of manufacturing or transforming property. In no event, however, may the Grantor transform any such property where such transformation would result in the Agent’s security or rights hereunder, including in particular their rank, being diminished.
In the event of any such transformation, even without the Agent’s authorization, the Grantor (who shall not be relieved of the default resulting from the failure to obtain authorization) shall immediately inform the Agent of the details of such transformation and shall in particular provide the Agent with a description of the property thereby affected, the name and address of the owner of the property that may result therefrom and the address where such property is located.
 
 	3.3	[NOTE: Covenant removed. Covered in Canadian GCA and Credit Agreement.]	
 
Deed of Hypothec – Unisource Canada, Inc. (2014)
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4.	PROVISIONS APPLICABLE TO THE HYPOTHEC ON CLAIMS	
The following provisions apply to claims owed to the Grantor and hypothecated in favour of the Grantor, including present and future rents payable under current and future leases affecting all or part of the Hypothecated Property.
 
 	4.1	Collection	
Except for those claims consisting of securities pledged to the Agent, the Grantor shall have authority to collect payments of interest and repayments of capital made on the claims included in the Hypothecated Property hypothecated in favour of the Agent pursuant to this deed, as they fall due, the whole in accordance with the terms and conditions set forth in the Canadian guarantee and collateral agreement (governed by the laws of the Province of Ontario) entered into or to be entered into on or about the date hereof between the Grantor and the Agent, as said agreement may be amended, restated, supplemented or otherwise modified from time to time. The Agent may withdraw this authorization by written notice after an Event of Default has occurred and is continuing. At any time after the occurrence and during the continuance of an Event of Default, the Agent may set up this hypothec against the debtors of the hypothecated claims in accordance with the provisions of Article 2710 of the Civil Code of Québec . In such event, the Grantor undertakes to remit to the Agent, upon request, copies of all titles, documents, registers, invoices and accounts evidencing the claims or relating thereto, whatever the nature of their medium and whatever the form in which they are accessible, whether written, graphic, taped, filmed, computerized, or other.
Any payment received by the Grantor on account of any hypothecated claim after the Agent shall have withdrawn the foregoing authorization shall be received for the Agent’s account, shall not entitle the Grantor to the amounts collected and shall be kept separate from the Grantor’s other property at all times and remitted forthwith by the Grantor to the Agent without compensation.
Notwithstanding the provisions of Section 3.1 hereof, the Grantor is not, subject to the terms of the Credit Agreement, authorized (i)  to alienate any claim forming a part of a universality of claims hypothecated in favour of the Agent without the latter’s prior written consent and (ii)  to release, in whole or in part, any present or future security granted in favour of the Grantor securing any claims forming part of the Hypothecated Property where such claim has not been satisfied completely, without the prior written consent of the Agent.
 
Deed of Hypothec – Unisource Canada, Inc. (2014)
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 	4.2	Agent’s Rights	
The Agent shall not be obliged to exercise its rights to the hypothecated claims or to ensure their recovery from the debtors, whether by legal proceedings or otherwise. Should the Agent decide to collect the hypothecated claims after having withdrawn the authorization pursuant to Section 4.1, it shall be at liberty to negotiate such arrangements as it deems appropriate with the debtors or third parties, to enter into agreements with them with respect to the claims and any security securing the claims, and even to waive the claims and such security, the whole without the Grantor’s consent or intervention, and the Agent shall not thereby incur any liability toward or be accountable to the Grantor, except for its gross negligence, bad faith or wilful misconduct. Unless the Grantor so requests in writing, the Agent shall not be obliged to inform the Grantor of any irregularity in the payment of any amounts due on the claims. Apart from its obligation to remit to the Grantor any sums collected over and above the amount of the Obligations in principal, interest and costs, the Agent shall not be accountable to the Grantor with respect to the status of the collections made or any transactions and arrangements entered into, except as otherwise stated herein.
 
 	4.3	Information	
The Agent may, at its discretion, verify the existence and status of the claims at any time, provided however that prior to making any telephonic verifications, the Agent shall give notice thereof to the Grantor and the Grantor, at its option, may participate in such telephonic verifications. The Grantor shall provide the necessary assistance and information for this purpose and shall take such action in this respect as the Agent may reasonably request: in particular, it shall allow the Agent and its agents to at all reasonable times during normal business hours upon reasonable advance notice to the Grantor (and at any time during normal business hours and without advance notice when an Event of Default exits and is continuing) enter the premises occupied by the Grantor and to consult the Grantor’s accounting books and registers as well as any document relating to the claims and make copies thereof.
The Grantor specifically authorizes the Agent to communicate with any third party in order to obtain or transmit any personal information and any information relating to the claims and to the Grantor for the purpose of verifying and collecting the claims.
Until an Event of Default has occurred and is continuing, where the hypothec granted by this deed affects a claim in a minimum amount of US$500,000 that is itself secured by a registered hypothec, the Grantor shall inform the Agent accordingly and shall supply all the information that the Agent may request in this connection.
 
 	4.4	[NOTE: Covenant removed. Covered in Canadian GCA and Credit Agreement.]	
 
Deed of Hypothec – Unisource Canada, Inc. (2014)
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5.	PROVISIONS APPLICABLE TO THE HYPOTHEC ON SECURITIES	
 
 	5.1	Interpretation	
Unless otherwise indicated by the context, “ securities ” means any securities (as defined in the STA (hereinafter defined)), bills of exchange, notes, shares, warrants, bonds, debentures and other securities considered or acknowledged as securities, as well as the renewals, substitutions and additions to which they are subject and the securities and other property received or issued pursuant to any transformation of such securities, along with all income derived and all rights arising therefrom.
 
 	5.2	Delivery	
Forthwith upon demand by the Agent, the Grantor undertakes to deliver to the Agent, or to a mutually agreed upon third party, any and all securities at any time forming part of the Hypothecated Property, duly endorsed in blank for transfer, together with any power of attorney, document and confirmation that the Agent may reasonably require for such purpose.
The Grantor further undertakes to turn over to the Agent or to such third party, as soon as the Grantor becomes entitled thereto, the renewals, substitutions and additions to which such securities are subject and the securities and other property received or issued upon the purchase, redemption, conversion, cancellation or any other transformation thereof, along with any income derived and any rights arising therefrom, the same, where applicable, to be duly endorsed in blank for transfer and accompanied by any power of attorney, document and confirmation that the Agent may reasonably require for such purpose.
If any securities now or hereafter acquired by the Grantor are uncertificated and are issued to the Grantor or its nominee directly by the issuer thereof, the Grantor shall promptly notify the Agent thereof and, at the Agent’s request and option, pursuant to a control agreement (as such expression is contemplated in the Act Respecting the Transfer of Securities and the Establishment of Security Entitlements (Québec) (2008, c. 20) (as in effect from time to time or other similar legislation, the “ STA ”) and for the purposes hereof, a “ Control Agreement ”) in form and substance satisfactory to the Agent, either (i) cause the issuer to agree to comply, without further consent of the Grantor or such nominee, at any time upon
 
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the occurrence and during the continuance of an Event of Default, with instructions from the Agent as to such securities, or (ii) arrange for the Agent to become, at any time upon the occurrence and during the continuance of an Event of Default, the registered holder (as hypothecary creditor) of the securities.
If any securities, whether certificated or uncertificated, or other investment property or financial asset (as such term is defined in the STA) now or hereafter acquired by the Grantor are held by the Grantor or its nominee through a securities intermediary or commodity intermediary or other intermediary, the Grantor shall promptly notify the Agent thereof and, at the Agent’s request and option, pursuant to a Control Agreement in form and substance satisfactory to the Agent, either (i) cause such securities intermediary or (as the case may be) commodity intermediary to agree to, at any time upon the occurrence and during the continuance of an Event of Default, comply, in each case without further consent of the Grantor or such nominee, with entitlement orders from the Agent to such securities intermediary as to such securities or other investment property or financial asset, or (as the case may be) to apply any value distributed on account of any commodity contract as directed by the Agent to such commodity intermediary, or (ii) in the case of financial assets or other investment property held through a securities intermediary, arrange for the Agent to become, at any time upon the occurrence and during the continuance of an Event of Default, the entitlement holder (as hypothecary creditor) with respect to such financial asset or investment property, with the Grantor being permitted, only with the consent of the Agent, to exercise rights to withdraw or otherwise deal with such financial asset or investment property.
Notwithstanding anything to the contrary contained in this Section 5.2, once the Agent has made a request in respect of a financial asset or other investment property as provided herein, the Grantor shall take the actions requested by the Agent in respect of such financial asset or investment property and such arrangements shall remain in place unless and until this deed has been terminated pursuant to the terms hereof.
Subject to the Grantor’s right to receive a reasonable prior notice of the Agent’s exercise of its recourses, the Grantor hereby waives, in respect of any securities within the meaning of the STA hypothecated hereunder which are or are of a type dealt in or traded on securities exchanges or financial markets, the right it may have, by virtue of Articles 2757 to 2772 of the Civil Code of Québec , to receive a prior notice of the enforcement of the hypothecary remedies of the Agent and the Agent’s obligation to obtain the surrender of any such securities or to observe the time limits prescribed by such articles in connection with such enforcement following the occurrence and during the continuance of an Event of Default, the whole as contemplated by Article 2759 of the Civil Code of Québec . Notwithstanding the foregoing, prior to enforcing its hypothecary remedies, the Agent may not alienate or grant a movable hypothec in favour of a third person on the securities or security entitlements hypothecated hereunder.
 
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 	5.3	Voting, etc.	
Until the occurrence of an Event of Default which is continuing, the Grantor shall be entitled to vote any and all securities and to give consents, waivers or ratifications in respect thereof; provided that no vote shall be cast or any consent, waiver or ratification given or any action taken which would violate or be inconsistent with any of the terms of the Credit Agreement or this deed or any other instrument or agreement or document relating to the Obligations (including any Loan Document) or which would have the effect of materially impairing the position or interests of the Agent. All such rights of the Grantor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default shall occur and while such Event of Default continues whereupon the Agent shall be entitled, without limiting its other rights and remedies hereunder, to vote all or any part of the securities whether or not transferred in the Agent’s name and give all consents, waivers and ratifications in respect of the securities and otherwise act with respect thereto as though it were the outright owner thereof.
 
 	5.4	Standard of Care	
The Agent shall not be:
 
 	a)	obliged to protect a security, or take steps or institute proceedings to interrupt prescription or protect the securities against depreciation or devaluation or make them productive;	
 
 	b)	obliged to protect the Grantor against loss relating to a security; or	
 
 	c)	obliged to vote with respect to a security or subscription, conversion or other right pertaining thereto, or to any merger, amalgamation, consolidation, reorganization, receiving order, bankruptcy, insolvency proceedings, compromise or arrangement, or concerning the deposit of a security or otherwise, and shall not be obliged to participate in or take any action in relation to such matters, except where the Grantor has provided the Agent with written instructions to do so and where, in the Agent’s opinion, the security and the rights conferred hereunder would not be thereby diminished, and upon payment of such indemnity or remuneration as the Agent may require.	
 
 	5.5	Dividends and other Distributions	
Until the occurrence of an Event of Default which is continuing, the Grantor may collect all cash dividends payable in respect of the securities, provided that all cash dividends payable in respect of the securities which are determined by the
 
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Agent, acting reasonably, to represent in whole or in part an extraordinary, liquidating or other distribution in return of capital, shall be paid to the Agent and retained by it as part of the Hypothecated Property. The Agent shall be entitled to receive directly, and to retain as part of the Hypothecated Property:
 
 	(a)	all other or additional stock or securities or property (other than cash) paid or distributed by way of dividend in respect of the securities;	
 
 	(b)	all other or additional stock or other securities or property (including cash) paid or distributed in respect of the securities by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and	
 
 	(c)	all other or additional stock or other securities or property which may be paid in respect of the securities by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate reorganization or other disposition of securities.	
 
 	5.6	Rights of the Grantor on Securities	
After all Events of Default have been waived in accordance with the provisions of the Credit Agreement, and so long as the Obligations shall not have been accelerated, the Grantor shall have the right to exercise the voting and other consensual rights and powers that it would have otherwise been entitled to pursuant to (and subject to) Section 5.3 hereof and receive payments, proceeds, dividends, distributions, monies, compensation, property, assets, instruments or rights which it would be authorized to receive and retain pursuant to Section 5.4 hereof.
 
6.	POSSESSION OF PROPERTY	
This deed creates a hypothec without delivery notwithstanding the undertakings contained in Section 5.2 hereof.
 
7.	DEFAULT	
 
 	7.1	Events of Default	
The Grantor shall be considered in default upon the occurrence of any Event of Default (as such term is defined in the Credit Agreement and for the purposes hereof, an “ Event of Default ”).
 
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 	7.2	Effects	
Without limiting its right, at any time and at its discretion, to demand payment of any Obligations payable on demand and without prejudice to any rights and remedies which it has pursuant to agreements or any other Loan Documents with the Grantor or at law (in particular with respect to hypothecated claims), the Agent, upon the occurrence and during the continuance of any Event of Default, may demand immediate and full payment of the amounts owing on account of the Obligations, which shall forthwith become due and payable, and exercise, at its discretion, without restriction and without any prior notice other than such notices as are required by law, any rights and remedies which it has pursuant to this deed or at law, including, in particular, the following hypothecary rights:
 
 	•	 	taking of possession for purposes of administration;	
 
 	•	 	taking in payment;	
 
 	•	 	sale by the Agent;	
 
 	•	 	sale by judicial authority.	
 
 	7.3	Agent’s Rights	
Irrespective of the particular remedy exercised by the Agent in the event of the occurrence of any Event of Default, the following provisions shall apply after the occurrence and during the continuance of any Event of Default in addition to any provisions that may by law apply in the circumstances, the Grantor expressly agreeing thereto:
 
 	7.3.1	the Grantor undertakes to assemble and voluntarily surrender the Hypothecated Property to the Agent upon request, at such place or places as may be specified by the Agent, and agrees not to put any impediment in the way of, but rather to facilitate by all legal means, the exercise of the powers hereby granted to the Agent and not to interfere therewith; in addition, the Agent may, but shall not be obliged to, conduct a verification of the Hypothecated Property, assemble or move any of such property or take proceedings or do or take any act or action in relation to the Hypothecated Property that it may deem advisable, the whole at the Grantor’s expense;	
 
 	7.3.2	the Agent may, in addition, at its discretion and at the Grantor’s expense, whether after the Grantor has surrendered the Hypothecated Property and until the Agent has exercised the hypothecary right which it intends to exercise, or whether after the Agent has chosen to take possession of the Hypothecated Property for purposes of	
 
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 	administration, use or operate all or any part of the Hypothecated Property (without being obliged to make such property productive), change the destination of or alienate such property by onerous title (except for Hypothecated Property of little value) or charge such property with a hypothec or other real right, enter into or renew any leases for such amounts and on such terms and conditions as the Agent deems appropriate, make any repairs or renovations or undertake or complete any work;	
 
 	7.3.3	the Agent may, in the exercise of its rights, renounce any right belonging to the Grantor, even where no valuable consideration is received;	
 
 	7.3.4	the Agent shall not be bound to make an inventory, take out insurance or furnish other security to secure the performance of its obligations;	
 
 	7.3.5	the Agent may, at its discretion, take possession, through its officers, agents or mandataries, of all or any part of the Hypothecated Property, with full power to carry on, manage and conduct the Grantor’s business; the Agent may use the Hypothecated Property or any information that it obtains by reason of its administration for its own benefit;	
 
 	7.3.6	the Grantor, through its officers and directors, shall forthwith execute such documents and transfers as may be necessary to place the Agent in legal possession of the Hypothecated Property and the business of the Grantor in connection therewith, and thereupon all the powers, functions, rights and privileges of each and every one of the directors and officers of the Grantor shall cease and terminate with respect to the Hypothecated Property;	
 
 	7.3.7	the Agent shall not be obliged to render an account with respect to its actions in the exercise of its hypothecary rights, except as stipulated by law. Should the Agent see fit to render an account, it may do so in summary fashion;	
 
 	7.3.8	for the purpose of exercising any of its rights, the Agent may make use of any premises on which the Hypothecated Property is located, the whole at the Grantor’s expense;	
 
 	7.3.9	the Agent may, at its discretion, decide to sell and dispose of the Hypothecated Property as a whole or in separate parcels, by tender, public auction or private contract, on such date and on such terms and conditions as the Agent may stipulate, after giving such prior notices as are required by Articles 2784 and following of the Civil Code of	
 
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 	Québec , and the Agent may make such sale for cash or credit upon such reasonable conditions as to upset or reserve bid or price and as to terms of payment as it may deem proper, and may rescind or vary any contract of sale that may have been entered into and resell such property under any of the powers conferred by this deed, adjourn any such sale from time to time and execute and deliver to the purchaser or purchasers of the said property or any part thereof good and sufficient deed or deeds for the same, the Grantor hereby giving the Agent an irrevocable power of attorney for the purpose of making such sale and executing such deeds, and any such sale made as aforesaid shall be a perpetual bar in law and in equity against the Grantor and its assigns and against any other persons who may claim the said property or any part thereof from the Grantor or its assigns; and	
 
 	7.3.10	the Agent, or its agents or representatives, may become purchasers at any sale of the Hypothecated Property, whether made under the power of sale herein contained or pursuant to foreclosure or other legal proceedings.	
 
8.	MISCELLANEOUS PROVISIONS	
 
 	8.1	Nature of the Obligations	
Each of the Obligations of the Grantor is indivisible.
 
 	8.2	Nullity of a Provision	
In the event that any provision of this deed is declared null and void or is deemed not to have been written, the other provisions of this deed shall be severable from such provision and shall continue to have full force and effect.
 
 	8.3	Application of Payments	
Any insurance indemnity, as well as any other amount or other property received by the Agent in the exercise of the rights conferred upon it by this deed or by law or in any other manner with respect to any of the Hypothecated Property, may be retained by the Agent as Hypothecated Property or applied to the payment of the Obligations, whether or not they are due. Any amount collected by the Agent, even on account of the voluntary performance of the Obligations, shall be applied in accordance with the Credit Agreement.
Should any of the Hypothecated Property or its proceeds be in a currency different from that of the Obligations, the Agent is hereby authorized to convert the amount or the claim in question into the currency of the Obligations at the Agent’s rate of exchange for the currencies concerned on the date the payment is applied.
 
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 	8.4	Rights Cumulative and Exercise of Remedies	
The rights hereby created are in addition to and not in substitution for any other right or security held by the Agent, including without limitation, under any other Loan Document. The exercise by the Agent of any of its rights and remedies shall not prevent it from exercising any other right or remedy conferred upon it by this deed or any other security or by law.
The Agent may, separately or successively, exercise the rights conferred upon it by this deed on any part of the Hypothecated Property, without being obliged to do so on the entire Hypothecated Property and without prejudice to its rights and remedies with respect to the remaining Hypothecated Property, and it shall not be in any way obliged to exercise its rights and remedies against any other person liable for the Obligations or to realize any other security securing the Obligations.
The Agent may delegate the exercise of its rights or the performance of its obligations arising from this deed to another person and may in such case supply to such other person any information that it holds on the Grantor or on the Hypothecated Property.
 
 	8.5	Notice of Default	
The mere expiry of the time limit (including any grace period provided for in the Credit Agreement) for performing any of the Obligations shall serve to put the Grantor in default, without any notice or demand being required for that purpose.
 
 	8.6	Waivers	
The Grantor may not claim that an act or omission by the Agent constitutes or implies a waiver of its right to invoke a default by the Grantor or to assert a right arising out of such default, unless the Agent has expressly so stated after the occurrence of the default.
 
 	8.7	Power of Attorney	
The Grantor hereby grants to the Agent and each of its officers, agents, correspondents or mandataries, including any depositary, an irrevocable power of attorney with full powers of substitution and revocation, with effect (i) as and from the date hereof (a) during a Cash Dominion Period, to endorse the Grantor’s name on any checks, notes, acceptances, money orders or other forms of payment or security that come into the Agent’s possession and (b) to sign the Grantor’s name on any invoice, bill of lading, warehouse receipt or other negotiable or non-negotiable document constituting Hypothecated Property in which the Grantor has
 
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an interest, on drafts against customers, on assignments of accounts of the Grantor, on notices of assignment, financing statements or equivalent documents and other public records and to file any such financing statements or equivalent documents by electronic means with or without a signature as authorized or required by applicable law or filing procedure, and (ii) as and from the occurrence and continuance of an Event of Default, to do, make and execute, for the Grantor and in its name, all such deeds, documents, transfers, assignments, hypothecs, assurances, consents and things as the Agent, acting reasonably, may deem necessary or appropriate to be done, made or executed by the Grantor to protect the Agent’s rights hereunder and/or preserve the Hypothecated Property and to give effect to all the provisions of this deed and the documents and other acts, matters and things that the Grantor has agreed to do, make and execute or that may be required in the exercise of the powers conferred upon the Agent by this deed, and in particular, without limiting the generality of the foregoing, to endorse or transfer all or any part of the securities, if any, included in the Hypothecated Property over to the Agent or its officers, agents, correspondents or mandataries, including any depositary, so that the Agent or its officers, agents, correspondents or mandataries may be registered as registered holders (as hypothecary creditors) of such securities, and to obtain from any taxation authority at any time, if deemed useful, any information necessary to allow the Agent to determine the amount of the Grantor’s indebtedness to such taxation authorities. The Grantor also grants to each of such persons holding its power of attorney the right, acting reasonably, to use its name whenever they may deem it necessary or appropriate to do so for the purposes hereof.
 
 	8.8	Indemnification	
The Grantor hereby agrees and undertakes to indemnify the Agent and save and hold it harmless from and against any and all actual out-of-pocket losses, reasonable expenses, costs and liabilities (including reasonable legal fees and disbursements) that the Agent or any of its mandataries or persons holding its power of attorney may sustain or incur in the exercise of the powers and rights conferred upon the Agent hereunder, except to the extent such losses or expenses are attributable to the gross negligence, bad faith or wilful misconduct of the Agent, any of its mandataries or persons holding its power of attorney as determined by a final decision of a court of competent jurisdiction.
 
 	8.9	Notices	
Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any party by any other party, or whenever any party desires to give and serve upon any other party any communication with respect to this deed, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be given in the manner, and deemed received, as provided for in the Credit Agreement.
 
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 	8.10	Interpretation	
References herein to gender shall include all genders and the singular shall include the plural and vice versa, as required by the context.
 
 	8.11	Further Assurances	
The Grantor hereby agrees to do, make and execute, at its own expense, all such deeds, documents and things as may be necessary or advisable, in the opinion of the Agent’s legal counsel, acting reasonably, to give effect to the provisions of this deed, including without limiting the generality of the foregoing, in order that a valid and enforceable hypothec be created and maintained on any property forming part of the Hypothecated Property as of the execution of this deed or at any time in the future.
The Agent hereby agrees to do, make and execute, at the expense of the Grantor, all such documents or forms as may be necessary, in the opinion of the Agent’s legal counsel, acting reasonably, to duly reduce the scope of the hypothec created hereunder so as to exclude from the Hypothecated Property any Excluded Assets (provided that such reduction shall only be granted to the extent the Grantor is prohibited from granting a hypothec or security interest under the terms of the relevant debt and only for so long as such debt remains outstanding).
 
 	8.12	Divisions and Titles	
The division of this deed into sections, sections and subsections and the insertion of titles are for ease of reference only and shall not influence its meaning or construction.
 
 	8.13	Applicable Law	
This deed shall be governed and construed in accordance with the laws in force in the Province of Québec. It must also be interpreted so that any Hypothecated Property located in another jurisdiction be affected by a valid security under the applicable law of such other jurisdiction.
 
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 	8.14	Explanation of Contract	
The Grantor confirms that the Agent has provided it with adequate explanations concerning the nature and scope of this deed and that it has had an opportunity to consult a lawyer, notary or other adviser in connection therewith.
 
 	8.15	Precedence	
In the event that any provisions of this deed contradict and are otherwise incapable of being construed in conjunction with the provisions of the Credit Agreement, the provisions of the Credit Agreement shall take precedence over those contained in this deed. Notwithstanding the foregoing, in the event that granting of security interest provisions in the Credit Agreement contradict and are otherwise incapable of being construed in conjunction with the provisions of this deed, such provisions of this deed shall take precedence over those contained in the Credit Agreement.
 
 	8.16	Counterparts	
This deed may be executed in any number of counterparts, each of which when executed and delivered is an original but all of which taken together constitute one and the same instrument; any party may execute this deed by signing any counterpart of it.
 
 	8.17	Language	
The parties hereto confirm that it is their wish that this deed and all documents relating thereto, including notices, be drawn up in the English language. Les parties aux présentes confirment leur volonté que cet acte de même que tous documents, y compris tous avis, s’y rapportant soient rédigés en langue anglaise.
[Signature page follows]
 
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IN WITNESS WHEREOF, the parties hereto have executed this deed on the      day of         , 2014.

UNISOURCE CANADA, INC.	
		
By:	 	 	
		
Name:	 		
Title:	 		
	
BANK OF AMERICA, N.A., as Agent	
		
By:	 	 	
		
Name:	 		
Title:	 		
 
Deed of Hypothec – Unisource Canada, Inc. (2014)

EXHIBIT E
to
CREDIT AGREEMENT

 
[FORM OF]
INTERCREDITOR AGREEMENT
by and between
BANK OF AMERICA, N.A.,
as ABL Agent,
and
[                    ],
as [Cash Flow] 1 Agent
Dated as of [                    ]

 

1  	Conform “Cash Flow” to an appropriate descriptor (e.g., “Term Loan”), if needed.	

Table of Contents

 	  	 	  	Page	 	
		
ARTICLE 1 Definitions	  	 	2	  	
			
Section 1.1	  	UCC Definitions.	  	 	2	  	
Section 1.2	  	Other Definitions.	  	 	2	  	
Section 1.3	  	Rules of Construction.	  	 	36	  	
		
ARTICLE 2 Lien Priority	  	 	37	  	
			
Section 2.1	  	Agreement to Subordinate.	  	 	37	  	
Section 2.2	  	Waiver of Right to Contest Liens.	  	 	43	  	
Section 2.3	  	Remedies Standstill.	  	 	51	  	
Section 2.4	  	Exercise of Rights.	  	 	64	  	
Section 2.5	  	No New Liens.	  	 	73	  	
Section 2.6	  	Waiver of Marshalling.	  	 	79	  	
		
ARTICLE 3 Actions of the Parties	  	 	80	  	
			
Section 3.1	  	Certain Actions Permitted.	  	 	80	  	
Section 3.2	  	Agent for Perfection.	  	 	80	  	
Section 3.3	  	Sharing of Information and Access.	  	 	81	  	
Section 3.4	  	Insurance.	  	 	82	  	
Section 3.5	  	No Additional Rights for the Credit Parties Hereunder.	  	 	83	  	
Section 3.6	  	Actions upon Breach.	  	 	83	  	
Section 3.7	  	Inspection Rights.	  	 	83	  	
		
ARTICLE 4 Application of Proceeds	  	 	85	  	
			
Section 4.1	  	Application of Proceeds.	  	 	85	  	
Section 4.2	  	Specific Performance.	  	 	91	  	
Section 4.3	  	Sale of Collateral Comprising Both ABL Priority Collateral and [Cash Flow] Priority Collateral; Certain Proceeds of Capital Stock or Intercompany Loans.	  	 	91	  	
		
ARTICLE 5 Intercreditor Acknowledgements and Waivers	  	 	92	  	
			
Section 5.1	  	Notice of Acceptance and Other Waivers.	  	 	92	  	
Section 5.2	  	Modifications to ABL Documents and [Cash Flow] Documents.	  	 	98	  	
Section 5.3	  	Reinstatement and Continuation of Agreement.	  	 	105	  	
		
ARTICLE 6 Insolvency Proceedings	  	 	107	  	
			
Section 6.1	  	DIP Financing.	  	 	107	  	
Section 6.2	  	Relief from Stay.	  	 	110	  	
Section 6.3	  	No Contest.	  	 	110	  	
 
i

Table of Contents
(continued)

 	  	 	  	Page	 	
			
Section 6.4	  	Asset Sales.	  	 	112	  	
Section 6.5	  	Separate Grants of Security and Separate Classification.	  	 	112	  	
Section 6.6	  	Enforceability.	  	 	113	  	
Section 6.7	  	ABL Obligations Unconditional.	  	 	113	  	
Section 6.8	  	[Cash Flow] Obligations Unconditional.	  	 	114	  	
Section 6.9	  	Additional Obligations Unconditional.	  	 	114	  	
Section 6.10	  	Adequate Protection.	  	 	115	  	
		
ARTICLE 7 Miscellaneous	  	 	117	  	
			
Section 7.1	  	Rights of Subrogation.	  	 	117	  	
Section 7.2	  	Further Assurances.	  	 	120	  	
Section 7.3	  	Representations.	  	 	120	  	
Section 7.4	  	Amendments.	  	 	120	  	
Section 7.5	  	Addresses for Notices.	  	 	125	  	
Section 7.6	  	No Waiver, Remedies.	  	 	125	  	
Section 7.7	  	Continuing Agreement, Transfer of Secured Obligations.	  	 	125	  	
Section 7.8	  	Governing Law; Entire Agreement.	  	 	126	  	
Section 7.9	  	Counterparts.	  	 	126	  	
Section 7.10	  	No Third Party Beneficiaries.	  	 	126	  	
Section 7.11	  	Designation of Additional Indebtedness; Joinder of Additional Agents.	  	 	126	  	
Section 7.12	  	[Cash Flow] Collateral Representative and ABL Collateral Representative; Notice of Change.	  	 	128	  	
Section 7.13	  	Provisions Solely to Define Relative Rights.	  	 	129	  	
Section 7.14	  	Severability.	  	 	129	  	
Section 7.15	  	Attorneys’ Fees.	  	 	129	  	
Section 7.16	  	VENUE; JURY TRIAL WAIVER.	  	 	129	  	
Section 7.17	  	Intercreditor Agreement.	  	 	130	  	
Section 7.18	  	No Warranties or Liability.	  	 	130	  	
Section 7.19	  	Conflicts.	  	 	131	  	
Section 7.20	  	Information Concerning Financial Condition of the Credit Parties.	  	 	131	  	
Section 7.21	  	Excluded Assets.	  	 	131	  	
EXHIBITS

Exhibit A	 	—	  	Additional Indebtedness Designation	
Exhibit B	 	—	  	Additional Indebtedness Joinder	
Exhibit C	 	—	  	Joinder of ABL Credit Agreement or [Cash Flow] Credit Agreement or Additional Credit Facility	
 
ii

INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (as amended, supplemented, waived or otherwise modified from time to time pursuant to the terms hereof, this “ Agreement ”) is entered into as of [                    ] between BANK OF AMERICA, N.A., as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined herein, the “ ABL Agent ”) for the ABL Secured Parties and [            ], as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined herein, the “ [Cash Flow] Agent ”) for the [Cash Flow] Secured Parties. Capitalized terms defined in Article 1 hereof are used in this Agreement as so defined.
RECITALS
A. Pursuant to the Original ABL Credit Agreement, the ABL Credit Agreement Lenders have agreed to make certain loans and other financial accommodations to or for the benefit of the ABL Borrowers.
B. Pursuant to the ABL Guarantees, the ABL Guarantors have agreed to guarantee the payment and performance of the ABL Borrowers’ obligations under the ABL Documents.
C. As a condition to the effectiveness of the Original ABL Credit Agreement and to secure the obligations of the ABL Credit Parties under and in connection with the ABL Documents, the ABL Credit Parties have granted to the ABL Agent (for the benefit of the ABL Secured Parties) Liens on the Collateral.
D. Pursuant to the Original [Cash Flow] Credit Agreement, the [Cash Flow] Credit Agreement Lenders have agreed to make certain loans and other financial accommodations to or for the benefit of the [Cash Flow] Borrowers.
E. Pursuant to the [Cash Flow] Guarantees, the [Cash Flow] Guarantors have agreed to guarantee the payment and performance of the [Cash Flow] Borrowers’ obligations under the [Cash Flow] Documents.
F. As a condition to the effectiveness of the Original [Cash Flow] Credit Agreement and to secure the obligations of the [Cash Flow] Credit Parties under and in connection with the [Cash Flow] Documents, the [Cash Flow] Credit Parties have granted to the [Cash Flow] Agent (for the benefit of the [Cash Flow] Secured Parties) Liens on the Collateral.
G. Pursuant to this Agreement, the Company Representative may, from time to time, designate certain additional Indebtedness of any Credit Party as “Additional Indebtedness” (and as either “Additional ABL Indebtedness” or “Additional [Cash Flow] Indebtedness”, as the case may be) by executing and delivering the Additional Indebtedness Designation and by complying with the procedures set forth in Section 7.11 hereof, and the holders of such Additional Indebtedness and any other applicable Additional Secured Party shall thereafter constitute Additional Secured Parties (and either “Additional ABL Secured Parties” or “Additional [Cash Flow] Secured Parties”, as the case may be), and any Additional Agent for any such Additional Secured Parties shall thereafter constitute an Additional Agent (and either an “Additional ABL Agent” or an “Additional [Cash Flow] Agent”, as the case may be), for all purposes under this Agreement.

H. Each of the ABL Agent (on behalf of the ABL Secured Parties) and the [Cash Flow] Agent (on behalf of the [Cash Flow] Secured Parties) and, by their acknowledgment hereof, the ABL Credit Parties and the [Cash Flow] Credit Parties, desire to agree to the relative priority of Liens on the Collateral and certain other rights, priorities and interests as provided herein.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 UCC Definitions . The following terms which are defined in the Uniform Commercial Code are used herein as so defined: Accounts, Chattel Paper, Commercial Tort Claims, Commodity Accounts, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Financial Assets, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Money, Payment Intangibles, Promissory Notes, Records, Security, Securities Accounts, Security Entitlements, Supporting Obligations and Tangible Chattel Paper.
Section 1.2 Other Definitions . As used in this Agreement, the following terms shall have the meanings set forth below:
“ ABL Agent ” means Bank of America, N.A., as collateral agent under the ABL Credit Agreement, together with its successors and assigns in such capacity from time to time, whether under the Original ABL Credit Agreement or any subsequent ABL Credit Agreement, as well as any Person designated as the “Agent” or “Collateral Agent” under any ABL Credit Agreement.
“ ABL Amount ” shall have the meaning set forth in Section 4.3 .
“ ABL Bank Products Affiliate ” means any Person who ( a ) has entered into a Bank Products Agreement with an ABL Credit Party with the obligations of such ABL Credit Party thereunder being secured by one or more ABL Collateral Documents, ( b ) was an ABL Agent, an ABL Credit Agreement Lender or an Affiliate of an ABL Agent or an ABL Credit Agreement Lender on [ — ], 2014, or at the time of entry into such Bank Products Agreement, or at the time of the designation referred to in the following clause (c), and ( c ) has been designated by the Company Representative in accordance with the terms of one or more ABL Collateral Documents ( provided that no Person shall, with respect to any Bank Products Agreement, be at any time a Bank Products Affiliate hereunder with respect to more than one Credit Facility).
 
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“ ABL Borrowers ” means Unisource Worldwide, Inc. (as successor by merger to xpedx Intermediate, LLC) and certain of its Subsidiaries, in their capacities as borrowers under the ABL Credit Agreement, together with its and their respective successors and assigns.
“ ABL Canadian Collateral ” means Property owned by any Canadian Subsidiary of the Company and pledged to any ABL Secured Party under any ABL Collateral Document.
“ ABL Collateral Documents ” means all “Security Documents” as defined in the Original ABL Credit Agreement, and all other security agreements, mortgages, deeds of trust, pledges and other collateral documents executed and delivered in connection with any ABL Credit Agreement, and any other agreement, document or instrument pursuant to which a Lien is granted securing any ABL Obligations or under which rights or remedies with respect to such Liens are governed, in each case as the same may be amended, supplemented, waived or modified from time to time.
“ ABL Collateral Exposure ” means, as to any ABL Credit Agreement or Additional ABL Credit Facility as of the date of determination, the sum of (a) as to any revolving facility, the total commitments (whether funded or unfunded) of the ABL Secured Parties to make loans and other extensions of credit thereunder (or after the termination of such commitments, the total outstanding principal amount of loans and other extensions of credit under such facility) plus (b) as to any other facility, the outstanding principal amount of ABL Obligations or Additional ABL Obligations (as applicable) thereunder.
“ ABL Collateral Obligations ” means the ABL Obligations and any Additional ABL Obligations.
“ ABL Collateral Representative ” means ( a ) if the Original ABL Credit Agreement is then in effect, the ABL Agent acting for the ABL Collateral Secured Parties; and ( b ) if the Original ABL Credit Agreement is not then in effect, the ABL Agent under the relevant subsequent ABL Credit Agreement acting for the ABL Collateral Secured Parties, unless the ABL Collateral Exposure under any Additional ABL Credit Facility exceeds the ABL Collateral Exposure under such subsequent ABL Credit Agreement, and in such case (unless otherwise agreed in writing between the ABL Agent and any Additional ABL Agent or, after the Discharge of ABL Obligations, between any Additional ABL Agents), the Additional ABL Agent under such Additional ABL Credit Facility (or, if there is more than one such Additional ABL Credit Facility, the Additional ABL Credit Facility under which the greatest ABL Collateral Exposure is outstanding at the time) acting for the ABL Collateral Secured Parties.
“ ABL Collateral Secured Parties ” means the ABL Secured Parties and any Additional ABL Secured Parties.
“ ABL Commingled Collateral ” shall have the meaning set forth in Section 3.7(a) hereof.
“ ABL Credit Agreement ” means ( i ) if the Original ABL Credit Agreement is then in effect, the Original ABL Credit Agreement and ( ii ) thereafter, if designated by the Company Representative, any other credit agreement, loan agreement, note agreement, promissory note, indenture, guarantee or other agreement or instrument evidencing or governing the terms of any
 
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indebtedness or other financial accommodation that complies with clause (1) of the definition of “Additional Indebtedness” and has been incurred to refund, refinance, restructure, replace, renew, repay, increase or extend (whether in whole or in part and whether with the original agent and creditors or other agents and creditors or otherwise) the indebtedness and other obligations outstanding under ( x ) the Original ABL Credit Agreement or ( y ) any subsequent ABL Credit Agreement (in each case, as amended, supplemented, waived or otherwise modified from time to time); provided that the requisite creditors party to such ABL Credit Agreement (or their agent or other representative on their behalf) shall agree, by a joinder agreement substantially in the form of Exhibit C attached hereto or otherwise in form and substance reasonably satisfactory to the [Cash Flow] Agent and any Additional Agent (other than any Designated Agent) (or, if there is no continuing Agent other than any Designated Agent, as designated by the Company Representative), that the obligations under such ABL Credit Agreement are subject to the terms and provisions of this Agreement. Any reference to the ABL Credit Agreement shall be deemed a reference to any ABL Credit Agreement then in existence.
“ ABL Credit Agreement Lenders ” means the lenders, debtholders and other creditors party from time to time to the ABL Credit Agreement, together with their successors, assigns and transferees, as well as any Person designated as an “ABL Credit Agreement Lender” under any ABL Credit Agreement.
“ ABL Credit Parties ” means the ABL Borrowers, the ABL Guarantors and each other direct or indirect Subsidiary of the Company or any of its Affiliates that is now or hereafter becomes a party to any ABL Document.
“ ABL Documents ” means the ABL Credit Agreement, the ABL Guarantees, the ABL Collateral Documents, any Bank Products Agreements between any ABL Credit Party and any ABL Bank Products Affiliate, any Hedging Agreements between any ABL Credit Party and any ABL Hedging Affiliate, any Management Guarantee in favor of an ABL Management Credit Provider, and those other ancillary agreements as to which the ABL Agent or any ABL Secured Party is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any ABL Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to the ABL Agent, in connection with any of the foregoing or any ABL Credit Agreement, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ ABL Guarantees ” means that certain guarantee agreement dated as of [ — ], 2014 by the ABL Guarantors in favor of the ABL Agent, and all other guarantees of any ABL Obligations of any ABL Credit Party by any other ABL Credit Party in favor of any ABL Secured Party, in each case as amended, supplemented, waived or otherwise modified from time to time.
“ ABL Guarantors ” means the collective reference to Holdings (so long as it is a guarantor under any of the ABL Guarantees), each of the Company’s Subsidiaries that is a guarantor under any of the ABL Guarantees and any other Person who becomes a guarantor under any of the ABL Guarantees.
 
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“ ABL Hedging Affiliate ” means any Person who ( a ) has entered into a Hedging Agreement with an ABL Credit Party with the obligations of such ABL Credit Party thereunder being secured by one or more ABL Collateral Documents, ( b ) was the ABL Agent or an ABL Credit Agreement Lender or an Affiliate of an ABL Agent or an ABL Credit Agreement Lender on [ — ], 2014, or at the time of entry into such Hedging Agreement, or at the time of the designation referred to in the following clause (c), and ( c ) has been designated by the Company Representative in accordance with the terms of one or more ABL Collateral Documents ( provided that no Person shall, with respect to any Hedging Agreement, be at any time a Hedging Affiliate hereunder with respect to more than one Credit Facility).
“ ABL Management Credit Provider ” means any Person who ( a ) is a beneficiary of a Management Guarantee provided by an ABL Credit Party, with the obligations of the applicable ABL Credit Party thereunder being secured by one or more ABL Collateral Documents, ( b ) was the ABL Agent or an ABL Credit Agreement Lender or an Affiliate of an ABL Agent or an ABL Credit Agreement Lender on [ — ], 2014, or at the time of entry into such Management Guarantee or at the time of designation referred to in the following clause (c), and ( c ) has been designated by the Company Representative in accordance the terms of one or more ABL Collateral Documents ( provided that no Person shall, with respect to any Management Guarantee, be at any time a Management Credit Provider with respect to more than one Credit Facility).
“ ABL Obligations ” means any and all loans and all other obligations, liabilities and indebtedness of every kind, nature and description, whether now existing or hereafter arising, whether arising before, during or after the commencement of any case with respect to any ABL Credit Party under the Bankruptcy Code or any other Insolvency Proceeding, owing by each ABL Credit Party from time to time to the ABL Agent, the “administrative agent” or “agent” under the ABL Credit Agreement, the ABL Secured Parties or any of them, including any ABL Bank Products Affiliates, any ABL Hedging Affiliates or any ABL Management Credit Providers, under any ABL Document, whether for principal, interest (including interest and fees which, but for the filing of a petition in bankruptcy with respect to such ABL Credit Party, would have accrued on any ABL Obligation, whether or not a claim is allowed against such ABL Credit Party for such interest and fees in the related bankruptcy proceeding), reimbursement of amounts drawn under letters of credit, payments for early termination of Hedging Agreements, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the ABL Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
“ ABL Permitted Access Right ” shall have the meaning set forth in Section 3.7(a) .
“ ABL Priority Collateral ” means all Collateral consisting of the following:
(1) all Accounts (other than Accounts which constitute identifiable Proceeds of [Cash Flow] Priority Collateral);
(2) ( x ) all Deposit Accounts and Money and all cash, checks, other negotiable instruments, funds and other evidences of payments held therein and ( y ) all Securities, Security Entitlements, and Securities Accounts, in each case, to the extent constituting cash or Cash
 
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Equivalents or representing a claim to Cash Equivalents, in each case other than ( i ) the Asset Sales Proceeds Account and all cash, checks and other property held therein or credited thereto, excluding the Asset Sales Proceeds Account, ( ii ) Capital Stock of direct and indirect Subsidiaries of Holdings and ( iii ) identifiable Proceeds of [Cash Flow] Priority Collateral;
(3) all Inventory;
(4) to the extent involving or governing any of the items referred to in the preceding clauses (1) through (3), all Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper), all Documents, General Intangibles (including data processing software and excluding Intellectual Property and Capital Stock of direct and indirect Subsidiaries of Holdings), Instruments (including Promissory Notes), Letter-of-Credit Rights and Commercial Tort Claims, provided that to the extent any of the foregoing also relates to [Cash Flow] Priority Collateral, only that portion related to the items referred to in the preceding clauses (1) through (3) shall be included in the ABL Priority Collateral;
(5) to the extent evidencing or governing any of the items referred to in the preceding clauses (1) through (4), all Supporting Obligations, provided that, to the extent any of the foregoing also relates to [Cash Flow] Priority Collateral, only that portion related to the items referred to in the preceding clauses (1) through (4) shall be included in the ABL Priority Collateral;
(6) all books and Records relating to the foregoing (including all books, databases, customer lists, and Records, whether tangible or electronic, which contain any information relating to any of the foregoing); and
(7) all collateral security and guarantees with respect to any of the foregoing and all cash, Money, instruments, securities (other than Capital Stock of direct and indirect Subsidiaries of Holdings), financial assets, Investment Property (other than Capital Stock of direct and indirect Subsidiaries of Holdings), insurance proceeds (including proceeds of business interruption insurance) and deposit accounts directly received as Proceeds of any ABL Priority Collateral described in the preceding clauses (1) through (4) (such Proceeds, “ ABL Priority Proceeds ”); provided , however , that no Proceeds of ABL Priority Proceeds will constitute ABL Priority Collateral unless such Proceeds of ABL Priority Proceeds would otherwise constitute ABL Priority Collateral.
For the avoidance of doubt, under no circumstances shall Excluded Assets (as defined in the next succeeding sentence) be ABL Priority Collateral.
As used in this definition of “ABL Priority Collateral”, the term “Excluded Assets” shall have the meaning provided in the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect) or in the ABL Collateral Documents relating thereto, or in any other ABL Credit Agreement then in effect (if the Original ABL Credit Agreement is not then in effect) or in the ABL Collateral Documents relating thereto, or in any other Additional ABL Credit Facility then in effect (if no ABL Credit Agreement is then in effect), which Additional ABL Credit Facility is designated as applicable for purposes of this definition or in the Additional ABL Collateral Documents relating thereto.
 
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“ ABL Priority Collateral Documents ” means the ABL Documents and any Additional ABL Documents, as applicable.
“ ABL Priority Proceeds ” shall have the meaning set forth in the definition of “ABL Priority Collateral”.
“ ABL Recovery ” shall have the meaning set forth in Section 5.3(a) .
“ ABL Secured Parties ” means the ABL Agent, all ABL Credit Agreement Lenders, all ABL Bank Products Affiliates, all ABL Hedging Affiliates and all ABL Management Credit Providers, and all successors, assigns, transferees and replacements thereof, as well as any Person designated as an “ABL Secured Party” under any ABL Credit Agreement.
“ Accounts Amount ” shall have the meaning set forth in Section 4.3 .
“ Additional ABL Agent ” means any one or more administrative agents, collateral agents, security agents, trustees or other representatives for or of any one or more Additional ABL Secured Parties, and shall include any successor thereto, as well as any Person designated as an “Agent” under any Additional ABL Credit Facility.
“ Additional ABL Bank Products Affiliate ” means any Person who ( a ) has entered into a Bank Products Agreement with an Additional ABL Credit Party with the obligations of such Additional ABL Credit Party thereunder being secured by one or more Additional ABL Collateral Documents, ( b ) was an Additional ABL Agent or an Additional ABL Credit Facility Lender or an Affiliate of an Additional ABL Agent or an Additional ABL Credit Facility Lender, in each case, on the date the applicable Additional ABL Credit Facility became effective or at the time of entry into such Bank Products Agreement, or at the time of the designation referred to in the following clause (c), and ( c ) has been designated by the Company Representative in accordance with the terms of one or more Additional ABL Collateral Documents ( provided that no Person shall, with respect to any Bank Products Agreement, be at any time a Bank Products Affiliate hereunder with respect to more than one Credit Facility).
“ Additional ABL Bank Products Provider ” means any Person (other than an Additional ABL Bank Products Affiliate) that has entered into a Bank Products Agreement with an Additional ABL Credit Party with the obligations of such Additional ABL Credit Party thereunder being secured by one or more Additional ABL Collateral Documents, as designated by the Company Representative in accordance with the terms of one or more Additional ABL Collateral Documents ( provided that no Person shall, with respect to any Bank Products Agreement, be at any time a Bank Products Provider hereunder with respect to more than one Credit Facility).
“ Additional ABL Collateral Documents ” means all “Security Documents” as defined in any Additional ABL Credit Facility, and in any event shall include all security agreements, mortgages, deeds of trust, pledges and other collateral documents executed and delivered in connection with any Additional ABL Credit Facility, and any other agreement, document or instrument pursuant to which a Lien is granted securing any Additional ABL Obligations or under which rights or remedies with respect to such Liens are governed, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
 
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“ Additional ABL Credit Facilities ” means ( a ) any one or more agreements, instruments and documents under which any Additional ABL Indebtedness is or may be incurred, including any credit agreements, loan agreements, note agreements, promissory notes, indentures, guarantees or other agreements or instruments evidencing or governing the terms of any indebtedness or other financial accommodation, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, together with ( b ) if designated by the Company Representative, any other agreement (including any credit agreement, loan agreement, note agreement, promissory note, indenture, guarantee or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation) extending the maturity of, consolidating, restructuring, refunding, replacing or refinancing all or any portion of the Additional ABL Obligations, whether by the same or any other lender, debtholder or other creditor or group of lenders, debtholders or other creditors, or the same or any other agent, trustee or representative therefor, or otherwise, and whether or not increasing the amount of any Indebtedness that may be incurred thereunder.
“ Additional ABL Credit Facility Lenders ” means one or more holders of Additional ABL Indebtedness (or commitments therefor) that is or may be incurred under one or more Additional ABL Credit Facilities, together with their successors, assigns and transferees, as well as any Person designated as an “Additional ABL Credit Facility Lender” under any Additional ABL Credit Facility.
“ Additional ABL Credit Party ” means the Company, Holdings (so long as it is a guarantor under any of the Additional ABL Guarantees), each direct or indirect Subsidiary of the Company or any of its Affiliates that is or becomes a party to any Additional ABL Document, and any other Person who becomes a guarantor under any of the Additional ABL Guarantees.
“ Additional ABL Documents ” means any Additional ABL Credit Facilities, any Additional ABL Guarantees, any Additional ABL Collateral Documents, any Bank Products Agreements between any Additional ABL Credit Party and any Additional ABL Bank Products Affiliate or Additional ABL Bank Products Provider, any Hedging Agreements between any Additional ABL Credit Party and any Additional ABL Hedging Affiliate or Additional ABL Hedging Provider, any Management Guarantee in favor of any Additional ABL Management Credit Provider, those other ancillary agreements as to which any Additional ABL Secured Party is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Additional ABL Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to any Additional ABL Agent, in connection with any of the foregoing or any Additional ABL Credit Facility, including any intercreditor or joinder agreement among any of the Additional ABL Secured Parties or among any of the ABL Secured Parties and Additional ABL Secured Parties, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Additional ABL Guarantees ” means any one or more guarantees of any Additional ABL Obligations of any Additional ABL Credit Party by any other Additional ABL Credit Party in favor of any Additional ABL Secured Party, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
 
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“ Additional ABL Hedging Affiliate ” means any Person who ( a ) has entered into a Hedging Agreement with an Additional ABL Credit Party with the obligations of such Additional ABL Credit Party thereunder being secured by one or more Additional ABL Collateral Documents, ( b ) was an Additional ABL Agent or an Additional ABL Credit Facility Lender or an Affiliate of an Additional ABL Agent or an Additional ABL Credit Facility Lender, in each case, on the date the applicable Additional ABL Credit Facility became effective or at the time of entry into such Hedging Agreement, or at the time of the designation referred to in the following clause (c), and ( c ) has been designated by the Company Representative in accordance with the terms of one or more Additional ABL Collateral Documents ( provided that no Person shall, with respect to any Hedging Agreement, be at any time a Hedging Affiliate hereunder with respect to more than one Credit Facility).
“ Additional ABL Hedging Provider ” means any Person (other than an Additional ABL Hedging Affiliate) that has entered into a Hedging Agreement with an Additional ABL Credit Party with the obligations of such Additional ABL Credit Party thereunder being secured by one or more Additional ABL Collateral Documents, as designated by the Company Representative in accordance with the terms of one or more Additional ABL Collateral Documents ( provided that no Person shall, with respect to any Hedging Agreement, be at any time a Hedging Provider hereunder with respect to more than one Credit Facility).
“ Additional ABL Indebtedness ” means any Additional Indebtedness that is designated by the Company Representative as “Additional ABL Indebtedness” in the relevant Additional Indebtedness Designation in accordance with Section 7.11 hereof.
“ Additional ABL Management Credit Provider ” means any Person who ( a ) is a beneficiary of a Management Guarantee provided by an Additional ABL Credit Party, with the obligations of the applicable Additional ABL Credit Party thereunder being secured by one or more Additional ABL Collateral Documents and ( b ) has been designated by the Company Representative in accordance the terms of one or more Additional ABL Collateral Documents ( provided that no Person shall, with respect to any Management Guarantee, be at any time a Management Credit Provider with respect to more than one Credit Facility).
“ Additional ABL Obligations ” means any and all loans and all other obligations, liabilities and indebtedness of every kind, nature and description, whether now existing or hereafter arising, whether arising before, during or after the commencement of any case with respect to any Additional ABL Credit Party under the Bankruptcy Code or any other Insolvency Proceeding, owing by each Additional ABL Credit Party from time to time to any Additional ABL Agent, any Additional ABL Secured Parties or any of them, including any Additional ABL Bank Products Affiliate, Additional ABL Hedging Affiliate, Additional ABL Bank Products Provider, Additional ABL Hedging Provider or Additional ABL Management Credit Provider, under any Additional ABL Document, whether for principal, interest (including interest and fees which, but for the filing of a petition in bankruptcy with respect to such Additional ABL Credit Party, would have accrued on any Additional ABL Obligation, whether or not a claim is allowed against such Additional ABL Credit Party for such interest and fees in the related bankruptcy
 
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proceeding), reimbursement of amounts drawn under letters of credit, payments for early termination of Hedging Agreements, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the Additional ABL Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
“ Additional ABL Recovery ” shall have the meaning set forth in Section 5.3(c) .
“ Additional ABL Secured Parties ” means all Additional ABL Agents, all Additional ABL Credit Facility Lenders, all Additional ABL Bank Products Affiliates, all Additional ABL Bank Products Providers, all Additional ABL Hedging Affiliates, all Additional ABL Hedging Providers, all Additional ABL Management Credit Providers and all successors, assigns, transferees and replacements thereof, as well as any Person designated as an “Additional ABL Secured Party” under any Additional ABL Credit Facility; and with respect to any Additional ABL Agent means the Additional ABL Secured Parties represented by such Additional ABL Agent.
“ Additional Agent ” means any Additional ABL Agent and any Additional [Cash Flow] Agent.
“ Additional Borrower ” means any Additional Credit Party that incurs or issues Additional Indebtedness under any Additional Credit Facility, together with its successors and assigns.
“ Additional [Cash Flow] Agent ” means any one or more administrative agents, collateral agents, security agents, trustees or other representatives for or of any one or more Additional [Cash Flow] Secured Parties, and shall include any successor thereto, as well as any Person designated as an “Agent” under any Additional [Cash Flow] Credit Facility.
“ Additional [Cash Flow] Bank Products Affiliate ” means any Person who ( a ) has entered into a Bank Products Agreement with an Additional [Cash Flow] Credit Party with the obligations of such Additional [Cash Flow] Credit Party thereunder being secured by one or more Additional [Cash Flow] Collateral Documents, ( b ) was an Additional [Cash Flow] Agent or an Additional [Cash Flow] Credit Facility Lender or an Affiliate of an Additional [Cash Flow] Agent or an Additional [Cash Flow] Credit Facility Lender, in each case, on the date the applicable Additional [Cash Flow] Credit Facility became effective or at the time of entry into such Bank Products Agreement, or at the time of the designation referred to in the following clause (c), and ( c ) has been designated by the Company Representative in accordance with the terms of one or more Additional [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Bank Products Agreement, be at any time a Bank Products Affiliate hereunder with respect to more than one Credit Facility).
“ Additional [Cash Flow] Bank Products Provider ” means any Person (other than an Additional [Cash Flow] Bank Products Affiliate) that has entered into a Bank Products Agreement with an Additional [Cash Flow] Credit Party with the obligations of such Additional [Cash Flow] Credit Party thereunder being secured by one or more Additional [Cash Flow] Collateral Documents, as designated by the Company Representative in accordance with the terms of one or more Additional [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Bank Products Agreement, be at any time a Bank Products Provider hereunder with respect to more than one Credit Facility).
 
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“ Additional [Cash Flow] Collateral Documents ” means all “Security Documents” as defined in any Additional [Cash Flow] Credit Facility, and in any event shall include all security agreements, mortgages, deeds of trust, pledges and other collateral documents executed and delivered in connection with any Additional [Cash Flow] Credit Facility, and any other agreement, document or instrument pursuant to which a Lien is granted securing any Additional [Cash Flow] Obligations or under which rights or remedies with respect to such Liens are governed, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Additional [Cash Flow] Credit Facilities ” means ( a ) any one or more agreements, instruments and documents under which any Additional [Cash Flow] Indebtedness is or may be incurred, including any credit agreements, loan agreements, note agreements, promissory notes, indentures, guarantees or other agreements or instruments evidencing or governing the terms of any indebtedness or other financial accommodation, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, together with ( b ) if designated by the Company Representative, any other agreement (including any credit agreement, loan agreement, note agreement, promissory note, indenture, guarantee or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation) extending the maturity of, consolidating, restructuring, refunding, replacing or refinancing all or any portion of the Additional [Cash Flow] Obligations, whether by the same or any other lender, debtholder or other creditor or group of lenders, debtholders or other creditors, or the same or any other agent, trustee or representative therefor, or otherwise, and whether or not increasing the amount of any Indebtedness that may be incurred thereunder.
“ Additional [Cash Flow] Credit Facility Lenders ” means one or more holders of Additional [Cash Flow] Indebtedness (or commitments therefor) that is or may be incurred under one or more Additional [Cash Flow] Credit Facilities, together with their successors, assigns and transferees, as well as any Person designated as an “Additional [Cash Flow] Credit Facility Lender” under any Additional [Cash Flow] Credit Facility.
“ Additional [Cash Flow] Credit Party ” means the Company, Holdings (so long as it is a guarantor under any of the Additional [Cash Flow] Guarantees), each direct or indirect Subsidiary of the Company or any of its Affiliates that is or becomes a party to any Additional [Cash Flow] Document, and any other Person who becomes a guarantor under any of the Additional [Cash Flow] Guarantees.
“ Additional [Cash Flow] Documents ” means any Additional [Cash Flow] Credit Facilities, any Additional [Cash Flow] Guarantees, any Additional [Cash Flow] Collateral Documents, any Bank Products Agreements between any Additional [Cash Flow] Credit Party and any Additional [Cash Flow] Bank Products Affiliate or Additional [Cash Flow] Bank Products Provider, any Hedging Agreements between any Additional [Cash Flow] Credit Party and any Additional [Cash Flow] Hedging Affiliate or Additional [Cash Flow] Hedging Provider, any Management Guarantee in favor of any Additional [Cash Flow] Management Credit Provider, those other ancillary agreements as to which any Additional [Cash Flow] Secured Party
 
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is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Additional [Cash Flow] Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to any Additional [Cash Flow] Agent, in connection with any of the foregoing or any Additional [Cash Flow] Credit Facility, including any intercreditor or joinder agreement among any of the Additional [Cash Flow] Secured Parties or among any of the [Cash Flow] Secured Parties and Additional [Cash Flow] Secured Parties, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Additional [Cash Flow] Guarantees ” means any one or more guarantees of any Additional [Cash Flow] Obligations of any Additional [Cash Flow] Credit Party by any other Additional [Cash Flow] Credit Party in favor of any Additional [Cash Flow] Secured Party, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Additional [Cash Flow] Hedging Affiliate ” means any Person who ( a ) has entered into a Hedging Agreement with an Additional [Cash Flow] Credit Party with the obligations of such Additional [Cash Flow] Credit Party thereunder being secured by one or more Additional [Cash Flow] Collateral Documents, ( b ) was an Additional [Cash Flow] Agent or an Additional [Cash Flow] Credit Facility Lender or an Affiliate of an Additional [Cash Flow] Agent or an Additional [Cash Flow] Credit Facility Lender, in each case, on the date the applicable Additional [Cash Flow] Credit Facility became effective or at the time of entry into such Hedging Agreement, or at the time of the designation referred to in the following clause (c), and ( c ) has been designated by the Company Representative in accordance with the terms of one or more Additional [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Hedging Agreement, be at any time a Hedging Affiliate hereunder with respect to more than one Credit Facility).
“ Additional [Cash Flow] Hedging Provider ” means any Person (other than an Additional [Cash Flow] Hedging Affiliate) that has entered into a Hedging Agreement with an Additional [Cash Flow] Credit Party with the obligations of such Additional [Cash Flow] Credit Party thereunder being secured by one or more Additional [Cash Flow] Collateral Documents, as designated by the Company Representative in accordance with the terms of one or more Additional [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Hedging Agreement, be at any time a Hedging Provider hereunder with respect to more than one Credit Facility).
“ Additional [Cash Flow] Indebtedness ” means any Additional Indebtedness that is designated by the Company Representative as “Additional [Cash Flow] Indebtedness” in the relevant Additional Indebtedness Designation.
“ Additional [Cash Flow] Management Credit Provider ” means any Person who ( a ) is a beneficiary of a Management Guarantee provided by an Additional [Cash Flow] Credit Party, with the obligations of the applicable Additional [Cash Flow] Credit Party thereunder being secured by one or more Additional [Cash Flow] Collateral Documents and ( b ) has been designated by the Company Representative in accordance the terms of one or more Additional [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Management Guarantee, be at any time a Management Credit Provider with respect to more than one Credit Facility).
 
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“ Additional [Cash Flow] Obligations ” means any and all loans and all other obligations, liabilities and indebtedness of every kind, nature and description, whether now existing or hereafter arising, whether arising before, during or after the commencement of any case with respect to any Additional [Cash Flow] Credit Party under the Bankruptcy Code or any other Insolvency Proceeding, owing by each Additional [Cash Flow] Credit Party from time to time to any Additional [Cash Flow] Agent, any Additional [Cash Flow] Secured Parties or any of them, including any Additional [Cash Flow] Bank Products Affiliate, Additional [Cash Flow] Hedging Affiliate, Additional [Cash Flow] Bank Products Provider, Additional [Cash Flow] Hedging Provider or Additional [Cash Flow] Management Credit Provider, under any Additional [Cash Flow] Document, whether for principal, interest (including interest and fees which, but for the filing of a petition in bankruptcy with respect to such Additional [Cash Flow] Credit Party, would have accrued on any Additional [Cash Flow] Obligation, whether or not a claim is allowed against such Additional [Cash Flow] Credit Party for such interest and fees in the related bankruptcy proceeding), reimbursement of amounts drawn under letters of credit, payments for early termination of Hedging Agreements, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the Additional [Cash Flow] Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
“ Additional [Cash Flow] Recovery ” shall have the meaning set forth in Section 5.3(d) .
“ Additional [Cash Flow] Secured Parties ” means all Additional [Cash Flow] Agents, all Additional [Cash Flow] Credit Facility Lenders, all Additional [Cash Flow] Bank Products Affiliates, all Additional [Cash Flow] Bank Products Providers, all Additional [Cash Flow] Hedging Affiliates, all Additional [Cash Flow] Hedging Providers, all Additional [Cash Flow] Management Credit Providers and all successors, assigns, transferees and replacements thereof, as well as any Person designated as an “Additional [Cash Flow] Secured Party” under any Additional [Cash Flow] Credit Facility; and with respect to any Additional [Cash Flow] Agent means the Additional [Cash Flow] Secured Parties represented by such Additional [Cash Flow] Agent.
“ Additional Collateral Documents ” means any Additional ABL Collateral Documents and any Additional [Cash Flow] Collateral Documents.
“ Additional Credit Facilities ” means any Additional ABL Credit Facilities and any Additional [Cash Flow] Credit Facilities.
“ Additional Credit Party ” means any Additional ABL Credit Party and any Additional [Cash Flow] Credit Party.
“ Additional Documents ” means any Additional ABL Documents and any Additional [Cash Flow] Documents.
“ Additional Effective Date ” shall have the meaning set forth in Section 7.11(b) .
 
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“ Additional Guarantees ” means any Additional ABL Guarantees and any Additional [Cash Flow] Guarantees.
“ Additional Guarantor ” means any Additional Credit Party that at any time has provided an Additional Guarantee.
“ Additional Indebtedness ” means any Additional Specified Indebtedness that ( 1 ) is secured by a Lien on Collateral and is permitted to be so secured by
(a) prior to the Discharge of ABL Obligations, subsection 8.2 of the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect) or the corresponding negative covenant restricting Liens contained in any other ABL Credit Agreement then in effect if the Original ABL Credit Agreement is not then in effect (which covenant is designated in such ABL Credit Agreement as applicable for purposes of this definition);
(b) prior to the Discharge of [Cash Flow] Obligations, subsection [    ] 2 of the Original [Cash Flow] Credit Agreement (if the Original [Cash Flow] Credit Agreement is then in effect) or the corresponding negative covenant restricting Liens contained in any other [Cash Flow] Credit Agreement then in effect if the Original [Cash Flow] Credit Agreement is not then in effect (which covenant is designated in such [Cash Flow] Credit Agreement as applicable for purposes of this definition); and
(c) prior to the Discharge of Additional Obligations, any negative covenant restricting Liens contained in any applicable Additional Credit Facility then in effect (which covenant is designated in such Additional Credit Facility as applicable for purposes of this definition); and
( 2 ) is designated as “Additional Indebtedness” by the Company Representative pursuant to an Additional Indebtedness Designation and in compliance with the procedures set forth in Section 7.11 .
As used in this definition of “Additional Indebtedness”, the term “Lien” shall have the meaning set forth ( x ) for purposes of the preceding clause (1)(a), prior to the Discharge of ABL Obligations, in the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect), or in any other ABL Credit Agreement then in effect (if the Original ABL Credit Agreement is not then in effect), ( y ) for purposes of the preceding clause (1)(b), prior to the Discharge of [Cash Flow] Obligations, in the Original [Cash Flow] Credit Agreement (if the Original [Cash Flow] Credit Agreement is then in effect), or in any other [Cash Flow] Credit Agreement then in effect (if the Original [Cash Flow] Credit Agreement is not then in effect), and ( z ) for purposes of the preceding clause (1)(c), prior to the Discharge of Additional Obligations, in the applicable Additional Credit Facility then in effect.
“ Additional Indebtedness Designation ” means a certificate of the Company Representative with respect to Additional Indebtedness substantially in the form of Exhibit A attached hereto.

2  	Insert cross-reference to liens covenant.	
 
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“ Additional Indebtedness Joinder ” means a joinder agreement executed by one or more Additional Agents in respect of the Additional Indebtedness subject to an Additional Indebtedness Designation, on behalf of one or more Additional Secured Parties in respect of such Additional Indebtedness, substantially in the form of Exhibit B attached hereto.
“ Additional Obligations ” means any Additional ABL Obligations and any Additional [Cash Flow] Obligations.
“ Additional Secured Parties ” means any Additional ABL Secured Parties and any Additional [Cash Flow] Secured Parties.
“ Additional Specified Indebtedness ” means any Indebtedness that is or may from time to time be incurred by any Credit Party in compliance with:
(a) prior to the Discharge of ABL Obligations, subsection 8.1 of the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect) or the corresponding negative covenant restricting Indebtedness contained in any other ABL Credit Agreement then in effect if the Original ABL Credit Agreement is not then in effect (which covenant is designated in such ABL Credit Agreement as applicable for purposes of this definition);
(b) prior to the Discharge of [Cash Flow] Obligations, subsection [    ] 3 of the Original [Cash Flow] Credit Agreement (if the Original [Cash Flow] Credit Agreement is then in effect) or the corresponding negative covenant restricting Indebtedness contained in any other [Cash Flow] Credit Agreement then in effect if the Original [Cash Flow] Credit Agreement is not then in effect (which covenant is designated in such [Cash Flow] Credit Agreement as applicable for purposes of this definition); and
(c) prior to the Discharge of Additional Obligations, any negative covenant restricting Indebtedness contained in any Additional Credit Facility then in effect (which covenant is designated in such Additional Credit Facility as applicable for purposes of this definition).
As used in this definition of “Additional Specified Indebtedness”, the term “Indebtedness” shall have the meaning set forth (x) for purposes of the preceding clause (a), prior to the Discharge of ABL Obligations, in the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect), or in any other ABL Credit Agreement then in effect (if the Original ABL Credit Agreement is not then in effect), (y) for purposes of the preceding clause (b), prior to the Discharge of [Cash Flow] Obligations, in the Original [Cash Flow] Credit Agreement (if the Original [Cash Flow] Credit Agreement is then in effect), or in any other [Cash Flow] Credit Agreement then in effect (if the Original [Cash Flow] Credit Agreement is not then in effect), and (z) for purposes of the preceding clause (c), prior to the Discharge of Additional Obligations, in the applicable Additional Credit Facility then in effect. In the event that any Indebtedness as defined in any such Credit Document shall not be Indebtedness as defined in any other such Credit Document, but is or may be incurred in compliance with such other Credit Document, such Indebtedness shall constitute Additional Specified Indebtedness for the purposes of such other Credit Document.

3  	Insert cross-reference to debt covenant.	
 
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“ Affiliate ” means with respect to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 20% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
“ Agent ” means the ABL Agent, the [Cash Flow] Agent and any Additional Agent, as applicable.
“ Agreement ” means this Intercreditor Agreement, as the same may be amended, supplemented, waived or otherwise modified from time to time pursuant to the terms hereof.
“ Alternative DIP Offer ” shall have the meaning set forth in Section 6.1(c)(ii) .
“ Asset Sales Proceeds Account ” means one or more Deposit Accounts or Securities Accounts holding only the proceeds of any sale or disposition of any [Cash Flow] Priority Collateral and the Proceeds of investment thereof.
“ Bank Products Affiliate ” means any ABL Bank Products Affiliate, any [Cash Flow] Bank Products Affiliate, any Additional ABL Bank Products Affiliate or any Additional [Cash Flow] Bank Products Affiliate, as applicable.
“ Bank Products Agreement ” means any agreement pursuant to which a bank or other financial institution agrees to provide ( a ) treasury services, ( b ) credit card, merchant card, purchasing card or stored value card services (including processing and other administrative services with respect thereto), ( c ) cash management services (including controlled disbursements, automated clearinghouse transactions, return items, netting, overdrafts, depository, lockbox, stop payment, electronic funds transfer, information reporting, wire transfer and interstate depository network services) and ( d ) other banking products or services as may be requested by any Credit Party (other than letters of credit and other than loans except Indebtedness arising from services described in items (a) through (c) of this definition).
“ Bank Products Provider ” means any [Cash Flow] Bank Products Provider, any Additional ABL Bank Products Provider or any Additional [Cash Flow] Bank Products Provider, as applicable.
“ Bankruptcy Code ” means title 11 of the United States Code.
“ Bankruptcy Law ” means the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
 
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“ Borrower ” means any of the ABL Borrowers, the [Cash Flow] Borrowers and any Additional Borrower.
“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in the City of New York (or with respect only to letters of credit issued by an Issuing Lender not located in the City of New York, the location of such Issuing Lender) are authorized or required by law to close.
“ Capital Stock ” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing.
“ Capitalized Lease Obligation ” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with generally accepted accounting principles as in effect in the United States.
“ Cash Collateral ” means any Collateral consisting of Money or Cash Equivalents, any Security Entitlement and any Financial Assets.
“ Cash Equivalents ” means ( 1 ) money and ( 2 ) ( a ) securities issued or fully guaranteed or insured by the government of United States of America, Canada or a member state of the European Union, or any agency or instrumentality thereof, ( b ) time deposits, certificates of deposit or bankers’ acceptances of (i) any ABL Secured Party, any [Cash Flow] Secured Party or any Additional Secured Party or any Affiliate thereof or (ii) any commercial bank having capital and surplus in excess of $500,000,000 (or the foreign currency equivalent thereof as of the date of such investment) and the commercial paper of the holding company of which is rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, a comparable rating of such other nationally recognized rating agency as shall be approved by any Agent (other than any Designated Agent), in each case, in its reasonable judgment), (or, if there is no continuing Agent other than any Designated Agent, as designated by the Company Representative)), ( c ) money market instruments, commercial paper or other short-term obligations rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, a comparable rating of such other nationally recognized rating agency as shall be approved by any Agent (other than any Designated Agent), in each case, in its reasonable judgment (or, if there is no continuing Agent other than any Designated Agent, as designated by the Company Representative)), ( d ) investments in money market funds complying with the risk limiting conditions of Rule 2a-7 or any successor rule of the Securities and Exchange Commission under the Investment Company Act of 1940, as amended, ( e ) Canadian dollars, and ( f ) investments similar to any of the foregoing denominated in Canadian dollars or any other foreign currencies approved by management of the Company Representative.
“ [Cash Flow] Agent ” means [                    ], as collateral agent under the [Cash Flow] Credit Agreement, together with its successors and assigns in such capacity from time to time, whether under the Original [Cash Flow] Credit Agreement or any subsequent [Cash Flow] Credit Agreement, as well as any Person designated as the “Agent” or “Collateral Agent” under any [Cash Flow] Credit Agreement.
 
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“ [Cash Flow] Bank Products Affiliate ” means any Person who ( a ) has entered into a Bank Products Agreement with a [Cash Flow] Credit Party with the obligations of such [Cash Flow] Credit Party thereunder being secured by one or more [Cash Flow] Collateral Documents, ( b ) was a [Cash Flow] Agent, a [Cash Flow] Credit Agreement Lender or an Affiliate of a [Cash Flow] Agent or a [Cash Flow] Credit Agreement Lender on [                    ], or at the time of entry into such Bank Products Agreement, or at the time of the designation referred to in the following clause (c), and ( c ) has been designated by the Company Representative in accordance with the terms of one or more [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Bank Products Agreement, be at any time a Bank Products Affiliate hereunder with respect to more than one Credit Facility).
“ [Cash Flow] Bank Products Provider ” means any Person (other than a [Cash Flow] Bank Products Affiliate) that has entered into a Bank Products Agreement with a [Cash Flow] Credit Party with the obligations of such [Cash Flow] Credit Party thereunder being secured by one or more [Cash Flow] Collateral Documents, as designated by the Company Representative in accordance with the terms of one or more [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Bank Products Agreement, be at any time a Bank Products Provider hereunder with respect to more than one Credit Facility).
“ [Cash Flow] Borrowers ” means [                    ], each in its capacity as a borrower under the [Cash Flow] Credit Agreement, together with their respective successors and assigns.
“ [Cash Flow] Collateral Documents ” means all “Security Documents” as defined in the Original [Cash Flow] Credit Agreement, and all other security agreements, mortgages, deeds of trust, pledges and other collateral documents executed and delivered in connection with any [Cash Flow] Credit Agreement, and any other agreement, document or instrument pursuant to which a Lien is granted securing any [Cash Flow] Obligations or under which rights or remedies with respect to such Liens are governed, in each case as the same may be amended, supplemented, waived or modified from time to time.
“ [Cash Flow] Collateral Obligations ” means the [Cash Flow] Obligations and any Additional [Cash Flow] Obligations.
“ [Cash Flow] Collateral Representative ” means the [Cash Flow] Agent acting for the [Cash Flow] Collateral Secured Parties, unless the principal amount of Additional [Cash Flow] Obligations under any Additional [Cash Flow] Credit Facility exceeds the principal amount of [Cash Flow] Obligations under the [Cash Flow] Credit Agreement, and in such case (unless otherwise agreed in writing between the [Cash Flow] Agent and any Additional [Cash Flow] Agent or, after the Discharge of [Cash Flow] Obligations, between any Additional [Cash Flow] Agents), the Additional [Cash Flow] Agent under such Additional [Cash Flow] Credit Facility (or, if there is more than one such Additional [Cash Flow] Credit Facility, the Additional [Cash Flow] Credit Facility under which the greatest principal amount of Additional [Cash Flow] Obligations is outstanding at the time) acting for the [Cash Flow] Collateral Secured Parties. In addition, in the event that any Additional [Cash Flow] Agent subordinates its security interest in
 
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any [Cash Flow] Priority Collateral to the security interest of the ABL Agent or any Additional ABL Agent as permitted by Section 2.1(a)(6) and 2.1(a)(8) or which otherwise has an Impairment with respect to all or substantially all of the [Cash Flow] Priority Collateral then such Additional [Cash Flow] Agent shall not serve as [Cash Flow] Collateral Representative (unless ( x ) the Discharge of [Cash Flow] Obligations has occurred and ( y ) either such Additional [Cash Flow] Agent is the only Additional [Cash Flow] Agent or each other Additional [Cash Flow] Agent has similarly subordinated its security interest) and, in such event the [Cash Flow] Collateral Representative will be selected as if the disqualified Additional [Cash Flow] Agent and the Additional [Cash Flow] Obligations represented thereby did not exist.
“ [Cash Flow] Collateral Secured Parties ” means the [Cash Flow] Secured Parties and any Additional [Cash Flow] Secured Parties.
“ [Cash Flow] Credit Agreement ” means ( i ) if the Original [Cash Flow] Credit Agreement is then in effect, the Original [Cash Flow] Credit Agreement and ( ii ) thereafter, if designated by the Company Representative, any other credit agreement, loan agreement, note agreement, promissory note, indenture, guarantee or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that complies with clause (1) of the definition of “Additional Indebtedness” and has been incurred to refund, refinance, restructure, replace, renew, repay, increase or extend (whether in whole or in part and whether with the original agent and creditors or other agents and creditors or otherwise) the indebtedness and other obligations outstanding under ( x ) the Original [Cash Flow] Credit Agreement or ( y ) any subsequent [Cash Flow] Credit Agreement (in each case, as amended, supplemented, waived or otherwise modified from time to time); provided that the requisite creditors party to such [Cash Flow] Credit Agreement (or their agent or other representative on their behalf) shall agree, by a joinder agreement substantially in the form of Exhibit C attached hereto or otherwise in form and substance reasonably satisfactory to the ABL Agent and any Additional Agent (other than any Designated Agent) (or, if there is no continuing Agent other than any Designated Agent, as designated by the Company Representative), that the obligations under such [Cash Flow] Credit Agreement are subject to the terms and provisions of this Agreement. Any reference to the [Cash Flow] Credit Agreement shall be deemed a reference to any [Cash Flow] Credit Agreement then in existence.
“ [Cash Flow] Credit Agreement Lenders ” means the lenders, debtholders and other creditors party from time to time to the [Cash Flow] Credit Agreement, together with their successors, assigns and transferees, as well as any Person designated as a “[Cash Flow] Credit Agreement Lender” under any [Cash Flow] Credit Agreement.
“ [Cash Flow] Credit Parties ” means the [Cash Flow] Borrowers, the [Cash Flow] Guarantors and each other direct or indirect Subsidiary of the Company or any of its Affiliates that is now or hereafter becomes a party to any [Cash Flow] Document.
“ [Cash Flow] Documents ” means the [Cash Flow] Credit Agreement, the [Cash Flow] Guarantees, the [Cash Flow] Collateral Documents, any Bank Products Agreements between any [Cash Flow] Credit Party and any [Cash Flow] Bank Products Affiliate or any [Cash Flow] Bank Products Provider, any Hedging Agreements between any [Cash Flow] Credit Party and any [Cash Flow] Hedging Affiliate or any [Cash Flow] Hedging Provider, any
 
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Management Guarantee in favor of a [Cash Flow] Management Credit Provider, and those other ancillary agreements as to which the [Cash Flow] Agent or any [Cash Flow] Secured Party is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any [Cash Flow] Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to the [Cash Flow] Agent, in connection with any of the foregoing or any [Cash Flow] Credit Agreement, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ [Cash Flow] Guarantees ” means that certain guarantee agreement dated as of [ — ] by the [Cash Flow] Guarantors in favor of the [Cash Flow] Agent, and all other guarantees of any [Cash Flow] Obligations of any [Cash Flow] Credit Party by any other [Cash Flow] Credit Party in favor of any [Cash Flow] Secured Party, in each case as amended, supplemented, waived or otherwise modified from time to time.
“ [Cash Flow] Guarantors ” means the collective reference to Holdings (so long as it is a guarantor under any of the [Cash Flow] Guarantees), each of the Company’s Subsidiaries that is a guarantor under any of the [Cash Flow] Guarantees and any other Person who becomes a guarantor under any of the [Cash Flow] Guarantees.
“ [Cash Flow] Hedging Affiliate ” means any Person who ( a ) has entered into a Hedging Agreement with a [Cash Flow] Credit Party with the obligations of such [Cash Flow] Credit Party thereunder being secured by one or more [Cash Flow] Collateral Documents, ( b ) was a [Cash Flow] Agent, a [Cash Flow] Credit Agreement Lender or an Affiliate of a [Cash Flow] Credit Agreement Lender at the time of entry into such Hedging Agreement, or at the time of the designation referred to in the following clause (c), and ( c ) has been designated by the Company Representative in accordance with the terms of one or more [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Hedging Agreement, be at any time a Hedging Affiliate hereunder with respect to more than one Credit Facility).
“ [Cash Flow] Hedging Provider ” means any Person (other than a [Cash Flow] Hedging Affiliate) that has entered into a Hedging Agreement with a [Cash Flow] Credit Party with the obligations of such [Cash Flow] Credit Party thereunder being secured by one or more [Cash Flow] Collateral Documents, as designated by the Company Representative in accordance with the terms of one or more [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Hedging Agreement, be at any time a Hedging Provider hereunder with respect to more than one Credit Facility).
“ [Cash Flow] Management Credit Provider ” means any Person who ( a ) is a beneficiary of a Management Guarantee provided by an [Cash Flow] Credit Party, with the obligations of the applicable [Cash Flow] Credit Party thereunder being secured by one or more [Cash Flow] Collateral Documents and ( b ) has been designated by the Company Representative in accordance the terms of one or more [Cash Flow] Collateral Documents ( provided that no Person shall, with respect to any Management Guarantee, be at any time a Management Credit Provider with respect to more than one Credit Facility).
“ [Cash Flow] Obligations ” means any and all loans and all other obligations, liabilities and indebtedness of every kind, nature and description, whether now existing or
 
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hereafter arising, whether arising before, during or after the commencement of any case with respect to any [Cash Flow] Credit Party under the Bankruptcy Code or any other Insolvency Proceeding, owing by each [Cash Flow] Credit Party from time to time to the [Cash Flow] Agent, the “administrative agent” or “agent” under the [Cash Flow] Credit Agreement, the [Cash Flow] Secured Parties or any of them, including any [Cash Flow] Bank Products Affiliates, any [Cash Flow] Hedging Affiliates, any [Cash Flow] Bank Products Providers, any [Cash Flow] Hedging Providers or any [Cash Flow] Management Credit Providers, under any [Cash Flow] Document, whether for principal, interest (including interest and fees which, but for the filing of a petition in bankruptcy with respect to such [Cash Flow] Credit Party, would have accrued on any [Cash Flow] Obligation, whether or not a claim is allowed against such [Cash Flow] Credit Party for such interest and fees in the related bankruptcy proceeding), reimbursement of amounts drawn under letters of credit, payments for early termination of Hedging Agreements, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the [Cash Flow] Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
“ [Cash Flow] Priority Collateral ” means all Collateral, other than the ABL Priority Collateral, including all Real Property, Equipment, Intellectual Property and Capital Stock of any direct or indirect Subsidiaries of Holdings, collateral security and guarantees with respect to any [Cash Flow] Priority Collateral and all cash, Money, Instruments, Securities, Financial Assets and Deposit Accounts directly received as Proceeds of any [Cash Flow] Priority Collateral; provided , however , no Proceeds of Proceeds will constitute [Cash Flow] Priority Collateral unless such Proceeds of Proceeds would otherwise constitute [Cash Flow] Priority Collateral or are credited to any Asset Sales Proceeds Account. For the avoidance of doubt, under no circumstance shall Excluded Assets (as defined in the next succeeding sentence) be [Cash Flow] Priority Collateral. As used in this definition of “[Cash Flow] Priority Collateral”, the term “Excluded Assets” shall have the meaning provided ( x ) prior to the Discharge of [Cash Flow] Obligations, in the Original [Cash Flow] Credit Agreement (if the Original [Cash Flow] Credit Agreement is then in effect), or in any other Additional [Cash Flow] Credit Facility then in effect (if the Original [Cash Flow] Credit Agreement is not then in effect) or the [Cash Flow] Collateral Documents relating thereto, and ( y ) from and after the Discharge of [Cash Flow] Obligations, in the applicable Additional [Cash Flow] Credit Facility then in effect which is designated as applicable for the purposes of this definition or the Additional [Cash Flow] Collateral Documents relating thereto.
“ [Cash Flow] Priority Collateral Documents ” means the [Cash Flow] Documents and any Additional [Cash Flow] Documents, as applicable.
“ [Cash Flow] Recovery ” shall have the meaning set forth in Section 5.3(b) .
“ [Cash Flow] Secured Parties ” means the [Cash Flow] Agent, all [Cash Flow] Credit Agreement Lenders, all [Cash Flow] Bank Products Affiliates, all [Cash Flow] Bank Products Providers, all [Cash Flow] Hedging Affiliates, all [Cash Flow] Hedging Providers, all [Cash Flow] Management Credit Providers, and all successors, assigns, transferees and replacements thereof, as well as any Person designated as a “[Cash Flow] Secured Party” under any [Cash Flow] Credit Agreement.
 
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“ Collateral ” means all Property now owned or hereafter acquired by any Credit Party in or upon which a Lien is granted or purported to be granted to the ABL Agent, the [Cash Flow] Agent or any Additional Agent under any of the ABL Collateral Documents, the [Cash Flow] Collateral Documents or the Additional Collateral Documents, together with all rents, issues, profits, products, and Proceeds thereof, to the extent a Lien is granted or purported to be granted therein to the applicable Agent by such applicable documents, but excluding any ABL Canadian Collateral.
“ Commodities Agreement ” means, in respect of a Person, any commodity futures contract, forward contract, option or similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is a party or beneficiary.
“ Company ” means Unisource Worldwide, Inc. (as successor by merger to xpedx Intermediate, LLC), a Delaware corporation, and any successor in interest thereto.
“ Company Representative ” means the Person most recently designated as “Borrower Representative” under either the Original ABL Credit Agreement or the Original [Cash Flow] Credit Agreement or, if no such Person has been designated, Unisource Worldwide, Inc.
“ Conforming Plan of Reorganization ” means any Plan of Reorganization whose provisions are consistent with the provisions of this Agreement.
“ Control Collateral ” means any Collateral consisting of any certificated Security, Investment Property, Deposit Account, Instruments, Chattel Paper and any other Collateral as to which a Lien may be perfected through possession or control by the secured party, or any agent therefor.
“ Copyright Licenses ” means, with respect to any Credit Party, all United States written license agreements of such Credit Party providing for the grant by or to such Credit Party of any right to use any United States copyright of such Credit Party, other than agreements with any Person who is an Affiliate or a Subsidiary of such Credit Party, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Copyrights ” means, with respect to any Credit Party, all of such Credit Party’s right, title and interest in and to all United States copyrights, whether or not the underlying works of authorship have been published or registered, United States copyright registrations and copyright applications, and ( i ) all renewals thereof, ( ii ) all income, royalties, damages and payments now or hereafter due and/or payable with respect thereto, including payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof and ( iii ) the right to sue or otherwise recover for past, present and future infringements and misappropriations thereof.
“ Credit Documents ” means the ABL Documents, the [Cash Flow] Documents and any Additional Documents.
 
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“ Credit Facility ” means the ABL Credit Agreement, the [Cash Flow] Credit Agreement or any Additional Credit Facility, as applicable.
“ Credit Parties ” means the ABL Credit Parties, the [Cash Flow] Credit Parties and any Additional Credit Parties.
“ Currency Agreement ” means, in respect of a Person, any foreign exchange contract, currency swap agreement or other similar agreement or arrangements (including derivative agreements or arrangements), as to which such Person is a party or a beneficiary.
“ Designated Agent ” means any Additional Agent, any [Cash Flow] Agent under any [Cash Flow] Credit Agreement other than the Original [Cash Flow] Credit Agreement, or any ABL Agent under any ABL Credit Agreement other than the Original ABL Credit Agreement, in each case that the Company Representative designates as a Designated Agent (as confirmed in writing by such Agent if such designation is made subsequent to the joinder of such Agent to this Agreement), as and to the extent so designated. Such designation may be for all purposes under this Agreement, or may be for one or more specified purposes thereunder or provisions thereof.
“ DIP Financing ” shall have the meaning set forth in Section 6.1(a) .
“ DIP Offer ” shall have the meaning set forth in Section 6.1(c)(i) .
“ Discharge of ABL Collateral Obligations ” means the Discharge of ABL Obligations and (if applicable) the Discharge of Additional ABL Obligations for each Additional ABL Credit Facility.
“ Discharge of ABL Obligations ” means:
(a) the payment in full in cash of the applicable ABL Obligations that are outstanding and unpaid at the time all Indebtedness under the applicable ABL Credit Agreement is paid in full in cash, ( i ) including (if applicable), with respect to amounts available to be drawn under outstanding letters of credit issued thereunder at such time (or indemnities or other undertakings issued pursuant thereto in respect of outstanding letters of credit at such time), delivery or provision of cash or backstop letters of credit in respect thereof in compliance with the terms of any such ABL Credit Agreement (which shall not exceed an amount equal to 105% of the aggregate undrawn amount of such letters of credit) but ( ii ) excluding unasserted contingent indemnification or other obligations under the applicable ABL Credit Agreement at such time; and
(b) the termination of all then outstanding commitments to extend credit under the ABL Documents at such time.
 
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“ Discharge of Additional ABL Obligations ” means, if any Indebtedness shall at any time have been incurred under any Additional ABL Credit Facility, with respect to each Additional ABL Credit Facility:
(a) the payment in full in cash of the applicable Additional ABL Obligations that are outstanding and unpaid at the time all Additional ABL Indebtedness under such Additional ABL Credit Facility is paid in full in cash, ( i ) including (if applicable), with respect to amounts available to be drawn under outstanding letters of credit issued thereunder at such time (or indemnities or other undertakings issued pursuant thereto in respect of outstanding letters of credit at such time), delivery or provision of cash or backstop letters of credit in respect thereof in compliance with the terms of any such Additional ABL Credit Facility (which shall not exceed an amount equal to 105% of the aggregate undrawn amount of such letters of credit) but ( ii ) excluding unasserted contingent indemnification or other obligations under the applicable Additional ABL Credit Facility at such time; and
(b) the termination of all then outstanding commitments to extend credit under the Additional ABL Documents at such time.
“ Discharge of Additional [Cash Flow] Obligations ” means, if any Indebtedness shall at any time have been incurred under any Additional [Cash Flow] Credit Facility, with respect to each Additional [Cash Flow] Credit Facility:
(a) the payment in full in cash of the applicable Additional [Cash Flow] Obligations that are outstanding and unpaid at the time all Additional [Cash Flow] Indebtedness under such Additional [Cash Flow] Credit Facility is paid in full in cash, (i) including (if applicable), with respect to amounts available to be drawn under outstanding letters of credit issued thereunder at such time (or indemnities or other undertakings issued pursuant thereto in respect of outstanding letters of credit at such time), delivery or provision of cash or backstop letters of credit in respect thereof in compliance with the terms of any such Additional [Cash Flow] Credit Facility (which shall not exceed an amount equal to 105% of the aggregate undrawn amount of such letters of credit) but (ii) excluding unasserted contingent indemnification or other obligations under the applicable Additional [Cash Flow] Credit Facility at such time; and
(b) the termination of all then outstanding commitments to extend credit under the Additional [Cash Flow] Documents at such time.
“ Discharge of Additional Obligations ” means the Discharge of Additional ABL Obligations (if applicable) for each Additional ABL Credit Facility and the Discharge of Additional [Cash Flow] Obligations (if applicable) for each Additional [Cash Flow] Credit Facility.
“ Discharge of [Cash Flow] Collateral Obligations ” means the Discharge of [Cash Flow] Obligations and (if applicable) the Discharge of Additional [Cash Flow] Obligations for each Additional [Cash Flow] Credit Facility.
“ Discharge of [Cash Flow] Obligations ” means:
(a) the payment in full in cash of the applicable [Cash Flow] Obligations that are outstanding and unpaid at the time all Indebtedness under the applicable [Cash Flow] Credit Agreement is paid in full in cash, ( i ) including (if applicable), with respect to amounts available to be drawn under outstanding letters of credit issued thereunder at such time (or indemnities or
 
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other undertakings issued pursuant thereto in respect of outstanding letters of credit at such time), delivery or provision of cash or backstop letters of credit in respect thereof in compliance with the terms of any such [Cash Flow] Credit Agreement (which shall not exceed an amount equal to 105% of the aggregate undrawn amount of such letters of credit), but ( ii ) excluding unasserted contingent indemnification or other obligations under the applicable [Cash Flow] Credit Agreement at such time; and
(b) the termination of all then outstanding commitments to extend credit under the [Cash Flow] Documents at such time.
“ Disposition ” means any sale, issuance, conveyance, transfer, lease or other disposition.
“ Event of Default ” means an Event of Default under any ABL Credit Agreement, any [Cash Flow] Credit Agreement or any Additional Credit Facility.
“ Exercise Any Secured Creditor Remedies ” or “ Exercise of Secured Creditor Remedies ” means:
(a) the taking of any action to enforce or realize upon any Lien on Collateral, including the institution of any foreclosure proceedings or the noticing of any public or private sale pursuant to Article 9 of the Uniform Commercial Code, or taking any action to enforce any right or power to repossess, replevy, attach, garnish, levy upon or collect the Proceeds of any Lien on Collateral;
(b) the exercise of any right or remedy provided to a secured creditor on account of a Lien on Collateral under any of the Credit Documents, under applicable law, by self-help repossession, by notification to account obligors of any Grantor, in an Insolvency Proceeding or otherwise, including the election to retain any of the Collateral in satisfaction of a Lien on Collateral;
(c) the taking of any action or the exercise of any right or remedy in respect of the collection on, set-off against, marshaling of, injunction respecting or foreclosure on the Collateral or the Proceeds thereof;
(d) the appointment of a receiver, receiver and manager or interim receiver of all or part of the Collateral;
(e) the sale, lease, license, or other disposition of all or any portion of the Collateral by private or public sale or any other means permissible under applicable law;
(f) the exercise of any other right of a secured creditor under Part 6 of Article 9 of the Uniform Commercial Code;
(g) the exercise of any voting rights relating to any Capital Stock included in the Collateral; and
(h) the delivery of any notice, claim or demand relating to the Collateral to any Person (including any securities intermediary, depository bank or landlord) in possession or control of any Collateral,
 
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provided that ( i ) filing a proof of claim or statement of interest in any Insolvency Proceeding, ( ii ) the acceleration of the ABL Obligations, the [Cash Flow] Obligations or any Additional Obligations, ( iii ) the establishment of borrowing base and/or availability reserves, collateral, Accounts or Inventory ineligibles, or other conditions for advances, ( iv ) the changing of advance rates or advance sub-limits, ( v ) the imposition of a default rate or late fee, ( vi ) the collection and application (including pursuant to “cash dominion” provisions) of Accounts or other monies deposited from time to time in Commodity Accounts, Deposit Accounts or Securities Accounts, in each case, against the ABL Obligations or any Additional ABL Obligations pursuant to the provisions of the ABL Documents or any applicable Additional ABL Documents (including the notification of account debtors, depositary institutions or any other Person to deliver proceeds of ABL Priority Collateral to the ABL Agent or any applicable Additional ABL Agent), ( vii ) the cessation of lending pursuant to the provisions of the ABL Documents, the [Cash Flow] Documents or any applicable Additional Documents, including upon the occurrence of a default on the existence of an over-advance, ( viii ) the consent by the ABL Agent to disposition by any Grantor of any of the ABL Priority Collateral or the consent by the [Cash Flow] Collateral Representative to disposition by any Grantor of any of the [Cash Flow] Priority Collateral or ( ix ) seeking adequate protection shall not be deemed to be an Exercise of Secured Creditor Remedies.
“ Financing Lease ” means any lease of property, real or personal, the obligations of the lessee in respect of which are required to be capitalized on a balance sheet of the lessee in accordance with generally accepted accounting principles as in effect in the United States.
“ Foreign Subsidiary ” means any Subsidiary of the Company ( a ) that is organized under the laws of any jurisdiction outside of the United States of America and any Subsidiary of such Foreign Subsidiary or ( b ) that is a Foreign Subsidiary Holdco. Any subsidiary of the Company which is organized and existing under the laws of Puerto Rico or any other territory of the United States of America shall be a Foreign Subsidiary.
“ Foreign Subsidiary Holdco ” means any Subsidiary of the Company, so long as such Subsidiary has no material assets other than securities or indebtedness of one or more Foreign Subsidiaries (or Subsidiaries thereof), and intellectual property relating to such Foreign Subsidiaries (or Subsidiaries thereof) and other assets (including cash, Cash Equivalents or Temporary Cash Investments) relating to an ownership interest in any such securities, indebtedness, intellectual property or Subsidiaries.
“ General Intangibles ” means all “general intangibles” as such term is defined in the Uniform Commercial Code including with respect to any Credit Party, all contracts, agreements, instruments and indentures in any form, and portions thereof, to which such Credit Party is a party or under which such Credit Party has any right, title or interest or to which such Credit Party or any property of such Credit Party is subject, as the same may from time to time be amended, supplemented, waived or otherwise modified from time to time.
 
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“ Governmental Authority ” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the European Union.
“ Grantor ” means any “Grantor” as defined in the ABL Collateral Documents or in the [Cash Flow] Collateral Documents, as the context requires.
“ Guarantor ” means any of the ABL Guarantors, the [Cash Flow] Guarantors and any Additional Guarantors.
“ Hedging Affiliate ” means any ABL Hedging Affiliate, any [Cash Flow] Hedging Affiliate, any Additional ABL Hedging Affiliate or any Additional [Cash Flow] Hedging Affiliate, as applicable.
“ Hedging Agreement ” means any Interest Rate Agreement, Commodities Agreement, Currency Agreement or any other credit or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity, credit or equity values or creditworthiness (including any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.
“ Hedging Provider ” means any Additional ABL Hedging Provider, any Additional [Cash Flow] Hedging Provider or any [Cash Flow] Hedging Provider, as applicable.
“ Holdings ” means xpedx Holding Company, a Delaware limited liability company, and any successor in interest thereto.
“ Impairment ” shall ( a ) with respect to the [Cash Flow] Collateral Obligations, have the meaning set forth in Section 2.1(e) , and ( b ) with respect to the ABL Collateral Obligations, have the meaning set forth in Section 2.1(f) .
“ Indebtedness ” means, with respect to any Person at any date, ( a ) all indebtedness of such Person for borrowed money or for the deferred purchase price of property (other than trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), which purchase price is due more than one year after the date of placing such property in final service or taking final delivery and title thereto, ( b ) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, ( c ) all obligations of such Person under Financing Leases, ( d ) all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments issued or created for the account of such Person, ( e ) all obligations of such Person in respect of interest rate protection agreements, interest rate futures, interest rate options, interest rate caps and any other interest rate hedge arrangements, ( f ) all indebtedness or obligations of the types referred to in the preceding clauses (a) through (e) to the extent secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof and ( g ) all guarantees by such Person of Indebtedness of other Persons, to the extent so guaranteed by such Person.
 
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“ Insolvency Proceeding ” means ( a ) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or ( b ) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case covered by clauses (a) and (b) undertaken under United States Federal, State or foreign law, including the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada).
“ Intellectual Property ” means, with respect to any Credit Party, the collective reference to such Credit Party’s Copyrights, Copyright Licenses, Patents, Patent Licenses, Trade Secrets, Trade Secret Licenses, Trademarks and Trademark Licenses.
“ Intercompany Loans ” means any amounts owing by any Grantor to Holdings, the Company or any of its Subsidiaries, whether or not evidenced by a promissory note.
“ Interest Rate Agreement ” means, with respect to any Person, any interest rate protection agreement, future agreement, option agreement, swap agreement, cap agreement, collar agreement, hedge agreement or other similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is party or a beneficiary.
“ Intervening ABL Secured Party ” shall have the meaning set forth in Section 4.1(h) .
“ Intervening [Cash Flow] Creditor ” shall have the meaning set forth in Section 4.1(h) .
“ Inventory Amount ” shall have the meaning set forth in Section 4.3 .
“ Issuing Lender ” shall have the meaning set forth in the ABL Credit Agreement, the [Cash Flow] Credit Agreement or any Additional Credit Facility, as the context requires.
“ Lien ” means any mortgage, pledge, hypothecation, assignment for purposes of security, security deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing).
“ Lien Priority ” means, with respect to any Lien of the ABL Agent, the ABL Secured Parties, the [Cash Flow] Agent, the [Cash Flow] Secured Parties, any Additional Agent or any Additional Secured Parties in the Collateral, the order of priority of such Lien as specified in Section 2.1 .
“ Management Credit Provider ” means any ABL Management Credit Provider, Additional ABL Management Credit Provider, Additional [Cash Flow] Management Credit Provider or [Cash Flow] Management Credit Provider, as applicable.
 
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“ Management Guarantee ” shall have the meaning assigned to such term in (a) with respect to the ABL Obligations, the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect), or in any other ABL Credit Agreement then in effect (if the Original ABL Credit Agreement is not then in effect), (b) with respect to any Additional ABL Obligations, any Additional ABL Credit Facility, (c) with respect to any Additional [Cash Flow] Obligations, any Additional [Cash Flow] Credit Facility, and (d) with respect to the [Cash Flow] Obligations, the Original [Cash Flow] Credit Agreement (if the Original [Cash Flow] Credit Agreement is then in effect), or in any other [Cash Flow] Credit Agreement then in effect (if the Original [Cash Flow] Credit Agreement is not then in effect).
“ Matching DIP Offer ” shall have the meaning set forth in Section 6.1(c)(ii) .
“ Moody’s ” means Moody’s Investors Service, Inc., and its successors.
“ Non-Conforming Plan of Reorganization ” means any Plan of Reorganization whose provisions are inconsistent with the provisions of this Agreement, including any plan of reorganization that purports to re-order (whether by subordination, invalidation, or otherwise) or otherwise disregard, in whole or part, the provisions of Article 2 (Lien Priorities), the provisions of Article 4 (Application of Proceeds) or the provisions of Article 6 (Insolvency Proceedings).
“ Original ABL Credit Agreement ” means that certain Credit Agreement dated as of [ — ], 2014 by and among the ABL Borrowers, Bank of America, N.A., as administrative agent, the ABL Credit Agreement Lenders and the ABL Agent, as amended, supplemented, waived or otherwise modified from time to time.
“ Original [Cash Flow] Credit Agreement ” means that certain Credit Agreement dated as of [ — ] by and among the [Cash Flow] Borrowers, [                    ], as administrative agent, the [Cash Flow] Credit Agreement Lenders and the [Cash Flow] Agent, as amended, supplemented, waived or otherwise modified from time to time.
“ Party ” means the ABL Agent, the [Cash Flow] Agent or any Additional Agent, and “ Parties ” means all of the ABL Agent, the [Cash Flow] Agent and any Additional Agent.
“ Patent License ” means, with respect to any Credit Party, all United States written license agreements of such Credit Party with any other Person that is not an Affiliate or a Subsidiary of such Credit Party, in connection with any United States patent, patent application, or patentable invention other than agreements with any Person who is an Affiliate or a Subsidiary of such Credit Party, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Patents ” means, with respect to any Credit Party, all of such Credit Party’s right, title and interest in and to all United States patents, patent applications and patentable inventions and all reissues and extensions thereof, including ( i ) all inventions and improvements described and claimed therein, ( ii ) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, ( iii ) all income, royalties, damages and other payments now or hereafter due and/or payable with respect thereto (including payments under all licenses entered into in connection therewith, and damages and payments for past, present or
 
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future infringements thereof), and ( iv ) all other rights corresponding thereto in the United States and all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon, and all other rights of any kind whatsoever of such Credit Party accruing thereunder or pertaining thereto.
“ Payment Collateral ” means all Accounts, Instruments, Chattel Paper, Letter-of-Credit Rights, Deposit Accounts (other than the Asset Sales Proceeds Account), Securities Accounts, and Payment Intangibles, together with all Supporting Obligations, in each case composing a portion of the Collateral.
“ Person ” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.
“ Plan of Reorganization ” means any plan of reorganization, plan of liquidation, agreement for composition, or other type of plan of arrangement proposed in or in connection with any Insolvency Proceeding.
“ Pledged Securities ” shall have the meaning set forth in the ABL Collateral Documents or in the [Cash Flow] Collateral Documents, as the context requires.
“ Preferred Stock ” as applied to the Capital Stock of any corporation means Capital Stock of any class or classes (however designated) that by its terms is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation.
“ Priority Collateral ” means the ABL Priority Collateral or the [Cash Flow] Priority Collateral.
“ Proceeds ” means ( a ) all “proceeds”, as such term is defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral, ( b ) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected or disposed of, whether voluntarily or involuntarily, and ( c ) in the case of Proceeds of Pledged Securities, all dividends or other income from the Pledged Securities, collections thereon or distributions or payments with respect thereto.
“ Property ” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
“ Proposed DIP ” shall have the meaning set forth in Section 6.1(c)(i) .
“ Purchase Money Indebtedness ” means any Indebtedness incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets, whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock of any Person owning such property or assets, or otherwise.
 
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“ Real Property ” means any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license and any other right to use or occupy real property.
“ Requisite ABL Holders ” means ABL Secured Parties and/or Additional ABL Secured Parties holding, in the aggregate, in excess of 50% of the aggregate ABL Collateral Exposure under the ABL Credit Agreement and any Additional ABL Credit Facility (other than ABL Obligations and Additional ABL Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding ABL Obligations and Additional Obligations in respect of the ABL Credit Agreement or any Additional ABL Credit Agreement); provided that:
(a) if the matter being consented to or the action being taken by the ABL Collateral Representative is the subordination of Liens to other Liens, the consent to DIP Financing, or the consent to a sale of all or substantially all of the ABL Priority Collateral or (after the Discharge of [Cash Flow] Collateral Obligations) all or substantially all of the Collateral, then “Requisite ABL Holders” means those ABL Collateral Secured Parties necessary to validly consent to the requested action in accordance with the applicable ABL Documents and Additional ABL Documents,
(b) except as may be separately otherwise agreed in writing by and between or among each Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties, if the matter being consented to or the action being taken by the ABL Collateral Representative will affect the ABL Secured Parties in a manner different and materially adverse relative to the manner such matter or action affects any Additional ABL Secured Parties (except to the extent expressly set forth in this Agreement), then “Requisite ABL Holders” means ( 1 ) Additional ABL Secured Parties and/or ABL Secured Parties holding, in the aggregate, in excess of 50% of the aggregate ABL Collateral Exposure under the ABL Credit Agreement and any Additional ABL Credit Facility (other than ABL Obligations and Additional ABL Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding ABL Collateral Obligations in respect of the ABL Credit Agreement or any Additional ABL Credit Agreement) and ( 2 ) ABL Secured Parties holding, in the aggregate, in excess of 50% of the ABL Collateral Exposure under the ABL Credit Agreement (other than ABL Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding ABL Obligations in respect of the ABL Credit Agreement), and
(c) except as may be separately otherwise agreed in writing by and between or among each Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties, if the matter being consented to or the action being taken by the ABL Collateral Representative will affect any Additional ABL Agent or the Additional ABL Secured Parties represented thereby in a manner different and materially adverse relative to the manner such matter or action affects the ABL Secured Parties or the other Additional ABL Secured Parties (except to the extent expressly set forth in this Agreement), then “Requisite ABL Holders” means ( 1 ) Additional ABL Secured Parties and/or ABL Secured Parties holding, in the aggregate, in excess of 50% of the aggregate
 
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ABL Collateral Exposure under the ABL Credit Agreement and any Additional ABL Credit Facility (other than ABL Obligations and Additional ABL Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding ABL Collateral Obligations in respect of the ABL Credit Agreement or any Additional ABL Credit Agreement) and ( 2 ) such Additional ABL Agent and/or Additional ABL Secured Parties represented thereby holding, in the aggregate, in excess of 50% of the ABL Collateral Exposure under the applicable Additional ABL Credit Facility or Facilities (other than Additional ABL Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding Additional ABL Obligations in respect of any Additional ABL Credit Agreement).
“ Requisite [Cash Flow] Holders ” means [Cash Flow] Secured Parties and/or Additional [Cash Flow] Secured Parties holding, in the aggregate, in excess of 50% of the aggregate principal amount of any loans included in the [Cash Flow] Collateral Obligations (other than [Cash Flow] Collateral Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding [Cash Flow] Collateral Obligations in respect of the [Cash Flow] Credit Agreement or any Additional [Cash Flow] Credit Facility); provided that:
(a) if the matter being consented to or the action being taken by the [Cash Flow] Collateral Representative is the subordination of Liens to other Liens, the consent to DIP Financing, or the consent to a sale of all or substantially all of the [Cash Flow] Priority Collateral or (after the Discharge of ABL Collateral Obligations) all or substantially all of the Collateral, then “Requisite [Cash Flow] Holders” means those [Cash Flow] Collateral Secured Parties necessary to validly consent to the requested action in accordance with the applicable [Cash Flow] Documents and Additional [Cash Flow] Documents,
(b) except as may be separately otherwise agreed in writing by and between or among each Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, if the matter being consented to or the action being taken by the [Cash Flow] Collateral Representative will affect the [Cash Flow] Secured Parties in a manner different and materially adverse relative to the manner such matter or action affects any Additional [Cash Flow] Secured Parties (except to the extent expressly set forth in this Agreement), then “Requisite [Cash Flow] Holders” means ( 1 ) Additional [Cash Flow] Secured Parties and/or [Cash Flow] Secured Parties holding, in the aggregate, in excess of 50% of the aggregate principal amount of the [Cash Flow] Collateral Obligations (other than [Cash Flow] Collateral Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding [Cash Flow] Collateral Obligations in respect of the [Cash Flow] Credit Agreement or any Additional [Cash Flow] Credit Facility) and ( 2 ) [Cash Flow] Secured Parties holding, in the aggregate, in excess of 50% of the aggregate principal amount of the [Cash Flow] Obligations (other than [Cash Flow] Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding [Cash Flow] Obligations in respect of the [Cash Flow] Credit Agreement), and
 
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(c) except as may be separately otherwise agreed in writing by and between or among each Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, if the matter being consented to or the action being taken by the [Cash Flow] Collateral Representative will affect any Additional [Cash Flow] Agent or the Additional [Cash Flow] Secured Parties represented thereby in a manner different and materially adverse relative to the manner such matter or action affects the [Cash Flow] Secured Parties or the other Additional [Cash Flow] Secured Parties (except to the extent expressly set forth in this Agreement), then “Requisite [Cash Flow] Holders” means ( 1 ) Additional [Cash Flow] Secured Parties and/or [Cash Flow] Secured Parties holding, in the aggregate, in excess of 50% of the aggregate principal amount of the [Cash Flow] Collateral Obligations (other than [Cash Flow] Collateral Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding [Cash Flow] Collateral Obligations in respect of the [Cash Flow] Credit Agreement or any Additional [Cash Flow] Credit Facility) and ( 2 ) such Additional [Cash Flow] Agent and/or Additional [Cash Flow] Secured Parties represented thereby holding, in the aggregate, in excess of 50% of the aggregate principal amount of the applicable Additional [Cash Flow] Obligations (other than Additional [Cash Flow] Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees at any time and for so long as there are any outstanding Additional [Cash Flow] Obligations in respect of any Additional [Cash Flow] Credit Facility).
“ Right of Last Refusal ” shall have the meaning set forth in Section 6.1(c)(i) .
“ S&P ” means Standard & Poor’s Ratings Group, a division of the McGraw Hill Companies Inc., and its successors.
“ Secured Parties ” means the ABL Secured Parties, the [Cash Flow] Secured Parties and the Additional Secured Parties.
“ Series ” means ( a ) with respect to the [Cash Flow] Collateral Secured Parties, each of ( i ) the [Cash Flow] Secured Parties (in their capacities as such) and ( ii ) the Additional [Cash Flow] Secured Parties that become subject to this Agreement after [                    ] that are represented by a common Additional [Cash Flow] Agent (in its capacity as such for such Additional [Cash Flow] Secured Parties), ( b ) with respect to any [Cash Flow] Collateral Obligations, each of ( i ) the [Cash Flow] Obligations and ( ii ) the Additional [Cash Flow] Obligations incurred pursuant to any Additional [Cash Flow] Credit Facility that is to be represented by a common Additional Agent (in its capacity as such for such Additional [Cash Flow] Obligations), ( c ) with respect to the ABL Collateral Secured Parties, each of ( i ) the ABL Secured Parties (in their capacities as such) and ( ii ) the Additional ABL Secured Parties that become subject to this Agreement after [                    ] that are represented by a common Additional ABL Agent (in its capacity as such for such Additional ABL Secured Parties) and ( d ) with respect to any ABL Collateral Obligations, each of ( i ) the ABL Obligations and ( ii ) the Additional ABL Obligations incurred pursuant to any Additional ABL Credit Facility that is to be represented by a common Additional Agent (in its capacity as such for such Additional ABL Obligations).
“ Specified Default ” means a Specified Default under any ABL Credit Agreement, any [Cash Flow] Credit Agreement or any Additional Credit Facility.
 
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“ Subsidiary ” of any Person means a corporation, partnership, limited liability company, or other entity ( a ) of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned by such Person, or ( b ) the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person and, in the case of this clause (b), which is treated as a consolidated subsidiary for accounting purposes.
“ Temporary Cash Investments ” means any of the following: ( i ) any investment in ( x ) direct obligations of the United States of America, Canada, a member state of the European Union or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Company or a Subsidiary in that country or with such funds, or any agency or instrumentality of any thereof, or obligations guaranteed by the United States of America, Canada or a member state of the European Union or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Company or a Subsidiary in that country or with such funds, or any agency or instrumentality of any of the foregoing, or obligations guaranteed by any of the foregoing or ( y ) direct obligations of any foreign country recognized by the United States of America rated at least “A” by S&P or “A-1” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization as shall be approved by any Agent (other than any Designated Agent), in each case, in its reasonable judgment (or, if there is no continuing Agent other than the Designated Agent, as designated by the Company Representative), ( ii ) overnight bank deposits, and investments in time deposit accounts, certificates of deposit, bankers’ acceptances and money market deposits (or, with respect to foreign banks, similar instruments) maturing not more than one year after the date of acquisition thereof issued by ( x ) any bank or other institutional lender under the ABL Credit Agreement, the [Cash Flow] Credit Agreement or any Additional Credit Facility or any affiliate thereof or ( y ) a bank or trust company that is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital and surplus aggregating in excess of $250.0 million (or the foreign currency equivalent thereof) and whose long term debt is rated at least “A” by S&P or “A-1” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization as shall be approved by any Agent (other than any Designated Agent), in each case, in its reasonable judgment (or, if there is no continuing Agent other than any Designated Agent, as designated by the Company Representative) at the time such Investment is made, ( iii ) repurchase obligations with a term of not more than 30 days for underlying securities or instruments of the types described in clause (i) or (ii) above entered into with a bank meeting the qualifications described in clause (ii) above, ( iv ) Investments in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a Person (other than that of the Company or any of its Subsidiaries), with a rating at the time as of which any Investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or higher) according to S&P (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization as shall be approved by any Agent (other than any Designated Agent), in each case, in its reasonable judgment (or, if there is no continuing
 
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Agent other than any Designated Agent, as designated by the Company Representative), ( v ) Investments in securities maturing not more than one year after the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization as shall be approved by any Agent (other than any Designated Agent), in each case, in its reasonable judgment (or, if there is no continuing Agent other than any Designated Agent, as designated by the Company Representative), ( vi ) Indebtedness or Preferred Stock (other than of the Company or any of its Subsidiaries) having a rating of “A” or higher by S&P or “A2” or higher by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization as shall be approved by any Agent (other than any Designated Agent), in each case, in its reasonable judgment (or, if there is no continuing Agent other than any Designated Agent, as designated by the Company Representative), ( vii ) investment funds investing 95% of their assets in securities of the type described in clauses (i)-(vi) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution), ( viii ) any money market deposit accounts issued or offered by a domestic commercial bank or a commercial bank organized and located in a country recognized by the United States of America, in each case, having capital and surplus in excess of $250.0 million (or the foreign currency equivalent thereof), or investments in money market funds subject to the risk limiting conditions of Rule 2a-7 (or any successor rule) of the Securities and Exchange Commission under the Investment Company Act of 1940, as amended, and ( ix ) similar investments approved by management of the Company Representative in the ordinary course of business.
“ Trade Secret Licenses ” means, with respect to any Credit Party, all United States written license agreements of such Credit Party providing for the grant by or to such Credit Party of any right under any United States trade secrets, including know how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, other than agreements with any Person who is an Affiliate or a Subsidiary of the Company or such Credit Party, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Trade Secrets ” means, with respect to any Credit Party, all of such Credit Party’s right, title and interest in and to all United States trade secrets, including know how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, including ( i ) all income, royalties, damages and payments now or hereafter due and/or payable with respect thereto, including payments under all licenses, non-disclosure agreements and memoranda of understanding entered into in connection therewith, and damages and payments for past or future misappropriations thereof, and ( ii ) the right to sue or otherwise recover for past, present or future misappropriations thereof.
“ Trademark License ” means, with respect to any Credit Party, all United States written license agreements of such Credit Party providing for the grant by or to such Credit Party of any right under any United States trademarks, service marks, trade names, trade dress or other
 
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indicia of trade origin or business identifiers, with any other Person who is not an Affiliate or Subsidiary of such Credit Party, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Trademarks ” means, with respect to any Credit Party, all of such Credit Party’s right, title and interest in and to all United States trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, trademark and service mark registrations, and applications for trademark or service mark registrations (except for “intent to use” applications for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has been filed, it being understood and agreed that the carve out in this parenthetical shall be applicable only if and for so long as a grant of a security interest in such intent to use application would invalidate or otherwise jeopardize such Credit Party’s rights therein), and any renewals thereof, including ( i ) the right to sue or otherwise recover for any and all past, present and future infringements or dilutions thereof, ( ii ) all income, royalties, damages and other payments now or hereafter due and/or payable with respect thereto (including payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof), and ( iii ) all other rights corresponding thereto in the United States and all other rights of any kind whatsoever of such Credit Party accruing thereunder or pertaining thereto in the United States, together in each case with the goodwill of the business connected with the use of, and symbolized by, each such trademark, service mark, trade name, trade dress or other indicia of trade origin or business identifiers.
“ Uniform Commercial Code ” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided that to the extent that the Uniform Commercial Code is used to define any term in any security document and such term is defined differently in differing Articles of the Uniform Commercial Code, the definition of such term contained in Article 9 shall govern; provided , further , that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, publication or priority of, or remedies with respect to, Liens of any Party is governed by the Uniform Commercial Code or foreign personal property security laws as enacted and in effect in a jurisdiction other than the State of New York, the term “Uniform Commercial Code” will mean the Uniform Commercial Code or such foreign personal property security laws as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.
Section 1.3 Rules of Construction . Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof”, “herein”, “hereby”, “hereunder” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, schedule and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements,
 
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substitutions, joinders, and supplements thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any reference herein to the repayment in full of an obligation shall mean the payment in full in cash of such obligation, or in such other manner as may be approved in writing by the requisite holders or representatives in respect of such obligation.
ARTICLE 2
Lien Priority
Section 2.1 Agreement to Subordinate . (a) Notwithstanding ( i ) the date, time, method, manner, or order of grant, attachment, or perfection (including any defect or deficiency or alleged defect or deficiency in any of the foregoing) of any Liens granted to the ABL Agent or the ABL Secured Parties in respect of all or any portion of the Collateral, or of any Liens granted to the [Cash Flow] Agent or the [Cash Flow] Secured Parties in respect of all or any portion of the Collateral, or of any Liens granted to any Additional Agent or any Additional Secured Parties in respect of all or any portion of the Collateral, and regardless of how any such Lien was acquired (whether by grant, statute, operation of law, subrogation or otherwise), ( ii ) the order or time of filing or recordation of any document or instrument for perfecting the Liens in favor of the ABL Agent, the [Cash Flow] Agent or any Additional Agent (or the ABL Secured Parties, the [Cash Flow] Secured Parties or any Additional Secured Parties) in any Collateral, ( iii ) any provision of the Uniform Commercial Code, the Bankruptcy Code or any other applicable law, or of the ABL Documents, the [Cash Flow] Documents or any Additional Documents, ( iv ) whether the ABL Agent, the [Cash Flow] Agent or any Additional Agent, in each case, either directly or through agents, holds possession of, or has control over, all or any part of the Collateral, ( v ) the fact that any such Liens in favor of the ABL Agent or the ABL Secured Parties, the [Cash Flow] Agent or the [Cash Flow] Secured Parties or any Additional Agent or any Additional Secured Parties securing any of the ABL Obligations, the [Cash Flow] Obligations or any Additional Obligations, respectively, are ( x ) subordinated to any Lien securing any obligation of any Credit Party other than the [Cash Flow] Obligations or any Additional [Cash Flow] Obligations (in the case of the ABL Obligations and any Additional ABL Obligations) or the ABL Obligations or any Additional ABL Obligations (in the case of the [Cash Flow] Obligations or any Additional [Cash Flow] Obligations), respectively, or ( y ) otherwise subordinated, voided, avoided, invalidated or lapsed or ( vi ) any other circumstance of any kind or nature whatsoever, the ABL Agent, on behalf of itself and the ABL Secured Parties, the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, and any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, hereby agree that:
(1) any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the [Cash Flow] Agent or any [Cash Flow] Secured Party that secures all or any portion of the [Cash Flow] Obligations, and any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of any Additional [Cash Flow] Agent or any Additional [Cash Flow]
 
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Secured Party that secures all or any portion of the Additional [Cash Flow] Obligations, shall in all respects be junior and subordinate to all Liens granted to the ABL Agent and the ABL Secured Parties in the ABL Priority Collateral to secure all or any portion of the ABL Obligations;
(2) any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the [Cash Flow] Agent or any [Cash Flow] Secured Party that secures all or any portion of the [Cash Flow] Obligations, and any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party that secures all or any portion of the Additional [Cash Flow] Obligations, shall in all respects be junior and subordinate to all Liens granted to any Additional ABL Agent and any Additional ABL Secured Parties in the ABL Priority Collateral to secure all or any portion of any Additional ABL Obligations;
(3) any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the ABL Agent or any ABL Secured Party that secures all or any portion of the ABL Obligations shall in all respects be senior and prior to ( x ) all Liens granted to the [Cash Flow] Agent or any [Cash Flow] Secured Party in the ABL Priority Collateral to secure all or any portion of the [Cash Flow] Obligations and ( y ) all Liens granted to any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Parties in the ABL Priority Collateral to secure all or any portion of the Additional [Cash Flow] Obligations;
(4) any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of any Additional ABL Agent or any Additional ABL Secured Party that secures all or any portion of any Additional ABL Obligations shall in all respects be senior and prior to ( x ) all Liens granted to the [Cash Flow] Agent or any [Cash Flow] Secured Party in the ABL Priority Collateral to secure all or any portion of the [Cash Flow] Obligations and ( y ) all Liens granted to any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Parties in the ABL Priority Collateral to secure all or any portion of the Additional [Cash Flow] Obligations;
(5) any Lien in respect of all or any portion of the [Cash Flow] Priority Collateral now or hereafter held by or on behalf of the ABL Agent or any ABL Secured Party that secures all or any portion of the ABL Obligations, and any Lien in respect of all or any portion of the [Cash Flow] Priority Collateral now or hereafter held by or on behalf of any Additional ABL Agent or any Additional ABL Secured Party that secures all or any portion of the Additional ABL Obligations, shall in all respects be junior and subordinate to all Liens granted to the [Cash Flow] Agent and the [Cash Flow] Secured Parties in the [Cash Flow] Priority Collateral to secure all or any portion of the [Cash Flow] Obligations;
(6) any Lien in respect of all or any portion of the [Cash Flow] Priority Collateral now or hereafter held by or on behalf of the ABL Agent or any ABL Secured Party that secures all or any portion of the ABL Obligations, and any Lien in respect of all or any portion of the [Cash Flow] Priority Collateral now or hereafter held by or on
 
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behalf of any Additional ABL Agent or any Additional ABL Secured Party that secures all or any portion of the Additional ABL Obligations, shall in all respects be junior and subordinate to all Liens granted to any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Parties in the [Cash Flow] Priority Collateral to secure all or any portion of any Additional [Cash Flow] Obligations (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and ( x ) the ABL Agent, on behalf of itself and the ABL Secured Parties and ( y ) such Additional ABL Agent on behalf of itself and the Additional ABL Secured Parties represented thereby, as the case may be);
(7) any Lien in respect of all or any portion of the [Cash Flow] Priority Collateral now or hereafter held by or on behalf of the [Cash Flow] Agent or any [Cash Flow] Secured Party that secures all or any portion of the [Cash Flow] Obligations shall in all respects be senior and prior to all Liens granted to the ABL Agent or any ABL Secured Party in the [Cash Flow] Priority Collateral to secure all or any portion of the ABL Obligations, and all Liens granted to any Additional ABL Agent or any Additional ABL Secured Parties in the [Cash Flow] Priority Collateral to secure all or any portion of the Additional ABL Obligations;
(8) any Lien in respect of all or any portion of the [Cash Flow] Priority Collateral now or hereafter held by or on behalf of any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party that secures all or any portion of the Additional [Cash Flow] Obligations shall in all respects be senior and prior to ( x ) all Liens granted to the ABL Agent or any ABL Secured Party in the [Cash Flow] Priority Collateral to secure all or any portion of the ABL Obligations and ( y ) all Liens granted to any Additional ABL Agent or any Additional ABL Secured Parties in the [Cash Flow] Priority Collateral to secure all or any portion of the Additional ABL Obligations (except in the case of either (x) or (y) as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and ( i ) the ABL Agent, on behalf of itself and the ABL Secured Parties or ( ii ) such Additional ABL Agent on behalf of itself and the Additional ABL Secured Parties represented thereby, as the case may be);
(9) any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of any Additional ABL Agent or any Additional ABL Secured Party that secures all or any portion of the Additional ABL Obligations shall in all respects be pari passu and equal in priority with any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of the ABL Agent or any ABL Secured Party that secures all or any portion of the ABL Obligations (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties);
(10) any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of any Additional ABL Agent or any Additional ABL Secured Party that secures all or any portion of the Additional ABL Obligations shall in all respects be
 
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pari passu and equal in priority with any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of any other Additional ABL Agent or any Additional ABL Secured Party represented by such other Additional ABL Agent that secures all or any portion of the Additional ABL Obligations (except as may be separately otherwise agreed in writing by and between such Additional ABL Agents, in each case on behalf of itself and the Additional ABL Secured Parties represented thereby);
(11) any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party that secures all or any portion of the Additional [Cash Flow] Obligations shall in all respects be pari passu and equal in priority with any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of the [Cash Flow] Agent or any [Cash Flow] Secured Party that secures all or any portion of the [Cash Flow] Obligations (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties); provided , however , that notwithstanding the foregoing, if any Additional [Cash Flow] Agent and any Additional [Cash Flow] Secured Party subordinates itself to any of the ABL Agent, the ABL Secured Parties, any Additional ABL Agent or any Additional ABL Secured Parties with respect to any [Cash Flow] Priority Collateral in a separate writing as permitted by paragraphs (6) and (8) of this Section 2.1(a) then such Additional [Cash Flow] Agent and Additional [Cash Flow] Secured Parties shall not be pari passu with the [Cash Flow] Agent and [Cash Flow] Secured Parties with respect to any [Cash Flow] Priority Collateral so subordinated but rather shall be junior and subordinate to the [Cash Flow] Agent and [Cash Flow] Secured Parties with respect to such [Cash Flow] Priority Collateral; and
(12) any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party that secures all or any portion of the Additional [Cash Flow] Obligations shall in all respects be pari passu and equal in priority with any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of any other Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party represented by such other Additional [Cash Flow] Agent that secures all or any portion of the Additional [Cash Flow] Obligations (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agents, in each case on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby); provided , however , that notwithstanding the foregoing, if any Additional [Cash Flow] Agent and any Additional [Cash Flow] Secured Party subordinates itself to any of the ABL Agent, the ABL Secured Parties, any Additional ABL Agent or Additional ABL Secured Parties with respect to any [Cash Flow] Priority Collateral in a separate writing as permitted by paragraphs (6) and (8) of this Section 2.1(a) then such Additional [Cash Flow] Agent and Additional [Cash Flow] Secured Parties shall not be pari passu with the other Additional [Cash Flow] Agent and the other Additional [Cash Flow] Secured Parties with respect to any [Cash Flow] Priority Collateral so subordinated but rather shall be junior and subordinate to the other Additional [Cash Flow] Agent and the other Additional [Cash Flow] Secured Parties with respect to such [Cash Flow] Priority Collateral.
 
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(b) Notwithstanding any failure by any ABL Secured Party, [Cash Flow] Secured Party or Additional Secured Party to perfect its security interests in the Collateral or any avoidance, invalidation, priming or subordination by any third party or court of competent jurisdiction of the security interests in the Collateral granted to the ABL Secured Parties, the [Cash Flow] Secured Parties or any Additional Secured Parties:
(1) the priority and rights as between the ABL Secured Parties, on the one hand, and the [Cash Flow] Secured Parties, on the other hand, with respect to the Collateral shall be as set forth herein;
(2) the priority and rights as between the ABL Secured Parties, on the one hand, and any Additional Secured Parties, on the other hand, with respect to the Collateral shall be as set forth herein (except as may be separately otherwise agreed in writing by and between any applicable Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties);
(3) the priority and rights as between the [Cash Flow] Secured Parties, on the one hand, and any Additional Secured Parties, on the other hand, with respect to the Collateral shall be as set forth herein (except as may be separately otherwise agreed in writing by and between or among any applicable Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties); and
(4) the priority and rights as between any Additional Agent and the Additional Secured Parties represented thereby, on the one hand, and any other Additional Agent and the Additional Secured Parties represented thereby, on the other hand, with respect to the Collateral shall be as set forth herein (except as may be separately otherwise agreed in writing by and between such Additional Agents, each on behalf of itself and the Additional Secured Parties represented thereby).
(c) The [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, acknowledges and agrees that ( x ) the ABL Agent, for the benefit of itself and the ABL Secured Parties, has been granted Liens upon all of the Collateral in which the [Cash Flow] Agent has been granted Liens and the [Cash Flow] Agent hereby consents thereto and ( y ) any Additional Agent, on behalf of itself and any Additional Secured Parties, may be granted Liens upon all of the Collateral in which the [Cash Flow] Agent has been granted Liens and the [Cash Flow] Agent hereby consents thereto. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, acknowledges and agrees that ( x ) the [Cash Flow] Agent, for the benefit of itself and the [Cash Flow] Secured Parties, has been granted Liens upon all of the Collateral in which the ABL Agent has been granted Liens and the ABL Agent hereby consents thereto and ( y ) any Additional Agent, on behalf of itself and any Additional Secured Parties, may be granted Liens upon all of the Collateral in which the ABL Agent has been granted Liens, and the ABL Agent hereby consents thereto. Any Additional Agent, for and on behalf of itself and any
 
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Additional Secured Parties represented thereby, acknowledges and agrees, concurrently upon becoming a party hereto, that (x) the ABL Agent, for the benefit of itself and the ABL Secured Parties, was granted Liens upon all of the Collateral in which such Additional Agent is being granted Liens and such Additional Agent hereby consents thereto, (y) the [Cash Flow] Agent, for the benefit of itself and the [Cash Flow] Secured Parties, was granted Liens upon all of the Collateral in which such Additional Agent is being granted Liens and such Additional Agent hereby consents thereto and (z) any other Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, may be granted Liens upon all of the Collateral in which such Additional Agent has been granted Liens and such Additional Agent hereby consents thereto. The subordination of Liens by the [Cash Flow] Agent in favor of the ABL Agent and any Additional ABL Agent, by the ABL Agent in favor of the [Cash Flow] Agent and any Additional [Cash Flow] Agent, by any Additional [Cash Flow] Agent in favor of the ABL Agent and any Additional ABL Agent, and by any Additional ABL Agent in favor of the [Cash Flow] Agent and any Additional [Cash Flow] Agent, in each case as set forth herein, shall not be deemed to subordinate the Liens of the [Cash Flow] Agent, the ABL Agent or any Additional Agent to the Liens of any other Person. The provision of pari passu and equal priority as between Liens of the [Cash Flow] Agent and Liens of any Additional [Cash Flow] Agent, or as between Liens of any Additional [Cash Flow] Agent and Liens of any other Additional [Cash Flow] Agent, in each case as set forth herein, shall not be deemed to subordinate the Liens of the [Cash Flow] Agent or any Additional [Cash Flow] Agent to the Liens of any Person other than the ABL Agent and any Additional ABL Agent as and to the extent set forth herein, or to provide that the Liens of the [Cash Flow] Agent or any Additional [Cash Flow] Agent will be pari passu or of equal priority with the Liens of any other Person. The provision of pari passu and equal priority as between Liens of the ABL Agent and Liens of any Additional ABL Agent, or as between Liens of any Additional ABL Agent and Liens of any other Additional ABL Agent, in each case as set forth herein, shall not be deemed to subordinate the Liens of the ABL Agent or any Additional ABL Agent to the Liens of any Person other than the [Cash Flow] Agent and any Additional [Cash Flow] Agent as and to the extent set forth herein, or to provide that the Liens of the ABL Agent or any Additional ABL Agent will be pari passu or of equal priority with the Liens of any other Person.
(d) Lien priority as among the ABL Obligations, the [Cash Flow] Obligations and the Additional Obligations with respect to any Collateral will be governed solely by this Agreement, except as may be separately otherwise agreed in writing by or among any applicable Parties to the extent permitted pursuant to Section 2.1(a) above.
(e) The [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, and each Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, hereby acknowledges and agrees that it is the intention of the [Cash Flow] Collateral Secured Parties of each Series that the holders of [Cash Flow] Collateral Obligations of such Series (and not the [Cash Flow] Collateral Secured Parties of any other Series) bear the risk of ( i ) any determination by a court of competent jurisdiction that ( x ) any of the [Cash Flow] Collateral Obligations of such Series are unenforceable under applicable law or are subordinated to any other obligations (other than another Series of [Cash Flow] Collateral Obligations), ( y ) any of the [Cash Flow] Collateral Obligations of such Series do not have an enforceable security interest in any of the Collateral securing any other Series of [Cash Flow] Collateral Obligations and/or ( z ) any intervening security interest exists securing
 
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any other obligations (other than another Series of [Cash Flow] Collateral Obligations) on a basis ranking prior to the security interest of such Series of [Cash Flow] Collateral Obligations but junior to the security interest of any other Series of [Cash Flow] Collateral Obligations or ( ii ) the existence of any Collateral for any other Series of [Cash Flow] Collateral Obligations that is not also Collateral for the other Series of [Cash Flow] Collateral Obligations (any such condition referred to in the foregoing clauses (i) or (ii) with respect to any Series of [Cash Flow] Collateral Obligations, an “ Impairment ” of such Series). In the event of any Impairment with respect to any Series of [Cash Flow] Collateral Obligations, the results of such Impairment shall be borne solely by the holders of such Series of [Cash Flow] Collateral Obligations, and the rights of the holders of such Series of [Cash Flow] Collateral Obligations (including the right to receive distributions in respect of such Series of [Cash Flow] Collateral Obligations pursuant to Section 4.1 ) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by the holders of the Series of such [Cash Flow] Collateral Obligations subject to such Impairment.
(f) The ABL Agent, for and on behalf of itself and the ABL Secured Parties, and each Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, hereby acknowledges and agrees that, it is the intention of the ABL Collateral Secured Parties of each Series that the holders of ABL Collateral Obligations of such Series (and not the ABL Collateral Secured Parties of any other Series) bear the risk of ( i ) any determination by a court of competent jurisdiction that ( x ) any of the ABL Collateral Obligations of such Series are unenforceable under applicable law or are subordinated to any other obligations (other than another Series of ABL Collateral Obligations), ( y ) any of the ABL Collateral Obligations of such Series do not have an enforceable security interest in any of the Collateral securing any other Series of ABL Collateral Obligations and/or ( z ) any intervening security interest exists securing any other obligations (other than another Series of ABL Collateral Obligations) on a basis ranking prior to the security interest of such Series of ABL Collateral Obligations but junior to the security interest of any other Series of ABL Collateral Obligations or ( ii ) the existence of any Collateral for any other Series of ABL Collateral Obligations that is not also Collateral for the other Series of ABL Collateral Obligations (any such condition referred to in the foregoing clauses (i) or (ii) with respect to any Series of ABL Collateral Obligations, an “ Impairment ” of such Series). In the event of any Impairment with respect to any Series of ABL Collateral Obligations, the results of such Impairment shall be borne solely by the holders of such Series of ABL Collateral Obligations, and the rights of the holders of such Series of ABL Collateral Obligations (including the right to receive distributions in respect of such Series of ABL Collateral Obligations pursuant to Section 4.1 ) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by the holders of the Series of such ABL Collateral Obligations subject to such Impairment.
Section 2.2 Waiver of Right to Contest Liens . (a) The [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of the ABL Agent and the ABL Secured Parties in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in this
 
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Agreement, the [Cash Flow] Agent, for itself and on behalf of the [Cash Flow] Secured Parties, agrees that none of the [Cash Flow] Agent or the [Cash Flow] Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent or any ABL Secured Party under the ABL Documents with respect to the ABL Priority Collateral. Except to the extent expressly set forth in this Agreement, the [Cash Flow] Agent, for itself and on behalf of the [Cash Flow] Secured Parties, hereby waives any and all rights it or the [Cash Flow] Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the ABL Agent or any ABL Secured Party seeks to enforce its Liens in any ABL Priority Collateral.
(b) The [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of any Additional [Cash Flow] Agent and any Additional [Cash Flow] Secured Parties in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). Except to the extent expressly set forth in this Agreement and, for the avoidance of doubt, subject to Section 2.3(g) , the [Cash Flow] Agent, for itself and on behalf of the [Cash Flow] Secured Parties, agrees that none of the [Cash Flow] Agent or the [Cash Flow] Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party under any Additional [Cash Flow] Documents with respect to the Collateral (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). Except to the extent expressly set forth in this Agreement, and, for the avoidance of doubt, subject to Section 2.3(g) , the [Cash Flow] Agent, for itself and on behalf of the [Cash Flow] Secured Parties, hereby waives any and all rights it or the [Cash Flow] Secured Parties may have as a pari   passu lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party seeks to enforce its Liens in any Collateral (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties).
(c) The [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of any Additional ABL Agent and any Additional ABL Secured Parties in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in this Agreement, the [Cash Flow] Agent, for itself and on behalf of the [Cash Flow] Secured Parties, agrees that none of the [Cash Flow] Agent or the [Cash Flow] Secured Parties will take any action that would
 
44

interfere with any Exercise of Secured Creditor Remedies undertaken by any Additional ABL Agent or any Additional ABL Secured Party under any Additional ABL Documents with respect to the ABL Priority Collateral. Except to the extent expressly set forth in this Agreement, the [Cash Flow] Agent, for itself and on behalf of the [Cash Flow] Secured Parties, hereby waives any and all rights it or the [Cash Flow] Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Additional ABL Agent or any Additional ABL Secured Party seeks to enforce its Liens in any ABL Priority Collateral.
(d) The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of any [Cash Flow] Agent and any [Cash Flow] Secured Parties in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Secured Parties, agrees that none of the ABL Agent or the ABL Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the [Cash Flow] Agent or any [Cash Flow] Secured Party under the [Cash Flow] Documents, with respect to the [Cash Flow] Priority Collateral. Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Secured Parties, hereby waives any and all rights it or the ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the [Cash Flow] Agent or any [Cash Flow] Secured Party seeks to enforce its Liens in any [Cash Flow] Priority Collateral.
(e) The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of any Additional [Cash Flow] Agent and any Additional [Cash Flow] Secured Parties in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Secured Parties, agrees that none of the ABL Agent or the ABL Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party under any Additional [Cash Flow] Documents, with respect to the [Cash Flow] Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Secured Parties, hereby waives any and all rights it or the ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Additional [Cash Flow] Agent or any Additional [Cash
 
45

Flow] Secured Party seeks to enforce its Liens in any [Cash Flow] Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties).
(f) The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of any Additional ABL Agent and any Additional ABL Secured Parties in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Except to the extent expressly set forth in this Agreement and, for the avoidance of doubt, subject to Section 2.3(j) , the ABL Agent, for itself and on behalf of the ABL Secured Parties, agrees that none of the ABL Agent or the ABL Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any Additional ABL Agent or any Additional ABL Secured Party under any Additional ABL Documents with respect to the Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Except to the extent expressly set forth in this Agreement, and, for the avoidance of doubt, subject to Section 2.3(j) , the ABL Agent, for itself and on behalf of the ABL Secured Parties, hereby waives any and all rights it or the ABL Secured Parties may have as a pari passu lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Additional ABL Agent or any Additional ABL Secured Party seeks to enforce its Liens in any Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties).
(g) Any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of the ABL Agent and the ABL Secured Parties in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in this Agreement, any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that none of such Additional [Cash Flow] Agent and Additional [Cash Flow] Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent or any ABL Secured Party under the ABL Documents with respect to the ABL Priority Collateral. Except to the extent expressly set forth in this Agreement, any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, hereby waives any and all rights it or such Additional [Cash Flow] Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the ABL Agent or any ABL Secured Party seeks to enforce its Liens in any ABL Priority Collateral.
 
46

(h) Any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of the [Cash Flow] Agent or the [Cash Flow] Secured Parties in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). Except to the extent expressly set forth in this Agreement, and, for the avoidance of doubt, subject to Section 2.3(g) , any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that none of such Additional [Cash Flow] Agent and Additional [Cash Flow] Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the [Cash Flow] Agent or any [Cash Flow] Secured Party under the [Cash Flow] Documents with respect to the Collateral (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). Except to the extent expressly set forth in this Agreement, and subject to Section 2.3(g) , any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, hereby waives any and all rights it or such Additional [Cash Flow] Secured Parties may have as a pari passu lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the [Cash Flow] Agent or any [Cash Flow] Secured Party seeks to enforce its Liens in any Collateral (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties).
(i) Any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of any Additional ABL Agent and any Additional ABL Secured Parties in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in this Agreement, any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that none of such Additional [Cash Flow] Agent and Additional [Cash Flow] Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any Additional ABL Agent or any Additional ABL Secured Party under the Additional ABL Documents with respect to the ABL Priority Collateral. Except to the extent expressly set forth in this Agreement, any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, hereby waives any and all rights it or such Additional [Cash Flow] Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Additional ABL Agent or any Additional ABL Secured Party seeks to enforce its Liens in any ABL Priority Collateral.
 
47

(j) Any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of any other Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Parties represented by such other Additional [Cash Flow] Agent in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agents, in each case on behalf of itself and the Additional Secured Parties represented thereby). Except to the extent expressly set forth in this Agreement, and, for the avoidance of doubt, subject to Section 2.3(g) , any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that none of such Additional [Cash Flow] Agent and Additional [Cash Flow] Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any other Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party represented by such other Additional [Cash Flow] Agent under any applicable Additional Documents with respect to the Collateral (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agents, in each case on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby). Except to the extent expressly set forth in this Agreement, and subject to Section 2.3(g) , any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, hereby waives any and all rights it or such Additional [Cash Flow] Secured Parties may have as a pari passu lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any other Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party represented by such other Additional [Cash Flow] Agent seeks to enforce its Liens in any Collateral (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agents, in each case on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby).
(k) Any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of the [Cash Flow] Agent and the [Cash Flow] Secured Parties in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). Except to the extent expressly set forth in this Agreement, any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that none of such Additional ABL Agent and Additional ABL Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the [Cash Flow] Agent or any [Cash Flow] Secured Party under the [Cash Flow] Documents with respect to the [Cash Flow] Priority Collateral (except as may be separately otherwise agreed in writing by and
 
48

between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). Except to the extent expressly set forth in this Agreement, any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, hereby waives any and all rights it or such Additional ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the [Cash Flow] Agent or any [Cash Flow] Secured Party seeks to enforce its Liens in any [Cash Flow] Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties).
(l) Any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of the ABL Agent or the ABL Secured Parties in respect of the Collateral or the provisions of this Agreement (except, with respect to priority, as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Except to the extent expressly set forth in this Agreement, and subject to Section 2.3(j) , any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that none of such Additional ABL Agent and Additional ABL Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent or any ABL Secured Party under the ABL Documents with respect to the Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Except to the extent expressly set forth in this Agreement, and subject to Section 2.3(j) , any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, hereby waives any and all rights it or such Additional ABL Secured Parties may have as a pari passu lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the ABL Agent or any ABL Secured Party seeks to enforce its Liens in any Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties).
(m) Any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of any Additional [Cash Flow] Agent and any Additional [Cash Flow] Secured Parties in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby). Except to the extent
 
49

expressly set forth in this Agreement, any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that none of such Additional ABL Agent and Additional ABL Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party under the Additional [Cash Flow] Documents with respect to the [Cash Flow] Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby). Except to the extent expressly set forth in this Agreement, any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, hereby waives any and all rights it or such Additional ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party seeks to enforce its Liens in any [Cash Flow] Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby).
(n) Any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability or perfection of the Liens of any other Additional ABL Agent or any Additional ABL Secured Parties represented by such other Additional ABL Agent in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional ABL Agents, in each case on behalf of itself and the Additional ABL Secured Parties represented thereby). Except to the extent expressly set forth in this Agreement, and subject to Section 2.3(j) , any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that none of such Additional ABL Agent and Additional ABL Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any other Additional ABL Agent or any Additional ABL Secured Party represented by such other Additional ABL Agent under any applicable Additional ABL Documents with respect to the Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agents, in each case on behalf of itself and the Additional ABL Secured Parties represented thereby). Except to the extent expressly set forth in this Agreement, and subject to Section 2.3(j) , any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, hereby waives any and all rights it or such Additional ABL Secured Parties may have as a pari passu lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any other Additional ABL Agent or any Additional ABL Secured Party represented by such other Additional ABL Agent seeks to enforce its Liens in any Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agents, in each case on behalf of itself and the Additional ABL Secured Parties represented thereby).
(o) For the avoidance of doubt, the assertion of priority rights established under the terms of this Agreement or in any separate writing between any of the parties hereto shall not be considered a challenge to Lien priority of any Party prohibited by this Section 2.2 .
 
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Section 2.3 Remedies Standstill . (a) The [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, agrees that, until the Discharge of ABL Obligations, neither the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, as applicable) nor any [Cash Flow] Secured Party will, or seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the ABL Priority Collateral without the written consent of the ABL Agent and will not knowingly take, receive or accept any Proceeds of ABL Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled by the [Cash Flow] Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the ABL Collateral Representative. Subject to Section 2.3(b) and Section 2.3(g) hereof, from and after the date upon which the Discharge of ABL Obligations shall have occurred (or prior thereto upon obtaining the written consent of the ABL Agent), the [Cash Flow] Agent or any [Cash Flow] Secured Party may Exercise Any Secured Creditor Remedies under the [Cash Flow] Documents or applicable law as to any ABL Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by the [Cash Flow] Agent or any [Cash Flow] Secured Party is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Notwithstanding anything to the contrary contained herein, the [Cash Flow] Agent or any [Cash Flow] Secured Party may:
(i) file a claim or statement of interest with respect to the [Cash Flow] Obligations; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
(ii) take any action (not adverse to the priority status of the Liens on the ABL Priority Collateral, or the rights of the ABL Agent or any of the ABL Secured Parties to exercise rights, powers and/or remedies in respect thereof, including those under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the ABL Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the [Cash Flow] Secured Parties, including any claims secured by the [Cash Flow] Priority Collateral or the ABL Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the [Cash Flow] Priority Collateral; and
 
51

(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and the ABL Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
(b) The [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, agrees that, until the Discharge of Additional ABL Obligations, neither the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, as applicable) nor any [Cash Flow] Secured Party will, or seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the ABL Priority Collateral without the written consent of each Additional ABL Agent and will not knowingly take, receive or accept any Proceeds of ABL Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled by the [Cash Flow] Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the ABL Collateral Representative. Subject to Section 2.3(a) and Section 2.3(g) hereof, from and after the date upon which the Discharge of Additional ABL Obligations shall have occurred (or prior thereto upon obtaining the written consent of each Additional ABL Agent), the [Cash Flow] Agent or any [Cash Flow] Secured Party may Exercise Any Secured Creditor Remedies under the [Cash Flow] Documents or applicable law as to any ABL Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by the [Cash Flow] Agent or any [Cash Flow] Secured Party is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Notwithstanding anything to the contrary contained herein, the [Cash Flow] Agent or any [Cash Flow] Secured Party may:
(i) file a claim or statement of interest with respect to the [Cash Flow] Obligations; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
(ii) take any action (not adverse to the priority status of the Liens on the ABL Priority Collateral, or the rights of each Additional ABL Agent or any of the Additional ABL Secured Parties to exercise rights, powers and/or remedies in respect thereof, including those under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the ABL Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the [Cash Flow] Secured Parties, including any claims secured by the [Cash Flow] Priority Collateral or the ABL Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
 
52

(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the [Cash Flow] Priority Collateral; and
(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and each Additional ABL Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
(c) The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that until the Discharge of [Cash Flow] Obligations, neither the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) nor any ABL Secured Party will, or seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to the [Cash Flow] Priority Collateral without the written consent of the [Cash Flow] Agent and will not knowingly take, receive or accept any Proceeds of the [Cash Flow] Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of [Cash Flow] Priority Collateral in a Deposit Account controlled by the ABL Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the [Cash Flow] Collateral Representative. Subject to Section 2.3(d) and Section 2.3(j) hereof, from and after the date upon which the Discharge of [Cash Flow] Obligations shall have occurred (or prior thereto upon obtaining the written consent of the [Cash Flow] Agent), the ABL Agent or any ABL Secured Party may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any [Cash Flow] Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by the ABL Agent or any ABL Secured Party is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Notwithstanding anything to the contrary contained herein, the ABL Agent or any ABL Secured Party may:
(i) file a claim or statement of interest with respect to the ABL Obligations; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
(ii) take any action (not adverse to the priority status of the Liens on the [Cash Flow] Priority Collateral, or the rights of the [Cash Flow] Agent or any of the [Cash Flow] Secured Parties to exercise rights, powers and/or remedies in respect thereof, including those
 
53

under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the [Cash Flow] Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the ABL Secured Parties, including any claims secured by the ABL Priority Collateral or the [Cash Flow] Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the ABL Priority Collateral; and
(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and the [Cash Flow] Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
(d) The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that until the Discharge of Additional [Cash Flow] Obligations, neither the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) nor any ABL Secured Party will, or seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to the [Cash Flow] Priority Collateral without the written consent of each Additional [Cash Flow] Agent and will not knowingly take, receive or accept any Proceeds of the [Cash Flow] Priority Collateral (except, in each case, as may be separately otherwise agreed in writing by and between each such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties), it being understood and agreed that the temporary deposit of Proceeds of [Cash Flow] Priority Collateral in a Deposit Account controlled by the ABL Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the [Cash Flow] Collateral Representative. Subject to Section 2.3(c) and Section 2.3(j) hereof, from and after the date upon which the Discharge of Additional [Cash Flow] Obligations shall have occurred (or prior thereto upon obtaining the written consent of each Additional [Cash Flow] Agent), the ABL Agent or any ABL Secured Party may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any [Cash Flow] Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by the ABL Agent
 
54

or any ABL Secured Party is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Notwithstanding anything to the contrary contained herein, the ABL Agent or any ABL Secured Party may:
(i) file a claim or statement of interest with respect to the ABL Obligations; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
(ii) take any action (not adverse to the priority status of the Liens on the [Cash Flow] Priority Collateral, or the rights of each Additional [Cash Flow] Agent or any of the Additional [Cash Flow] Secured Parties to exercise rights, powers and/or remedies in respect thereof, including those under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the [Cash Flow] Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the ABL Secured Parties, including any claims secured by the ABL Priority Collateral or the [Cash Flow] Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the ABL Priority Collateral; and
(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and each Additional [Cash Flow] Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
(e) Any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that until the Discharge of ABL Obligations, neither such Additional [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) nor any such Additional [Cash Flow] Secured Party will, or seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the ABL Priority Collateral without the written consent of the ABL Agent and will not knowingly take, receive or accept any Proceeds of ABL Priority Collateral, it being understood and agreed
 
55

that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled by such Additional [Cash Flow] Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the ABL Collateral Representative. Subject to Section 2.3(f) and Section 2.3(g) hereof, from and after the date upon which the Discharge of ABL Obligations shall have occurred (or prior thereto upon obtaining the written consent of the ABL Agent), any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party may Exercise Any Secured Creditor Remedies under any Additional [Cash Flow] Documents or applicable law as to any ABL Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by any Additional [Cash Flow] Agent or Additional [Cash Flow] Secured Party is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Notwithstanding anything to the contrary contained herein, any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party may:
(i) file a claim or statement of interest with respect to the Additional [Cash Flow] Obligations; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
(ii) take any action (not adverse to the priority status of the Liens on the ABL Priority Collateral, or the rights of the ABL Agent or any of the ABL Secured Parties to exercise rights, powers and/or remedies in respect thereof, including those under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the ABL Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the Additional [Cash Flow] Secured Parties, including any claims secured by the ABL Priority Collateral or the [Cash Flow] Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the ABL Priority Collateral; and
(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and each ABL Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
 
56

(f) Any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that until the Discharge of Additional ABL Obligations, neither such Additional [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) nor any such Additional [Cash Flow] Secured Party will, or seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the ABL Priority Collateral without the written consent of each Additional ABL Agent and will not knowingly take, receive or accept any Proceeds of ABL Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled by such Additional [Cash Flow] Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the ABL Collateral Representative. Subject to Section 2.3(e) and Section 2.3(g) hereof, from and after the date upon which the Discharge of Additional ABL Obligations shall have occurred (or prior thereto upon obtaining the written consent of each Additional ABL Agent), any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party may Exercise Any Secured Creditor Remedies under any Additional [Cash Flow] Documents or applicable law as to any ABL Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by any Additional [Cash Flow] Agent or Additional [Cash Flow] Secured Party is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Notwithstanding anything to the contrary contained herein, any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party may:
(i) file a claim or statement of interest with respect to the Additional [Cash Flow] Obligations; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
(ii) take any action (not adverse to the priority status of the Liens on the ABL Priority Collateral, or the rights of the ABL Agent or any of the ABL Secured Parties to exercise rights, powers and/or remedies in respect thereof, including those under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the ABL Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the Additional [Cash Flow] Secured Parties, including any claims secured by the ABL Priority Collateral or the [Cash Flow] Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the ABL Priority Collateral; and
 
57

(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and each Additional ABL Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
(g) Any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that such Additional [Cash Flow] Agent and such Additional [Cash Flow] Secured Parties will not, and will not seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the Collateral without the written consent of the [Cash Flow] Collateral Representative and will not knowingly take, receive or accept any Proceeds of Collateral (except as may be separately otherwise agreed in writing by and between or among each Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties), it being understood and agreed that the temporary deposit of Proceeds of Collateral in a Deposit Account controlled by such Additional [Cash Flow] Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the [Cash Flow] Collateral Representative; provided that nothing in this sentence shall prohibit any Additional [Cash Flow] Agent from taking such actions in its capacity as [Cash Flow] Collateral Representative, if applicable. The [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, agrees that the [Cash Flow] Agent and the [Cash Flow] Secured Parties will not, and will not seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the Collateral without the written consent of the [Cash Flow] Collateral Representative and will not knowingly take, receive or accept any Proceeds of Collateral (except as may be separately otherwise agreed in writing by and between or among each Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties), it being understood and agreed that the temporary deposit of Proceeds of Collateral in a Deposit Account controlled by the [Cash Flow] Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the [Cash Flow] Collateral Representative; provided that nothing in this sentence shall prohibit the [Cash Flow] Agent from taking such actions in its capacity as [Cash Flow] Collateral Representative, if applicable. Subject to Section 2.3(a) and Section 2.3(b) hereof, the [Cash Flow] Collateral Representative may Exercise Any Secured Creditor Remedies under the [Cash Flow] Priority Collateral Documents or applicable law as to any Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by the [Cash Flow] Collateral Representative is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Each [Cash Flow] Collateral Secured Party hereby appoints the [Cash Flow] Collateral Representative as its agent to exercise all remedies under all [Cash Flow] Collateral Documents and Additional [Cash Flow] Collateral Documents. Notwithstanding anything to the contrary contained herein, the [Cash Flow] Agent or any [Cash Flow] Secured Party and any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party may:
(i) file a claim or statement of interest with respect to the [Cash Flow] Obligations or the Additional [Cash Flow] Obligations respectively; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
 
58

(ii) take any action (not adverse to the priority status of the Liens on the [Cash Flow] Priority Collateral, or the rights of the [Cash Flow] Agent or any of the [Cash Flow] Secured Parties or any Additional [Cash Flow] Agent or any of the Additional [Cash Flow] Secured Parties to exercise rights, powers and/or remedies in respect thereof, including those under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the [Cash Flow] Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the [Cash Flow] Secured Parties or the Additional [Cash Flow] Secured Parties respectively, including any claims secured by the ABL Priority Collateral or the [Cash Flow] Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the ABL Priority Collateral or the [Cash Flow] Priority Collateral; and
(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and the [Cash Flow] Agent and each Additional [Cash Flow] Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
(h) Any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that until the Discharge of [Cash Flow] Obligations, neither such Additional ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) nor any such Additional ABL Secured Party will, or seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the [Cash Flow] Priority Collateral without
 
59

the written consent of the [Cash Flow] Agent and will not knowingly take, receive or accept any Proceeds of [Cash Flow] Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of [Cash Flow] Priority Collateral in a Deposit Account controlled by such Additional ABL Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the [Cash Flow] Collateral Representative. Subject to Section 2.3(i) and Section 2.3(j) hereof, from and after the date upon which the Discharge of [Cash Flow] Obligations shall have occurred (or prior thereto upon obtaining the written consent of the [Cash Flow] Agent), any Additional ABL Agent or any Additional ABL Secured Party may Exercise Any Secured Creditor Remedies under any Additional ABL Documents or applicable law as to any [Cash Flow] Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by any Additional ABL Agent or Additional ABL Secured Party is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Notwithstanding anything to the contrary contained herein, any Additional ABL Agent or any Additional ABL Secured Party may:
(i) file a claim or statement of interest with respect to the Additional ABL Obligations; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
(ii) take any action (not adverse to the priority status of the Liens on the [Cash Flow] Priority Collateral, or the rights of the Additional ABL Agent or any of the Additional ABL Secured Parties to exercise rights, powers, and/or remedies in respect thereof, including those under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the [Cash Flow] Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the Additional ABL Secured Parties, including any claims secured by the ABL Priority Collateral or the [Cash Flow] Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the [Cash Flow] Priority Collateral; and
(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and each [Cash Flow] Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
 
60

(i) Any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that until the Discharge of Additional [Cash Flow] Obligations, neither such Additional ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) nor any such Additional ABL Secured Party will, or seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the [Cash Flow] Priority Collateral without the written consent of each Additional [Cash Flow] Agent and will not knowingly take, receive or accept any Proceeds of [Cash Flow] Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and each Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby), it being understood and agreed that the temporary deposit of Proceeds of [Cash Flow] Priority Collateral in a Deposit Account controlled by such Additional ABL Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the [Cash Flow] Collateral Representative. Subject to Section 2.3(h) and Section 2.3(j) hereof, from and after the date upon which the Discharge of Additional [Cash Flow] Obligations shall have occurred (or prior thereto upon obtaining the written consent of each Additional [Cash Flow] Agent), any Additional ABL Agent or any Additional ABL Secured Party may Exercise Any Secured Creditor Remedies under any Additional ABL Documents or applicable law as to any [Cash Flow] Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by any Additional ABL Agent or Additional ABL Secured Party is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Notwithstanding anything to the contrary contained herein, any Additional ABL Agent or any Additional ABL Secured Party may:
(i) file a claim or statement of interest with respect to the Additional ABL Obligations; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
(ii) take any action (not adverse to the priority status of the Liens on the [Cash Flow] Priority Collateral, or the rights of the Additional ABL Agent or any of the Additional ABL Secured Parties to exercise rights, powers and/or remedies in respect thereof, including those under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the [Cash Flow] Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the Additional ABL Secured Parties, including any claims secured by the ABL Priority Collateral or the [Cash Flow] Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency
 
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Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the [Cash Flow] Priority Collateral; and
(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and each Additional [Cash Flow] Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
(j) Any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that such Additional ABL Agent and such Additional ABL Secured Parties will not, and will not seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the Collateral without the written consent of the ABL Collateral Representative and will not knowingly take, receive or accept any Proceeds of Collateral (except as may be separately otherwise agreed in writing by and between or among each Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties), it being understood and agreed that the temporary deposit of Proceeds of Collateral in a Deposit Account controlled by such Additional ABL Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the ABL Collateral Representative; provided that nothing in this sentence shall prohibit any Additional ABL Agent from taking such actions in its capacity as ABL Collateral Representative, if applicable. The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that the ABL Agent and the ABL Secured Parties will not, and will not seek to, Exercise Any Secured Creditor Remedies (or institute or join in any action or proceeding with respect to the Exercise of Secured Creditor Remedies) with respect to any of the Collateral without the written consent of the ABL Collateral Representative and will not knowingly take, receive or accept any Proceeds of Collateral (except as may be separately otherwise agreed in writing by and between or among each Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties), it being understood and agreed that the temporary deposit of Proceeds of Collateral in a Deposit Account controlled by the ABL Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the ABL Collateral Representative; provided that nothing in this sentence shall prohibit the ABL Agent from taking such actions in its capacity as ABL Collateral Representative, if applicable. Subject to Section 2.3(c) and Section 2.3(d) hereof, the ABL Collateral Representative may Exercise Any Secured Creditor Remedies under the ABL Priority Collateral Documents or applicable law as to any Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Collateral by the ABL Collateral
 
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Representative is at all times subject to the provisions of this Agreement, including Section 4.1 hereof. Each ABL Collateral Secured Party hereby appoints the ABL Collateral Representative as its agent to exercise all remedies under all ABL Collateral Documents and Additional ABL Collateral Documents. Notwithstanding anything to the contrary contained herein, the ABL Agent or any ABL Secured Party and any Additional ABL Agent or any Additional ABL Secured Party may:
(i) file a claim or statement of interest with respect to the ABL Obligations or the Additional ABL Obligations respectively; provided that an Insolvency Proceeding has been commenced by or against any Grantor;
(ii) take any action (not adverse to the priority status of the Liens on the ABL Priority Collateral, or the rights of the ABL Agent or any of the ABL Secured Parties or any Additional ABL Agent or any of the Additional ABL Secured Parties to exercise rights, powers, and/or remedies in respect thereof, including those under Article 6 ) in order to create, prove, perfect, preserve or protect (but not enforce) its Lien on and rights in, and the perfection and priority of its Lien on, any of the ABL Priority Collateral;
(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the ABL Secured Parties or the Additional ABL Secured Parties respectively, including any claims secured by the ABL Priority Collateral or the [Cash Flow] Priority Collateral, if any, in each case in accordance with the terms of this Agreement;
(iv) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction) and, subject to the restrictions set forth in this Section, any pleadings, objections, motions or agreements which assert rights or interests available to secured creditors solely with respect to the ABL Priority Collateral or the [Cash Flow] Priority Collateral; and
(v) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and the ABL Collateral Representative shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn.
(k) Notwithstanding any other provision of this Agreement, nothing contained herein shall be construed to prevent ( i ) the ABL Agent or any ABL Secured Party, or any Additional ABL Agent or any Additional ABL Secured Party or any Additional [Cash Flow]
 
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Agent or any Additional [Cash Flow] Secured Party, from objecting to any proposed retention of Collateral by the [Cash Flow] Agent or any [Cash Flow] Secured Party in full or partial satisfaction of any [Cash Flow] Obligations, ( ii ) the [Cash Flow] Agent or any [Cash Flow] Secured Party, or any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party or any Additional ABL Agent or any Additional ABL Secured Party, from objecting to any proposed retention of Collateral by the ABL Agent or any ABL Secured Party in full or partial satisfaction of any ABL Obligations, ( iii ) the ABL Agent or any ABL Secured Party, or any Additional ABL Agent or any Additional ABL Secured Party or the [Cash Flow] Agent or any [Cash Flow] Secured Party, or any other Additional [Cash Flow] Agent or any other Additional [Cash Flow] Secured Party, from objecting to any proposed retention of Collateral by any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party in full or partial satisfaction of any Additional [Cash Flow] Obligations, or ( iv ) the [Cash Flow] Agent or any [Cash Flow] Secured Party, or any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party or the ABL Agent or any ABL Secured Party, or any other Additional ABL Agent or any other Additional ABL Secured Party, from objecting to any proposed retention of Collateral by any Additional ABL Agent or any Additional ABL Secured Party in full or partial satisfaction of any Additional ABL Obligations.
Section 2.4 Exercise of Rights .
(a) Notice of ABL Agent’s Lien .
(i) Without limiting Section 2.3 hereof, the [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, hereby agrees that, until the Discharge of ABL Obligations, in connection with any Exercise of Secured Creditor Remedies by the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) or any [Cash Flow] Secured Party with respect to any ABL Priority Collateral, the [Cash Flow] Agent or such [Cash Flow] Secured Party, as applicable, shall advise any purchaser or transferee of any ABL Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of the ABL Agent and the ABL Secured Parties, unless the ABL Agent otherwise consents in writing. In addition, the [Cash Flow] Agent agrees, for and on behalf of itself and the [Cash Flow] Secured Parties, that, until the Discharge of ABL Obligations, any notice of any proposed foreclosure or sale of any ABL Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to the ABL Agent’s and the ABL Secured Parties’ prior Liens and that such Liens shall continue as against the ABL Priority Collateral to be sold, unless the ABL Agent otherwise consents in writing.
(ii) Without limiting Section 2.3 hereof, any Additional [Cash Flow] Agent, for and on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, hereby agrees that, until the Discharge of ABL Obligations, in connection with any Exercise of Secured Creditor Remedies by such Additional [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) or any such Additional [Cash Flow] Secured Party with respect to any ABL Priority Collateral,
 
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such Additional [Cash Flow] Agent or Additional [Cash Flow] Secured Party, as applicable, shall advise any purchaser or transferee of any ABL Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of the ABL Agent and the ABL Secured Parties, unless the ABL Agent otherwise consents in writing. In addition, any Additional [Cash Flow] Agent agrees, for and on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, that, until the Discharge of ABL Obligations, any notice of any proposed foreclosure or sale of any ABL Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to the ABL Agent’s and the ABL Secured Parties’ prior Liens and that such Liens shall continue as against the ABL Priority Collateral to be sold, unless the ABL Agent otherwise consents in writing.
(b) Notice of [Cash Flow] Agent’s Lien .
(i) Without limiting Section 2.3 hereof, the ABL Agent, for and on behalf of itself and the ABL Secured Parties, hereby agrees that, until the Discharge of [Cash Flow] Obligations, in connection with any Exercise of Secured Creditor Remedies by the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) or any ABL Secured Party with respect to the [Cash Flow] Priority Collateral, the ABL Agent or such ABL Secured Party, as applicable, shall advise any purchaser or transferee of any [Cash Flow] Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of the [Cash Flow] Agent and the [Cash Flow] Secured Parties, unless the [Cash Flow] Agent otherwise consents in writing. In addition, the ABL Agent agrees, for and on behalf of itself and the ABL Secured Parties, that, until the Discharge of [Cash Flow] Obligations, any notice of any proposed foreclosure or sale of any [Cash Flow] Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to the [Cash Flow] Agent’s and the [Cash Flow] Secured Parties’ prior Liens and that such Liens shall continue as against the [Cash Flow] Priority Collateral to be sold, unless the [Cash Flow] Agent otherwise consents in writing.
(ii) Without limiting Section 2.3 hereof, any Additional ABL Agent, for and on behalf of itself and any Additional ABL Secured Parties represented thereby, hereby agrees that, until the Discharge of [Cash Flow] Obligations, in connection with any Exercise of Secured Creditor Remedies by such Additional ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) or any such Additional ABL Secured Party with respect to any [Cash Flow] Priority Collateral, such Additional ABL Agent or Additional ABL Secured Party, as applicable, shall advise any purchaser or transferee of any [Cash Flow] Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of the [Cash Flow] Agent and the [Cash Flow] Secured Parties, unless the [Cash Flow] Agent otherwise consents in writing. In addition, any Additional ABL Agent agrees, for and on behalf of itself and any Additional ABL Secured Parties represented thereby, that, until the Discharge of [Cash Flow] Obligations, any notice of any proposed foreclosure or sale of any [Cash Flow] Priority Collateral and any other notice in connection with the
 
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Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to the [Cash Flow] Agent’s and the [Cash Flow] Secured Parties’ prior Liens and that such Liens shall continue as against the [Cash Flow] Priority Collateral to be sold, unless the [Cash Flow] Agent otherwise consents in writing.
(c) Notice of Additional [Cash Flow] Agent’s Lien .
(i) Without limiting Section 2.3 hereof, the ABL Agent, for and on behalf of itself and the ABL Secured Parties, hereby agrees that, until the Discharge of Additional [Cash Flow] Obligations, in connection with any Exercise of Secured Creditor Remedies by the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) or any ABL Secured Party with respect to any [Cash Flow] Priority Collateral, the ABL Agent or such ABL Secured Party, as applicable, shall advise any purchaser or transferee of any [Cash Flow] Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of any Additional [Cash Flow] Agent and any Additional [Cash Flow] Secured Parties (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). In addition, the ABL Agent agrees, for and on behalf of itself and the ABL Secured Parties, that, until the Discharge of Additional [Cash Flow] Obligations, any notice of any proposed foreclosure or sale of any [Cash Flow] Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to any Additional [Cash Flow] Agent’s and any Additional [Cash Flow] Secured Parties’ prior Liens and that such Liens shall continue as against the [Cash Flow] Priority Collateral to be sold (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties).
(ii) Without limiting Section 2.3 hereof, any Additional ABL Agent, for and on behalf of itself and any Additional ABL Secured Parties represented thereby, hereby agrees that, until the Discharge of Additional [Cash Flow] Obligations, in connection with any Exercise of Secured Creditor Remedies by such Additional ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) or Additional ABL Secured Party with respect to any ABL Priority Collateral, such Additional ABL Agent or Additional ABL Secured Party, as applicable, shall advise any purchaser or transferee of any [Cash Flow] Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of any Additional [Cash Flow] Agent and any Additional [Cash Flow] Secured Parties (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby). In addition, any Additional ABL Agent agrees, for and on behalf of itself and any Additional ABL Secured Parties represented thereby, that, until the Discharge of Additional [Cash Flow] Obligations, any
 
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notice of any proposed foreclosure or sale of any [Cash Flow] Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to any Additional [Cash Flow] Agent’s and any Additional [Cash Flow] Secured Parties’ prior Liens and that such Liens shall continue as against the [Cash Flow] Priority Collateral to be sold (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby).
(d) Notice of Additional ABL Agent’s Lien .
(i) Without limiting Section 2.3 hereof, the [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, hereby agrees that, until the Discharge of Additional ABL Obligations, in connection with any Exercise of Secured Creditor Remedies by the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) or any [Cash Flow] Secured Party with respect to any ABL Priority Collateral, the [Cash Flow] Agent or such [Cash Flow] Secured Party, as applicable, shall advise any purchaser or transferee of any ABL Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of any Additional ABL Agent and any Additional ABL Secured Parties. In addition, the [Cash Flow] Agent agrees, for and on behalf of itself and the [Cash Flow] Secured Parties, that, until the Discharge of Additional ABL Obligations, any notice of any proposed foreclosure or sale of any ABL Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to any Additional ABL Agent’s and any Additional ABL Secured Parties’ prior Liens and that such Liens shall continue as against the ABL Priority Collateral to be sold.
(ii) Without limiting Section 2.3 hereof, any Additional [Cash Flow] Agent, for and on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, hereby agrees that, until the Discharge of Additional ABL Obligations, in connection with any Exercise of Secured Creditor Remedies by such Additional [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) or Additional [Cash Flow] Secured Party with respect to any ABL Priority Collateral, such Additional [Cash Flow] Agent or Additional [Cash Flow] Secured Party, as applicable, shall advise any purchaser or transferee of any ABL Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of any Additional ABL Agent and any Additional ABL Secured Parties. In addition, any Additional [Cash Flow] Agent agrees, for and on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, that, until the Discharge of Additional ABL Obligations, any notice of any proposed foreclosure or sale of any ABL Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to any Additional ABL Agent’s and any Additional ABL Secured Parties’ prior Liens and that such Liens shall continue as against the ABL Priority Collateral to be sold.
 
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(e) No Other Restrictions .
(i) Except as expressly set forth in this Agreement, each of the [Cash Flow] Agent, the [Cash Flow] Secured Parties, the ABL Agent, the ABL Secured Parties, any Additional Agent and any Additional Secured Parties shall have any and all rights and remedies it may have as a creditor under applicable law, including the right to the Exercise of Secured Creditor Remedies (except as may be separately otherwise agreed in writing by and between or among any applicable Parties, solely as among such Parties and the Secured Parties represented thereby), provided , however , that the Exercise of Secured Creditor Remedies with respect to the Collateral shall be subject to the Lien Priority and to the provisions of this Agreement, including Section 2.3 and Section 4.1 hereof. The ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) may enforce the provisions of the ABL Documents, the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) may enforce the provisions of the [Cash Flow] Documents, any Additional [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) may enforce the provisions of the Additional [Cash Flow] Documents, any Additional ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) may enforce the provisions of the Additional ABL Documents, and each may Exercise Any Secured Creditor Remedies, all in such order and in such manner as each may determine in the exercise of its sole discretion, consistent with the terms of this Agreement and mandatory provisions of applicable law (except as may be separately otherwise agreed in writing by and between or among any applicable Parties, solely as among such Parties and the Secured Parties represented thereby); provided , however , that each of the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable), the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable), any Additional [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) and any Additional ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) agrees to provide to each other such Party copies of any notices that it is required under applicable law to deliver to any Credit Party; provided , further , however , that the ABL Agent’s failure to provide any such copies to any other such Party shall not impair any of the ABL Agent’s rights hereunder or under any of the ABL Documents, the [Cash Flow] Agent’s failure to provide any such copies to any other such Party shall not impair any of the [Cash Flow] Agent’s rights hereunder or under any of the [Cash Flow] Documents, any failure by any Additional [Cash Flow] Agent to provide any such copies to any other such Party shall not impair any of such Additional [Cash Flow] Agent’s rights hereunder or under any of the Additional [Cash Flow] Documents and any failure by any Additional ABL Agent to provide any such copies to any other such Party shall not impair any of such Additional ABL Agent’s rights hereunder or under any of the Additional ABL Documents.
(ii) Each of the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) and the [Cash Flow] Secured Parties agrees that it will not institute or join in any suit, Insolvency Proceeding or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against the ABL Agent or any other ABL Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be
 
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taken by such Person with respect to the Collateral that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken. Each of the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) and the [Cash Flow] Secured Parties agrees that it will not institute or join in any suit, Insolvency Proceeding or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any Additional Agent or any other Additional Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such Person with respect to the Collateral that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken (except as may be separately agreed in writing by and between such Additional Agent and the Additional Secured Parties represented thereby and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties).
(iii) Each of the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) and the ABL Secured Parties agrees that it will not institute or join in any suit, Insolvency Proceeding or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against the [Cash Flow] Agent or any other [Cash Flow] Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such Person with respect to the Collateral that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken. Each of the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) and the ABL Secured Parties agrees that it will not institute or join in any suit, Insolvency Proceeding or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any Additional Agent or any other Additional Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such Person with respect to the Collateral that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties).
(iv) Each of any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative or ABL Collateral Representative, if and as applicable) and each Additional Secured Party agrees that it will not institute or join in any suit, Insolvency Proceeding or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against the ABL Agent or any other ABL Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such Person with respect to the Collateral that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Each of any Additional Agent
 
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(including in its capacity as [Cash Flow] Collateral Representative or ABL Collateral Representative, if and as applicable) and each Additional Secured Party agrees that it will not institute or join in any suit, Insolvency Proceeding or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against the [Cash Flow] Agent or any other [Cash Flow] Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such Person with respect to the Collateral that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). Each of any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative or ABL Collateral Representative, if and as applicable) and each Additional Secured Party represented thereby agrees that it will not institute or join in any suit, Insolvency Proceeding or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any other Additional Agent or any Additional Secured Party represented by such other Additional Agent, seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such Person with respect to the Collateral that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Secured Parties represented thereby).
(f) Release of Liens .
(i) In the event of ( A ) any private or public sale of all or any portion of the ABL Priority Collateral in connection with any Exercise of Secured Creditor Remedies by or with the consent of the ABL Collateral Representative, ( B ) any sale, transfer or other disposition of all or any portion of the ABL Priority Collateral, so long as such sale, transfer or other disposition is then permitted by the ABL Priority Collateral Documents, ( C ) the release of the ABL Collateral Secured Parties’ Lien on all or any portion of the ABL Priority Collateral, which release under clause (C) shall have been approved by the Requisite ABL Holders, in the case of clauses (B) and (C) only to the extent occurring prior to the Discharge of ABL Collateral Obligations and not in connection with a Discharge of ABL Obligations (and irrespective of whether an Event of Default has occurred), or ( D ) the termination and discharge of a subsidiary guaranty in accordance with the terms thereof, ( x ) the [Cash Flow] Agent agrees, on behalf of itself and the [Cash Flow] Secured Parties, that (so long as, if applicable, the net cash proceeds of any such sale, if any, described in clause (A) above are applied as provided in Section 4.1 hereof and there is a corresponding release of the Liens securing the [Cash Flow] Priority Collateral) such sale or release will be free and clear of the Liens on such ABL Priority Collateral securing the [Cash Flow] Obligations, and the [Cash Flow] Agent’s and the [Cash Flow] Secured Parties’ Liens with respect to the ABL Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action and ( y ) any Additional [Cash Flow] Agent agrees, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, that (so long as, if
 
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applicable, the net cash proceeds of any such sale, if any, described in clause (A) above are applied as provided in Section 4.1 hereof and there is a corresponding release of the Liens securing the [Cash Flow] Priority Collateral) such sale or release will be free and clear of the Liens on such ABL Priority Collateral securing the Additional [Cash Flow] Obligations, and such Additional [Cash Flow] Agent’s and the applicable Additional [Cash Flow] Secured Parties’ Liens with respect to the ABL Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action. In furtherance of, and subject to, the foregoing, each of the [Cash Flow] Agent and any Additional [Cash Flow] Agent agrees that it will execute any and all Lien releases or other documents reasonably requested by the ABL Collateral Representative in connection therewith. Each of the [Cash Flow] Agent and any Additional [Cash Flow] Agent hereby appoints the ABL Collateral Representative and any officer or duly authorized person of the ABL Collateral Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Party and in the name of such Party or in the ABL Collateral Representative’s own name, from time to time, in the ABL Collateral Representative’s sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable). In the event of any private or public sale of all or any portion of the ABL Priority Collateral in connection with any Exercise of Secured Creditor Remedies by or with the consent of the ABL Collateral Representative, each Additional ABL Agent agrees, on behalf of the Additional ABL Secured Parties, that (so long as, if applicable, the net cash proceeds of any such sale, if any, are applied as provided in Section 4.1 hereof and there is a corresponding release of the Liens securing the [Cash Flow] Priority Collateral), such sale or release will be free and clear of its Liens on such ABL Priority Collateral securing the Additional ABL Obligations, and the Additional ABL Agent’s and the Additional ABL Secured Parties’ Liens with respect to the ABL Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action. In furtherance of, and subject to, the foregoing, each Additional ABL Agent agrees that it will execute any and all Lien releases or other documents reasonably requested by the ABL Collateral Representative in connection therewith. Each Additional ABL Agent hereby appoints the ABL Collateral Representative and any officer or duly authorized person of the ABL Collateral Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Party and in the name of such Party or in the ABL Collateral Representative’s own name, from time to time, in the ABL Collateral Representative’s sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).
 
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(ii) In the event of ( A ) any private or public sale of all or any portion of the [Cash Flow] Priority Collateral in connection with any Exercise of Secured Creditor Remedies by or with the consent of the [Cash Flow] Collateral Representative, ( B ) any sale, transfer or other disposition of all or any portion of the [Cash Flow] Priority Collateral, so long as such sale, transfer or other disposition is then permitted by the [Cash Flow] Priority Collateral Documents, ( C ) the release of the [Cash Flow] Collateral Secured Parties’ Liens on all or any portion of the [Cash Flow] Priority Collateral, which release under clause (C) shall have been approved by the Requisite [Cash Flow] Holders, in the case of clauses (B) and (C) only to the extent occurring prior to the Discharge of [Cash Flow] Collateral Obligations and not in connection with a Discharge of [Cash Flow] Collateral Obligations (and irrespective of whether an Event of Default has occurred), or ( D ) the termination and discharge of a subsidiary guaranty in accordance with the terms thereof, ( x ) the ABL Agent agrees, on behalf of itself and the ABL Secured Parties, that (so long as, if applicable, the net cash proceeds of any such sale, if any, described in clause (A) above are applied as provided in Section 4.1 hereof and there is a corresponding release of the Liens securing the ABL Priority Collateral) such sale or release will be free and clear of the Liens on such [Cash Flow] Priority Collateral securing the ABL Obligations and the ABL Agent’s and the ABL Secured Parties’ Liens with respect to the [Cash Flow] Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action and ( y ) any Additional ABL Agent agrees, on behalf of itself and any Additional ABL Secured Parties represented thereby, that (so long as, if applicable, the net cash proceeds of any such sale, if any, described in clause (A) above are applied as provided in Section 4.1 hereof and there is a corresponding release of the Liens securing the ABL Priority Collateral) such sale or release will be free and clear of the Liens on such [Cash Flow] Priority Collateral securing the Additional ABL Obligations, and such Additional ABL Agent’s and the applicable Additional ABL Secured Parties’ Liens with respect to the [Cash Flow] Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action. In furtherance of, and subject to, the foregoing, each of the ABL Agent and each Additional ABL Agent agrees that it will execute any and all Lien releases or other documents reasonably requested by the [Cash Flow] Collateral Representative in connection therewith. Each of the ABL Agent and each Additional ABL Agent hereby appoints the [Cash Flow] Collateral Representative and any officer or duly authorized person of the [Cash Flow] Collateral Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Party and in the name of such Party or in the [Cash Flow] Collateral Representative’s own name, from time to time, in the [Cash Flow] Collateral Representative’s sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable). In the event of any private or public sale of all or any portion of the [Cash Flow] Priority Collateral in connection with any Exercise of Secured Creditor Remedies by or with the consent of the [Cash Flow] Collateral Representative, each Additional [Cash Flow] Agent agrees, on behalf of the
 
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Additional [Cash Flow] Secured Parties, that (so long as, if applicable, the net cash proceeds of any such sale, if any, are applied as provided in Section 4.1 hereof and there is a corresponding release of the Liens securing the ABL Priority Collateral), such sale or release will be free and clear of its Liens on such [Cash Flow] Priority Collateral securing the Additional [Cash Flow] Obligations, and the Additional [Cash Flow] Agent’s and the Additional [Cash Flow] Secured Parties’ Liens with respect to the [Cash Flow] Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action. In furtherance of, and subject to, the foregoing, each Additional [Cash Flow] Agent agrees that it will execute any and all Lien releases or other documents reasonably requested by the [Cash Flow] Collateral Representative in connection therewith. Each Additional [Cash Flow] Agent hereby appoints the [Cash Flow] Collateral Representative and any officer or duly authorized person of the [Cash Flow] Collateral Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Party and in the name of such Party or in the [Cash Flow] Collateral Representative’s own name, from time to time, in the [Cash Flow] Collateral Representative’s sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).
Section 2.5 No New Liens . (a) Until the Discharge of ABL Obligations, the parties hereto agree that (except as may be separately otherwise agreed in writing by and between the relevant Agents, each on behalf of itself and the Secured Parties represented thereby):
(i) No [Cash Flow] Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any [Cash Flow] Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein. If any [Cash Flow] Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any [Cash Flow] Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein, then the [Cash Flow] Agent (or the relevant [Cash Flow] Secured Party) shall, without the need for any further consent of any other [Cash Flow] Secured Party and notwithstanding anything to the contrary in any other [Cash Flow] Document, be deemed to also hold and have held such Lien for the benefit of the ABL Agent as security for the ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the ABL Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (i) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any [Cash Flow] Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any [Cash Flow] Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the ABL Documents)).
 
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(ii) No Additional [Cash Flow] Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any Additional [Cash Flow] Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein. If any Additional [Cash Flow] Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any Additional [Cash Flow] Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein, then the relevant Additional [Cash Flow] Agent (or the relevant Additional [Cash Flow] Secured Party) shall, without the need for any further consent of any other Additional [Cash Flow] Secured Party and notwithstanding anything to the contrary in any other Additional [Cash Flow] Document, be deemed to also hold and have held such Lien for the benefit of the ABL Agent as security for the ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the ABL Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (ii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Additional [Cash Flow] Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Additional [Cash Flow] Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the ABL Documents)).
(iii) No Additional ABL Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any Additional ABL Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein. If any Additional ABL Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any Additional ABL Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein, then the relevant Additional ABL Agent (or the relevant Additional ABL Secured Party) shall, without the need for any further consent of any other Additional ABL Secured Party and notwithstanding anything to the contrary in any other Additional ABL Document, be deemed to also hold and have held such Lien for the benefit of the ABL Agent as security for the ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the ABL Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (iii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Additional ABL Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Additional ABL Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the ABL Documents)).
 
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(b) Until the Discharge of [Cash Flow] Obligations, the parties hereto agree that (except as may be separately otherwise agreed in writing by and between the relevant Agents, each on behalf of itself and the Secured Parties represented thereby):
(i) No ABL Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation which assets are not also subject to the Lien of the [Cash Flow] Agent under the [Cash Flow] Documents, subject to the Lien Priority set forth herein. If any ABL Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation which assets are not also subject to the Lien of the [Cash Flow] Agent under the [Cash Flow] Documents, subject to the Lien Priority set forth herein, then the ABL Agent (or the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL Secured Party and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have held such Lien for the benefit of the [Cash Flow] Agent as security for the [Cash Flow] Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the [Cash Flow] Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (i) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any ABL Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any ABL Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the [Cash Flow] Documents)).
(ii) No Additional [Cash Flow] Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any Additional [Cash Flow] Obligation which assets are not also subject to the Lien of the [Cash Flow] Agent under the [Cash Flow] Documents, subject to the Lien Priority set forth herein. If any Additional [Cash Flow] Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any Additional [Cash Flow] Obligation which assets are not also subject to the Lien of the [Cash Flow] Agent under the [Cash Flow] Documents, subject to the Lien Priority set forth herein, then the relevant Additional [Cash Flow] Agent (or the relevant Additional [Cash Flow] Secured Party) shall, without the need for any further consent of any other Additional [Cash Flow] Secured Party and notwithstanding anything to the contrary in any other Additional [Cash Flow] Document, be deemed to also hold and have held such Lien for the benefit of the [Cash Flow] Agent as security for the [Cash Flow] Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the [Cash Flow] Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (ii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Additional [Cash Flow] Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Additional [Cash Flow] Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the applicable [Cash Flow] Documents)).
 
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(iii) No Additional ABL Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any Additional ABL Obligation which assets are not also subject to the Lien of the [Cash Flow] Agent under the [Cash Flow] Documents, subject to the Lien Priority set forth herein. If any Additional ABL Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any Additional ABL Obligation which assets are not also subject to the Lien of the [Cash Flow] Agent under the [Cash Flow] Documents, subject to the Lien Priority set forth herein, then the relevant Additional ABL Agent (or the relevant Additional ABL Secured Party) shall, without the need for any further consent of any other Additional ABL Secured Party and notwithstanding anything to the contrary in any other Additional ABL Document, be deemed to also hold and have held such Lien for the benefit of the [Cash Flow] Agent as security for the [Cash Flow] Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the [Cash Flow] Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (iii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Additional ABL Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Additional ABL Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the [Cash Flow] Documents)).
(c) Until the Discharge of Additional [Cash Flow] Obligations, the parties hereto agree that (except as may be separately otherwise agreed in writing by and between the relevant Agents, each on behalf of itself and the Secured Parties represented thereby):
(i) No ABL Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation which assets are not also subject to the Lien of each Additional [Cash Flow] Agent under the Additional [Cash Flow] Documents, subject to the Lien Priority set forth herein. If any ABL Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation which assets are not also subject to the Lien of each Additional [Cash Flow] Agent under the Additional [Cash Flow] Documents, subject to the Lien Priority set forth herein, then the ABL Agent (or the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL Secured Party and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have held such Lien for the benefit of each Additional [Cash Flow] Agent as security for the Additional [Cash Flow] Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Additional [Cash Flow] Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (i) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any ABL Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any ABL Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the applicable Additional [Cash Flow] Documents)).
 
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(ii) No [Cash Flow] Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any [Cash Flow] Obligation which assets are not also subject to the Lien of each Additional [Cash Flow] Agent under the Additional [Cash Flow] Documents, subject to the Lien Priority set forth herein and except as may be separately otherwise agreed in writing by and between any Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties. If any [Cash Flow] Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any [Cash Flow] Obligation which assets are not also subject to the Lien of each Additional [Cash Flow] Agent under the Additional [Cash Flow] Documents, subject to the Lien Priority set forth herein, then the [Cash Flow] Agent (or the relevant [Cash Flow] Secured Party) shall, without the need for any further consent of any other [Cash Flow] Secured Party and notwithstanding anything to the contrary in any other [Cash Flow] Document be deemed to also hold and have held such Lien for the benefit of each Additional [Cash Flow] Agent as security for the Additional [Cash Flow] Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Additional [Cash Flow] Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (ii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any [Cash Flow] Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any [Cash Flow] Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the applicable Additional [Cash Flow] Documents)).
(iii) No Additional ABL Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any Additional ABL Obligation which assets are not also subject to the Lien of any Additional [Cash Flow] Agent under the Additional [Cash Flow] Documents, subject to the Lien Priority set forth herein. If any Additional ABL Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any Additional ABL Obligation which assets are not also subject to the Lien of any Additional [Cash Flow] Agent under the Additional [Cash Flow] Documents, subject to the Lien Priority set forth herein, then the relevant Additional ABL Agent (or the relevant Additional ABL Secured Party) shall, without the need for any further consent of any other Additional ABL Secured Party and notwithstanding anything to the contrary in any other Additional ABL Document, be deemed to also hold and have held such Lien for the benefit of each Additional [Cash Flow] Agent as security for the Additional [Cash Flow] Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Additional [Cash Flow] Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (iii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Additional ABL Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Additional ABL Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the applicable Additional [Cash Flow] Documents)).
 
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(d) Until the Discharge of Additional ABL Obligations, the parties hereto agree that (except as may be separately otherwise agreed in writing by and between the relevant Agents, each on behalf of itself and the Secured Parties represented thereby):
(i) No ABL Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation which assets are not also subject to the Lien of each Additional ABL Agent under the Additional ABL Documents, subject to the Lien Priority set forth herein and except as may be separately otherwise agreed in writing by and between any Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). If any ABL Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation which assets are not also subject to the Lien of each Additional ABL Agent under the Additional ABL Documents, subject to the Lien Priority set forth herein, then the ABL Agent (or the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL Secured Party and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have held such Lien for the benefit of each Additional ABL Agent as security for the Additional ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Additional ABL Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (i) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any ABL Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any ABL Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the applicable Additional ABL Documents)).
(ii) No [Cash Flow] Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any [Cash Flow] Obligation which assets are not also subject to the Lien of each Additional ABL Agent under the Additional ABL Documents, subject to the Lien Priority set forth herein. If any [Cash Flow] Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any [Cash Flow] Obligation which assets are not also subject to the Lien of each Additional ABL Agent under the Additional ABL Documents, subject to the Lien Priority set forth herein, then the [Cash Flow] Agent (or the relevant [Cash Flow] Secured Party) shall, without the need for any further consent of any other [Cash Flow] Secured Party and notwithstanding anything to the contrary in any other [Cash Flow] Document be deemed to also hold and have held such Lien for the benefit of each Additional ABL Agent as security for the Additional ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Additional ABL Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (ii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any [Cash
 
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Flow] Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any [Cash Flow] Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the applicable Additional ABL Documents)).
(iii) No Additional [Cash Flow] Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any Additional [Cash Flow] Obligation which assets are not also subject to the Lien of any Additional ABL Agent under the Additional ABL Documents, subject to the Lien Priority set forth herein. If any Additional [Cash Flow] Secured Party shall nonetheless acquire or hold any Lien on any assets of any Credit Party securing any Additional [Cash Flow] Obligation which assets are not also subject to the Lien of any Additional ABL Agent under the Additional ABL Documents, subject to the Lien Priority set forth herein, then the relevant Additional [Cash Flow] Agent (or the relevant Additional [Cash Flow] Secured Party) shall, without the need for any further consent of any other Additional [Cash Flow] Secured Party and notwithstanding anything to the contrary in any other Additional [Cash Flow] Document, be deemed to also hold and have held such Lien for the benefit of each Additional ABL Agent as security for the Additional ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Additional ABL Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (iii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Additional [Cash Flow] Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Additional [Cash Flow] Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the applicable Additional ABL Documents)).
(e) No Secured Party shall be deemed to be in breach of this Section 2.5 as a result of any other Secured Party expressly declining, in writing, to acquire, hold or continue to hold any Lien in any asset of any Credit Party.
Section 2.6 Waiver of Marshalling . Until the Discharge of ABL Obligations, the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, and any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees (including in its capacity as [Cash Flow] Collateral Representative, if applicable) not to assert, and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling or other similar right that may otherwise be available under applicable law with respect to the ABL Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.
Until the Discharge of [Cash Flow] Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, and any Additional ABL Agent, on behalf of itself and any
 
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Additional ABL Secured Parties represented thereby, agrees (including in its capacity as ABL Collateral Representative, if applicable) not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling or other similar right that may otherwise be available under applicable law with respect to the [Cash Flow] Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.
Until the Discharge of Additional [Cash Flow] Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, and any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees (including in its capacity as ABL Collateral Representative, if applicable) not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling or other similar right that may otherwise be available under applicable law with respect to the [Cash Flow] Priority Collateral or any other similar rights a junior secured creditor may have under applicable law (except as may be separately otherwise agreed in writing by and between the applicable Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and (x) the ABL Agent, on behalf of itself and the ABL Secured Parties, or (y) the applicable Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, as applicable).
Until the Discharge of Additional ABL Obligations, the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, and any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees (including in its capacity as [Cash Flow] Collateral Representative, if applicable) not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling or other similar right that may otherwise be available under applicable law with respect to the ABL Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.
ARTICLE 3
Actions of the Parties
Section 3.1 Certain Actions Permitted . The [Cash Flow] Agent, the ABL Agent and any Additional Agent may make such demands or file such claims in respect of the [Cash Flow] Obligations, the ABL Obligations or the Additional Obligations, as applicable, as are necessary to prevent the waiver or bar of such claims under applicable statutes of limitations or other statutes, court orders, or rules of procedure at any time.
Section 3.2 Agent for Perfection . The ABL Agent (including in its capacity as ABL Collateral Representative, if applicable), for the benefit of and on behalf of itself and each ABL Secured Party, the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable), for the benefit of and on behalf of itself and each [Cash Flow] Secured Party, and any Additional Agent (including in its capacity as [Cash Flow] Collateral
 
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Representative or ABL Collateral Representative, if and as applicable), for the benefit of and on behalf of itself and each Additional Secured Party represented thereby, as applicable, each agree to hold all Control Collateral and Cash Collateral that is part of the Collateral in their respective possession, custody, or control (or in the possession, custody, or control of agents or bailees for either) as agent for each other solely for the purpose of perfecting the security interest granted to each in such Control Collateral or Cash Collateral, subject to the terms and conditions of this Section 3.2 . None of the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable), the ABL Secured Parties, the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable), the [Cash Flow] Secured Parties, any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative or ABL Collateral Representative, if and as applicable), or any Additional Secured Parties, as applicable, shall have any obligation whatsoever to the others to assure that the Control Collateral or the Cash Collateral is genuine or owned by any Borrower, any Guarantor, or any other Person or to preserve rights or benefits of any Person. The duties or responsibilities of the ABL Agent, the [Cash Flow] Agent and any Additional Agent under this Section 3.2 are and shall be limited solely to holding or maintaining control of the Control Collateral and the Cash Collateral as agent for the other Parties for purposes of perfecting the Lien held by the [Cash Flow] Agent, the ABL Agent or any Additional Agent, as applicable. The ABL Agent is not and shall not be deemed to be a fiduciary of any kind for the [Cash Flow] Agent, the [Cash Flow] Secured Parties, any Additional Agent, any Additional Secured Parties, or any other Person. The [Cash Flow] Agent is not and shall not be deemed to be a fiduciary of any kind for the ABL Agent, the ABL Secured Parties, any Additional Agent, any Additional Secured Parties, or any other Person. Any Additional Agent is not and shall not be deemed to be a fiduciary of any kind for the ABL Agent, the ABL Secured Parties, the [Cash Flow] Agent, the [Cash Flow] Secured Parties, any other Additional Agent or any Additional Secured Parties represented by any other Additional Agent, or any other Person. In the event that (a) the [Cash Flow] Agent or any [Cash Flow] Secured Party receives any Collateral or Proceeds of the Collateral in violation of the terms of this Agreement, (b) the ABL Agent or any ABL Secured Party receives any Collateral or Proceeds of the Collateral in violation of the terms of this Agreement, or (c) any Additional Agent or any Additional Secured Party receives any Collateral or Proceeds of the Collateral in violation of the terms of this Agreement, then the [Cash Flow] Agent, such [Cash Flow] Secured Party, the ABL Agent, such ABL Secured Party, such Additional Agent, or such Additional Secured Party, as applicable, shall promptly pay over such Proceeds or Collateral to (i) in the case of ABL Priority Collateral or Proceeds thereof, the ABL Collateral Representative, or (ii) in the case of [Cash Flow] Priority Collateral or Proceeds thereof, the [Cash Flow] Collateral Representative, in each case, in the same form as received with any necessary endorsements, for application in accordance with the provisions of Section 4.1 of this Agreement. Each Credit Party shall deliver all Control Collateral and all Cash Collateral required to be delivered pursuant to the Credit Documents (i) in the case of ABL Priority Collateral or Proceeds thereof, to the ABL Collateral Representative, or (ii) in the case of [Cash Flow] Priority Collateral or Proceeds thereof, to the [Cash Flow] Collateral Representative.
Section 3.3 Sharing of Information and Access . In the event that the ABL Agent or any Additional ABL Agent shall, in the exercise of its rights under the ABL Collateral Documents, the Additional ABL Collateral Documents or otherwise, receive possession or control of any books and records of any [Cash Flow] Credit Party that contain
 
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information identifying or pertaining to the [Cash Flow] Priority Collateral, such Party shall, upon request of the [Cash Flow] Agent or any Additional [Cash Flow] Agent and as promptly as practicable thereafter, either make available to such requesting Party such books and records for inspection and duplication or provide to such requesting Party copies thereof. In the event that the [Cash Flow] Agent or any Additional [Cash Flow] Agent shall, in the exercise of its rights under the [Cash Flow] Collateral Documents, the Additional [Cash Flow] Collateral Documents or otherwise, receive possession or control of any books and records of any ABL Credit Party that contain information identifying or pertaining to any of the ABL Priority Collateral, such Party shall, upon written request from the ABL Agent or any Additional ABL Agent and as promptly as practicable thereafter, either make available to such requesting Party such books and records for inspection and duplication or provide to such requesting Party copies thereof. Each Credit Party, the [Cash Flow] Agent and each Additional [Cash Flow] Agent hereby consent to the non-exclusive royalty free use by the ABL Agent and any Additional ABL Agent of any Intellectual Property included in the Collateral for the purposes of disposing of any ABL Priority Collateral and, in the event that the [Cash Flow] Agent or any Additional [Cash Flow] Agent shall, in the exercise of its rights under the [Cash Flow] Collateral Documents, the Additional [Cash Flow] Collateral Documents or otherwise, obtain title to any such Intellectual Property, such Party hereby irrevocably grants the ABL Agent and any Additional ABL Agent a non-exclusive license or other right to use, without charge, such Intellectual Property as it pertains to the ABL Priority Collateral in advertising for sale and selling any ABL Priority Collateral.
Section 3.4 Insurance . Proceeds of Collateral include insurance proceeds and, therefore, the Lien Priority shall govern the ultimate disposition of casualty insurance proceeds. The ABL Collateral Representative shall be named as additional insured or loss payee, as applicable, with respect to all insurance policies relating to ABL Priority Collateral and the [Cash Flow] Collateral Representative shall be named as additional insured or loss payee, as applicable, with respect to all insurance policies relating to [Cash Flow] Priority Collateral. The ABL Collateral Representative shall have the sole and exclusive right, as against the [Cash Flow] Collateral Representative, the ABL Agent (other than in its capacity as ABL Collateral Representative, if applicable) and any Additional ABL Agent (other than in its capacity as ABL Collateral Representative, if applicable), to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of ABL Priority Collateral. The [Cash Flow] Collateral Representative shall have the sole and exclusive right, as against the ABL Collateral Representative, the [Cash Flow] Agent (other than in its capacity as [Cash Flow] Collateral Representative, if applicable) and any Additional [Cash Flow] Agent (other than in its capacity as [Cash Flow] Collateral Representative, if applicable), to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of [Cash Flow] Priority Collateral. All proceeds of such insurance shall be remitted to the ABL Collateral Representative or to the [Cash Flow] Collateral Representative, as the case may be, and each of the [Cash Flow] Collateral Representative and the ABL Collateral Representative shall cooperate (if necessary) in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1 hereof.
 
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Section 3.5 No Additional Rights for the Credit Parties Hereunder . Except as provided in Section 3.6 , if any ABL Secured Party, [Cash Flow] Secured Party or Additional Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, the Credit Parties shall not be entitled to use such violation as a defense to any action by any ABL Secured Party, [Cash Flow] Secured Party or Additional Secured Party, nor to assert such violation as a counterclaim or basis for set-off or recoupment against any ABL Secured Party, [Cash Flow] Secured Party or Additional Secured Party.
Section 3.6 Actions upon Breach . If any [Cash Flow] Secured Party, any ABL Secured Party or any Additional Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against the Credit Parties or the Collateral, the Credit Parties, with the prior written consent of the ABL Collateral Representative or the [Cash Flow] Collateral Representative, as applicable, may interpose as a defense or dilatory plea the making of this Agreement, and any ABL Secured Party, [Cash Flow] Secured Party or Additional Secured Party, as applicable, may intervene and interpose such defense or plea in its or their name or in the name of the Credit Parties.
Section 3.7 Inspection Rights . (a) Without limiting any rights the ABL Collateral Representative or any other ABL Collateral Secured Party may otherwise have under applicable law or by agreement, the ABL Collateral Representative and the ABL Collateral Secured Parties may, at any time and whether or not the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) or any other [Cash Flow] Secured Party or any Additional [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) or any other Additional [Cash Flow] Secured Party has commenced and is continuing to Exercise Any Secured Creditor Remedies (the “ ABL Permitted Access Right ”), during normal business hours on any business day, access ABL Priority Collateral that (A) is stored or located in or on, (B) has become an accession with respect to (within the meaning of Section 9-335 of the Uniform Commercial Code), or (C) has been commingled with (within the meaning of Section 9-336 of the Uniform Commercial Code), [Cash Flow] Priority Collateral (collectively, the “ ABL Commingled Collateral ”), for the limited purposes of assembling, inspecting, copying or downloading information stored on, taking actions to perfect its Lien on, completing a production run of inventory involving, taking possession of, moving, selling, storing or otherwise dealing with, or to Exercise Any Secured Creditor Remedies with respect to, the ABL Commingled Collateral, in each case without notice to, the involvement of or interference by any [Cash Flow] Secured Party or Additional [Cash Flow] Secured Party or liability to any [Cash Flow] Secured Party or Additional [Cash Flow] Secured Party, except as specifically provided below. In addition, subject to the terms hereof, the ABL Collateral Representative may advertise and conduct public auctions or private sales of the ABL Priority Collateral without notice to, the involvement of or interference by any [Cash Flow] Secured Party or Additional [Cash Flow] Secured Party (including the [Cash Flow] Collateral Representative) or liability to any [Cash Flow] Secured Party or Additional [Cash Flow] Secured Party (including the [Cash Flow] Collateral Representative). In the event that any ABL Collateral Secured Party has commenced and is continuing to Exercise Any Secured Creditor Remedies with respect to any ABL Commingled Collateral, the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral
 
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Representative, if applicable) and any Additional [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) may not sell, assign or otherwise transfer the related [Cash Flow] Priority Collateral prior to the expiration of the 180-day period commencing on the date such ABL Collateral Secured Party begins to Exercise Any Secured Creditor Remedies, unless the purchaser, assignee or transferee thereof agrees to be bound by the provisions of this Section 3.7 . If any stay or other order that prohibits the ABL Collateral Representative and other ABL Collateral Secured Parties from commencing and continuing to Exercise Any Secured Creditor Remedies with respect to ABL Commingled Collateral has been entered by a court of competent jurisdiction, such 180-day period shall be tolled during the pendency of any such stay or other order. During the period of actual occupation, use and/or control by the ABL Collateral Representative or ABL Collateral Secured Parties (or their respective employees, agents, advisers and representatives) of any [Cash Flow] Priority Collateral, the ABL Collateral Representative and the ABL Collateral Secured Parties shall be obligated to repair at their expense any physical damage (but not any diminution in value) to such [Cash Flow] Priority Collateral resulting from such occupancy, use or control, and to leave such [Cash Flow] Priority Collateral in substantially the same condition as it was at the commencement of such occupancy, use or control, ordinary wear and tear excepted. In no event shall the ABL Collateral Representative or the ABL Collateral Secured Parties have any liability to the [Cash Flow] Agent and/or to the [Cash Flow] Secured Parties or to any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Parties hereunder as a result of any condition (including any environmental condition, claim or liability) on or with respect to the [Cash Flow] Priority Collateral existing prior to the date of the exercise by the ABL Collateral Representative of its rights or the exercise by the ABL Collateral Secured Parties of their rights under this Agreement. The ABL Collateral Representative and ABL Collateral Secured Parties shall cooperate with the [Cash Flow] Collateral Secured Parties and/or the [Cash Flow] Collateral Representative in connection with any efforts made by the [Cash Flow] Collateral Secured Parties and/or the [Cash Flow] Collateral Representative to sell the [Cash Flow] Priority Collateral.
(b) The [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) and the other [Cash Flow] Secured Parties and any Additional [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) and any other Additional [Cash Flow] Secured Parties shall use commercially reasonable efforts to not hinder or obstruct the ABL Collateral Representative and the other ABL Collateral Secured Parties from exercising the ABL Permitted Access Right.
(c) Subject to the terms hereof, the [Cash Flow] Collateral Representative may advertise and conduct public auctions or private sales of the [Cash Flow] Priority Collateral without notice to, the involvement of or interference by any ABL Collateral Secured Party or liability to any ABL Collateral Secured Party.
 
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ARTICLE 4
Application of Proceeds
Section 4.1 Application of Proceeds .
(a) Revolving Nature of ABL Obligations . The [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, and any Additional Agent, for and on behalf of itself and any Additional Secured Parties represented thereby, expressly acknowledge and agree that ( i ) if any ABL Credit Agreement includes a revolving commitment, in the ordinary course of business the ABL Agent and the ABL Secured Parties will apply payments and make advances thereunder, and no application of any Payment Collateral or Cash Collateral or the release of any Lien by the ABL Agent upon any portion of the Collateral in connection with a permitted disposition under any ABL Credit Agreement shall constitute the Exercise of Secured Creditor Remedies under this Agreement; ( ii ) the amount of the ABL Obligations that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, the terms of the ABL Obligations may be modified, extended or amended from time to time, and the aggregate amount of the ABL Obligations may be increased, replaced or refinanced, in each event, without notice to or consent by the [Cash Flow] Secured Parties (in the case of the [Cash Flow] Agent) or the applicable Additional Secured Parties (in the case of such Additional Agent) and without affecting the provisions hereof; and ( iii ) all Payment Collateral or Cash Collateral received by the ABL Agent may be applied, reversed, reapplied, credited, or reborrowed, in whole or in part, to the ABL Obligations at any time; provided , however , that from and after the date on which the ABL Agent (or any ABL Secured Party) commences the Exercise of Secured Creditor Remedies (other than, prior to the acceleration of any of the [Cash Flow] Obligations or any Additional Obligations, the exercise of its rights in accordance with subsection 4.16 of the Original ABL Credit Agreement or any similar provision of any other ABL Credit Agreement), all amounts received by the ABL Agent or any ABL Secured Party as a result of such Exercise of Secured Creditor Remedies shall be applied as specified in this Section 4.1 . The Lien Priority shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of the ABL Obligations, the [Cash Flow] Obligations, or any Additional Obligations, or any portion thereof.
(b) Revolving Nature of [Cash Flow] Obligations. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, and any Additional Agent, for and on behalf of itself and any Additional Secured Parties represented thereby, expressly acknowledge and agree that ( i ) any [Cash Flow] Credit Agreement may include a revolving commitment, and in the ordinary course of business the [Cash Flow] Agent and any [Cash Flow] Secured Parties may apply payments and make advances thereunder; and ( ii ) the amount of [Cash Flow] Obligations that may be outstanding thereunder at any time or from time to time may be increased or reduced and subsequently reborrowed, the terms of [Cash Flow] Obligations thereunder may be modified, extended or amended from time to time, and the aggregate amount of [Cash Flow] Obligations thereunder may be increased, replaced or refinanced, in each event, without notice to or consent by the ABL Secured Parties (in the case of the ABL Agent) or any Additional Secured Parties (in the case of any other Additional Agent) and without affecting the provisions hereof; provided , however , that from and after the date on which the [Cash Flow] Agent or any [Cash Flow] Secured Party commences the Exercise of Secured Creditor Remedies, all amounts received by the [Cash Flow] Agent or any [Cash Flow] Secured Party as a result of such Exercise of Secured Creditor Remedies shall be applied as specified in this Section 4.1 . The Lien Priority shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of the ABL Obligations or any Additional Obligations, or any portion thereof.
 
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(c) Revolving Nature of Additional Obligations . The [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, and the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and any Additional Agent, for and on behalf of itself and any Additional Secured Parties represented thereby, expressly acknowledge and agree that ( i ) Additional Credit Facilities may include a revolving commitment, and in the ordinary course of business any Additional Agent and Additional Secured Parties may apply payments and make advances thereunder; and ( ii ) the amount of Additional Obligations that may be outstanding thereunder at any time or from time to time may be increased or reduced and subsequently reborrowed, the terms of Additional Obligations thereunder may be modified, extended or amended from time to time, and the aggregate amount of Additional Obligations thereunder may be increased, replaced or refinanced, in each event, without notice to or consent by the [Cash Flow] Secured Parties (in the case of the [Cash Flow] Agent), the ABL Secured Parties (in the case of the ABL Agent) or any Additional Secured Parties (in the case of any other Additional Agent) and without affecting the provisions hereof; provided , however , that from and after the date on which any Additional Agent or Additional Secured Party commences the Exercise of Secured Creditor Remedies, all amounts received by any such Additional Agent or Additional Secured Party as a result of such Exercise of Secured Creditor Remedies shall be applied as specified in this Section 4.1 . The Lien Priority shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of the ABL Obligations, the [Cash Flow] Obligations, or any Additional Obligations, or any portion thereof.
(d) Application of Proceeds of ABL Priority Collateral . The ABL Agent, the [Cash Flow] Agent and any Additional Agent hereby agree that all ABL Priority Collateral, and all Proceeds thereof, received by any of them in connection with any Exercise of Secured Creditor Remedies shall be applied, subject to Section 4.1(h) and Section 2.1(f) ,
first , to the payment of costs and expenses of the ABL Agent, the [Cash Flow] Agent or any Additional Agent, as applicable, in connection with such Exercise of Secured Creditor Remedies,
second , to the payment of ( x ) the ABL Obligations in accordance with the ABL Credit Agreement until the Discharge of ABL Obligations and ( y ) any Additional ABL Obligations in accordance with the applicable Additional ABL Credit Facility until the Discharge of Additional ABL Obligations, which payment shall be made between and among the ABL Obligations and any Additional ABL Obligations on a pro rata basis (except ( i ) with respect to allocation of payments between the ABL Obligations and any Additional ABL Obligations, as may be separately otherwise agreed in writing by and between the applicable Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties, and ( ii ) with respect to allocation of payments among Additional ABL Agents, as may be separately otherwise agreed in writing by and between or among any applicable Additional ABL Agents, in each case on behalf of itself and the Additional ABL Secured Parties represented thereby),
third , to the payment of ( x ) the [Cash Flow] Obligations and in accordance with the [Cash Flow] Credit Agreement until the Discharge of [Cash Flow] Obligations and
 
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( y ) any Additional [Cash Flow] Obligations in accordance with the applicable Additional [Cash Flow] Credit Facility until the Discharge of Additional [Cash Flow] Obligations, which payment shall be made between and among the [Cash Flow] Obligations and any Additional [Cash Flow] Obligations on a pro   rata basis (except ( i ) with respect to allocation of payments between the [Cash Flow] Obligations and any Additional [Cash Flow] Obligations, as may be separately otherwise agreed in writing by and between the applicable Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, and ( ii ) with respect to allocation of payments among Additional [Cash Flow] Agents, as may be separately otherwise agreed in writing by and between or among any applicable Additional [Cash Flow] Agents, in each case on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby), and
fourth , the balance, if any, to the Credit Parties or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.
The ABL Canadian Collateral shall be applied to the payment of the ABL Obligations secured thereby in accordance with the ABL Documents until the Discharge of ABL Obligations (to the extent secured thereby) shall have occurred.
Each ABL Agent, Additional ABL Agent, [Cash Flow] Agent and Additional [Cash Flow] Agent shall provide the ABL Collateral Representative and the [Cash Flow] Collateral Representative with such information about the ABL Collateral Obligations or [Cash Flow] Collateral Obligations represented by it as they may reasonably request in order to carry out the purposes of this Section 4.1 .
(e) Application of Proceeds of [Cash Flow] Priority Collateral . The ABL Agent, the [Cash Flow] Agent and any Additional Agent hereby agree that all [Cash Flow] Priority Collateral, and all Proceeds thereof, received by any of them in connection with any Exercise of Secured Creditor Remedies shall be applied,
first , to the payment of costs and expenses of the ABL Agent, the [Cash Flow] Agent or any Additional Agent, as applicable, in connection with such Exercise of Secured Creditor Remedies,
second , to the payment of ( x ) the [Cash Flow] Obligations in accordance with the [Cash Flow] Credit Agreement until the Discharge of [Cash Flow] Obligations and ( y ) any Additional [Cash Flow] Obligations in accordance with the applicable Additional [Cash Flow] Credit Facility until the Discharge of Additional [Cash Flow] Obligations, which payment shall be made between and among the [Cash Flow] Obligations and any Additional [Cash Flow] Obligations on a pro rata basis (except ( i ) with respect to allocation of payments between the [Cash Flow] Obligations and any Additional [Cash Flow] Obligations, as may be separately otherwise agreed in writing by and between the applicable Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, and ( ii ) with respect to allocation of payments among Additional [Cash Flow] Agents, as may be separately otherwise agreed in writing by and between or among any applicable Additional [Cash Flow] Agents, in each case on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby),
 
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third , to the payment of ( x ) the ABL Obligations in accordance with the ABL Credit Agreement until the Discharge of ABL Obligations and ( y ) any Additional ABL Obligations in accordance with the applicable Additional ABL Credit Facility until the Discharge of Additional ABL Obligations, which payment shall be made between and among the ABL Obligations and any Additional ABL Obligations on a pro rata basis (except ( i ) with respect to allocation of payments between the ABL Obligations and any Additional ABL Obligations, as may be separately otherwise agreed in writing by and between the applicable Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties, and ( ii ) with respect to allocation of payments among Additional ABL Agents, as may be separately otherwise agreed in writing by and between or among any applicable Additional ABL Agents, in each case on behalf of itself and the Additional ABL Secured Parties represented thereby), and
fourth , the balance, if any, to the Credit Parties or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct,
except, in the case of application of [Cash Flow] Priority Collateral and Proceeds thereof ( i ) as between Additional [Cash Flow] Obligations and ABL Obligations, as may be separately otherwise agreed in writing by and between any applicable Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties, and ( ii ) as between Additional [Cash Flow] Obligations and Additional ABL Obligations, as may be separately otherwise agreed in writing by and between any applicable Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and any applicable Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, in each case with respect to the Additional [Cash Flow] Obligations owing to any of such Additional [Cash Flow] Agent and Additional [Cash Flow] Secured Parties. Each ABL Agent, Additional ABL Agent, [Cash Flow] Agent and Additional [Cash Flow] Agent shall provide the ABL Collateral Representative and the [Cash Flow] Collateral Representative with such information about the ABL Collateral Obligations or [Cash Flow] Collateral Obligations represented by it as they may reasonably request in order to carry out the purposes of this Section 4.1 .
(f) Limited Obligation or Liability .
(i) In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) shall have no obligation or liability to the [Cash Flow] Agent or any [Cash Flow] Secured Party regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement. In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) shall have no obligation or liability to any Additional Agent or any Additional Secured Party, regarding the adequacy of any Proceeds or for any
 
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action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties).
(ii) In exercising remedies, whether as a secured creditor or otherwise, the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) shall have no obligation or liability to the ABL Agent or any ABL Secured Party regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement. In exercising remedies, whether as a secured creditor or otherwise, the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) shall have no obligation or liability to any Additional Agent or any Additional Secured Party, regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties).
(iii) In exercising remedies, whether as a secured creditor or otherwise, any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative or ABL Collateral Representative, if and as applicable) shall have no obligation or liability to the ABL Agent or any ABL Secured Party regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). In exercising remedies, whether as a secured creditor or otherwise, any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative or ABL Collateral Representative, if and as applicable) shall have no obligation or liability to the [Cash Flow] Agent or any [Cash Flow] Secured Party regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). In exercising remedies, whether as a secured creditor or otherwise, any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative or ABL Collateral Representative, if and as applicable) shall have no obligation or liability to any other Additional Agent or any Additional Secured Parties represented by such other Additional Agent regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Secured Parties represented thereby).
 
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(g) Turnover of Cash Collateral After Discharge . Upon the Discharge of ABL Collateral Obligations, the ABL Collateral Representative shall deliver to the [Cash Flow] Collateral Representative or shall execute such documents as the Company Representative or the [Cash Flow] Collateral Representative may reasonably request to enable the [Cash Flow] Collateral Representative to have control over any Control Collateral or Cash Collateral still in the ABL Collateral Representative’s possession, custody, or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct. As between ( i ) the [Cash Flow] Collateral Representative and ( ii ) the [Cash Flow] Agent and any Additional [Cash Flow] Agent (other than the [Cash Flow] Collateral Representative), any such Control Collateral or Cash Collateral held by the [Cash Flow] Collateral Representative shall be held by it subject to the terms and conditions of Section 3.2 . Upon the Discharge of [Cash Flow] Collateral Obligations, the [Cash Flow] Collateral Representative shall deliver to the ABL Collateral Representative or shall execute such documents as the Company Representative or the ABL Collateral Representative may reasonably request to enable the ABL Collateral Representative to have control over any Control Collateral or Cash Collateral still in the [Cash Flow] Collateral Representative’s possession, custody or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct. As between ( i ) the ABL Collateral Representative and ( ii ) the ABL Agent and any Additional ABL Agent (other than the ABL Collateral Representative), any such Control Collateral or Cash Collateral held by the ABL Collateral Representative shall be held by it subject to the terms and conditions of Section 3.2 .
(h) Intervening Creditor . Notwithstanding anything in Sections 4.1(d) or (e)  to the contrary, ( i ) with respect to any Collateral for which a third party (other than a [Cash Flow] Collateral Secured Party) has a Lien or security interest that is junior in priority to the Lien or security interest of any Series of [Cash Flow] Collateral Obligations but senior (as determined by appropriate legal proceedings in the case of any dispute) to the Lien or security interest of any other Series of [Cash Flow] Collateral Obligations (such third party, an “ Intervening [Cash Flow] Creditor ”), the value of any Collateral or Proceeds which are allocated to such Intervening [Cash Flow] Creditor shall be deducted on a ratable basis solely from the Collateral or Proceeds thereof to be distributed in respect of the Series of [Cash Flow] Collateral Obligations with respect to which such Impairment exists and ( ii ) with respect to any Collateral for which a third party (other than an ABL Collateral Secured Party) has a Lien or security interest that is junior in priority to the Lien or security interest of any Series of ABL Collateral Obligations but senior (as determined by appropriate legal proceedings in the case of any dispute) to the Lien or security interest of any other Series of ABL Collateral Obligations (such third party, an “ Intervening ABL Secured Party ”), the value of any Collateral or Proceeds which are allocated to such Intervening ABL Secured Party shall be deducted on a ratable basis solely from the Collateral or Proceeds thereof to be distributed in respect of the Series of ABL Collateral Obligations with respect to which such Impairment exists. In the event that any ABL Collateral Secured Party turns over any proceeds of [Cash Flow] Priority Collateral to any [Cash Flow] Collateral Secured Party as required by Section 4.1 , such ABL Collateral Secured Party shall be subrogated to the rights of such [Cash Flow] Collateral Secured Parties; provided , however , that any such subrogation shall be subject to Section 7.1 hereof. In the event that any [Cash Flow] Collateral
 
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Secured Party turns over any proceeds of ABL Priority Collateral to any ABL Collateral Secured Party as required by Section 4.1 , such [Cash Flow] Collateral Secured Party shall be subrogated to the rights of such ABL Collateral Secured Parties; provided , however , that any such subrogation shall be subject to Section 7.1 hereof.
Section 4.2 Specific Performance . Each of the ABL Agent, the [Cash Flow] Agent and any Additional Agent is hereby authorized to demand specific performance of this Agreement, whether or not any Credit Party shall have complied with any of the provisions of any of the Credit Documents, at any time when any other Party shall have failed to comply with any of the provisions of this Agreement applicable to it. Each of the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable), for and on behalf of itself and the ABL Secured Parties, the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable), for and on behalf of itself and the [Cash Flow] Secured Parties, and any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative or ABL Collateral Representative, if and as applicable), for and on behalf of itself and any Additional Secured Parties represented thereby, hereby irrevocably waives any defense based on the adequacy of a remedy at law that might be asserted as a bar to such remedy of specific performance.
Section 4.3 Sale of Collateral Comprising Both ABL Priority Collateral and [Cash Flow] Priority Collateral; Certain Proceeds of Capital Stock or Intercompany Loans . In the event that prior to the Discharge of ABL Obligations, or Discharge of Additional ABL Obligations, proceeds of the Collateral are received in connection with a Disposition, loss, condemnation or other disposition (whether voluntary or involuntary) of Collateral that involves both ABL Priority Collateral and [Cash Flow] Priority Collateral, for the purposes of this Agreement with respect to such Disposition, loss, condemnation or other disposition, the ABL Collateral Representative and the [Cash Flow] Collateral Representative shall use commercially reasonable efforts in good faith to allocate the Proceeds received in connection with such Disposition, loss, condemnation or other disposition of such Collateral to the ABL Priority Collateral and the [Cash Flow] Priority Collateral. If the ABL Collateral Representative and the [Cash Flow] Collateral Representative are unable to agree on such allocation within five Business Days (or such other period of time as the ABL Collateral Representative and the [Cash Flow] Collateral Representative agree) of the consummation of such Disposition, loss, condemnation or other disposition, ( i ) the ABL Priority Collateral comprised in such Collateral consisting of Accounts (as described in sub-clause (1) of the definition of “ABL Priority Collateral” but excluding any Accounts to the extent excluded pursuant to the parenthetical in such sub-clause (1) as provided for therein) shall be deemed to have a valuation equal to the net book value of each such Account (the “ Accounts Amount ”) and ( ii ) the ABL Priority Collateral comprised in such Collateral consisting of Inventory shall be deemed to have a value equal to the net book value of such Inventory (the “ Inventory Amount ”, and together with the Accounts Amount, the “ ABL Amount ”), in each case determined at the time of such Disposition, loss, condemnation or disposition, and such Proceeds shall constitute ( 1 ) first, in an amount equal to the ABL Amount, ABL Priority Collateral and ( 2 ) second, to the extent of any balance remaining in excess of the ABL Amount, [Cash Flow] Priority Collateral,
 
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provided that to the extent that the ABL Priority Collateral subject to such Disposition, loss, condemnation or other disposition includes assets other than Accounts and Inventory, at the option of the ABL Collateral Representative, the appraised value of such other assets may be used for the purposes of the allocation of such Proceeds to the ABL Priority Collateral based on the then most current satisfactory appraisal received by the ABL Collateral Representative with respect thereto. In the event that proceeds are received in connection with a Disposition of all or substantially all of the Capital Stock issued by any Grantor or any amounts are received in respect of Capital Stock of, or Intercompany Loans issued by, any Grantor in an Insolvency Proceeding, such amounts shall be deemed to be proceeds received from a Disposition of ABL Priority Collateral and [Cash Flow] Priority Collateral (in proportion to ABL Priority Collateral and [Cash Flow] Priority Collateral owned at such time by the Grantor) and shall be applied as provided in the preceding sentence. It is understood and agreed that any Intellectual Property shall not be subject to this Section 4.3 and shall constitute ABL Priority Collateral.
ARTICLE 5
Intercreditor Acknowledgements and Waivers
Section 5.1 Notice of Acceptance and Other Waivers . (a) All ABL Obligations at any time made or incurred by any Credit Party shall be deemed to have been made or incurred in reliance upon this Agreement, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, and any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, hereby waive notice of acceptance of, or proof of reliance by the ABL Agent or any ABL Secured Party on, this Agreement, and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the ABL Obligations. All [Cash Flow] Obligations at any time made or incurred by any Credit Party shall be deemed to have been made or incurred in reliance upon this Agreement, and the ABL Agent, on behalf of itself and the ABL Secured Parties, and any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, hereby waive notice of acceptance, or proof of reliance, by the [Cash Flow] Agent or any [Cash Flow] Secured Party of this Agreement, and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the [Cash Flow] Obligations. All Additional Obligations at any time made or incurred by any Credit Party shall be deemed to have been made or incurred in reliance upon this Agreement, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, the ABL Agent, on behalf of itself and any ABL Secured Parties, and any other Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, hereby waive notice of acceptance, or proof of reliance by any Additional Agent or any Additional Secured Parties of this Agreement, and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the Additional Obligations.
(b) None of the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable), any ABL Secured Party, or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the [Cash Flow] Agent or any [Cash Flow] Secured Party for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard
 
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to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If the ABL Agent or any ABL Secured Party honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any ABL Credit Agreement or any of the other ABL Documents, whether the ABL Agent or any ABL Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any [Cash Flow] Credit Agreement or any other [Cash Flow] Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the ABL Agent or any ABL Secured Party otherwise should exercise any of its contractual rights or remedies under any ABL Documents (subject to the express terms and conditions hereof), neither the ABL Agent nor any ABL Secured Party shall have any liability whatsoever to the [Cash Flow] Agent or any [Cash Flow] Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The ABL Agent and the ABL Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under any ABL Credit Agreement and any of the other ABL Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that the [Cash Flow] Agent or any [Cash Flow] Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement. The [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, agrees that neither the ABL Agent nor any ABL Secured Party shall incur any liability as a result of a sale, lease, license, application, or other disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement.
(c) None of the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable), any ABL Secured Party, or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to any Additional Agent or any Additional Secured Party for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). If the ABL Agent or any ABL Secured Party honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any ABL Credit Agreement or any of the other ABL Documents, whether the ABL Agent or any ABL Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any Additional Credit Facility or any other Additional Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the ABL Agent or any ABL Secured Party otherwise should exercise any of its contractual rights or remedies under any ABL Documents (subject to the express terms and conditions hereof), neither the ABL Agent nor any ABL Secured Party shall have any liability whatsoever to any Additional Agent or any Additional Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement) (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties
 
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represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). The ABL Agent and the ABL Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under any ABL Credit Agreement and any of the other ABL Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that any Additional Agent or any Additional Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, agrees that neither the ABL Agent nor any ABL Secured Party shall incur any liability as a result of a sale, lease, license, application, or other disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties).
(d) None of the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable), the [Cash Flow] Secured Parties or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the ABL Agent or any ABL Secured Party for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If the [Cash Flow] Agent or any [Cash Flow] Secured Party honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any [Cash Flow] Credit Agreement or any of the other [Cash Flow] Documents, whether the [Cash Flow] Agent or any [Cash Flow] Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any ABL Credit Agreement or any other ABL Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the [Cash Flow] Agent or any [Cash Flow] Secured Party otherwise should exercise any of its contractual rights or remedies under the [Cash Flow] Documents (subject to the express terms and conditions hereof), neither the [Cash Flow] Agent nor any [Cash Flow] Secured Party shall have any liability whatsoever to the ABL Agent or any ABL Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The [Cash Flow] Agent and the [Cash Flow] Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the [Cash Flow] Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that the ABL Agent or any ABL Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement. The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that none of the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) or the [Cash Flow] Secured Parties shall incur any liability as a result of a sale, lease, license, application, or other disposition of the Collateral or any part or Proceeds thereof, pursuant to the [Cash Flow] Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement.
 
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(e) None of the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable), the [Cash Flow] Secured Parties or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to any Additional Agent or any Additional Secured Party for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). If the [Cash Flow] Agent or any [Cash Flow] Secured Party honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any [Cash Flow] Credit Agreement or any of the other [Cash Flow] Documents, whether the [Cash Flow] Agent or any [Cash Flow] Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any Additional Credit Facility or any other Additional Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the [Cash Flow] Agent or any [Cash Flow] Secured Party otherwise should exercise any of its contractual rights or remedies under the [Cash Flow] Documents (subject to the express terms and conditions hereof), neither the [Cash Flow] Agent nor any [Cash Flow] Secured Party shall have any liability whatsoever to any Additional Agent or any Additional Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement) (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). The [Cash Flow] Agent and the [Cash Flow] Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the [Cash Flow] Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that any Additional Agent or any Additional Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). Any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, agrees that none of the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable) or the [Cash Flow] Secured Parties shall incur any liability as a result of a sale, lease, license, application, or other disposition of the Collateral or any part or Proceeds thereof, pursuant to the [Cash Flow] Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties).
 
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(f) None of any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative, if and as applicable), any Additional Secured Parties or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the ABL Agent or any ABL Secured Party for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). If any Additional Agent or any Additional Secured Party honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any Additional Credit Facility or any of the other Additional Documents, whether such Additional Agent or any Additional Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any ABL Credit Agreement or any other ABL Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if any Additional Agent or any Additional Secured Party otherwise should exercise any of its contractual rights or remedies under the Additional Documents (subject to the express terms and conditions hereof), neither such Additional Agent nor any Additional Secured Party shall have any liability whatsoever to the ABL Agent or any ABL Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement) (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Any Additional Agent and any Additional Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Additional Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that the ABL Agent or any ABL Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that none of any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative, if and as applicable) or any Additional Secured Parties shall incur any liability as a result of a sale, lease, license, application, or other disposition of the Collateral or any part or Proceeds thereof, pursuant to the Additional Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties).
(g) None of any Additional Agent (including in its capacity as ABL Collateral Representative, if and as applicable), any Additional Secured Parties or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the [Cash Flow] Agent or any [Cash Flow] Secured Party for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever
 
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with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). If any Additional Agent or any Additional Secured Party honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any Additional Credit Facility or any of the other Additional Documents, whether such Additional Agent or any Additional Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of the [Cash Flow] Credit Agreement or any other [Cash Flow] Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if any Additional Agent or any Additional Secured Party otherwise should exercise any of its contractual rights or remedies under the Additional Documents (subject to the express terms and conditions hereof), neither such Additional Agent nor any Additional Secured Party shall have any liability whatsoever to the [Cash Flow] Agent or any [Cash Flow] Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement) (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). Any Additional Agent and any Additional Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Additional Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that the [Cash Flow] Agent or any [Cash Flow] Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). The [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, agrees that none of any Additional Agent (including in its capacity as ABL Collateral Representative, if and as applicable) or any Additional Secured Parties shall incur any liability as a result of a sale, lease, license, application, or other disposition of the Collateral or any part or Proceeds thereof, pursuant to the Additional Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties).
(h) None of any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative, if and as applicable), any Additional Secured Parties or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to any other Additional Agent or any Additional Secured Party represented thereby for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Secured Parties represented thereby). If any Additional Agent or any Additional
 
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Secured Party honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any Additional Credit Facility or any of the other Additional Documents, whether such Additional Agent or any Additional Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any Additional Credit Facility or any other Additional Document to which any other Additional Agent or any Additional Secured Party represented by such other Additional Agent is party or beneficiary (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if any Additional Agent or any Additional Secured Party otherwise should exercise any of its contractual rights or remedies under the Additional Documents (subject to the express terms and conditions hereof), neither such Additional Agent nor any Additional Secured Party shall have any liability whatsoever to any other Additional Agent or any Additional Secured Party represented by such other Additional Agent, as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement) (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Secured Parties represented thereby). Any Additional Agent and any Additional Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Additional Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that any other Additional Agent or any Additional Secured Party represented by such other Additional Agent, has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Secured Parties represented thereby). Any Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, agrees that none of any other Additional Agent (including in its capacity as [Cash Flow] Collateral Representative, if and as applicable) or any Additional Secured Party represented thereby shall incur any liability as a result of a sale, lease, license, application, or other disposition of the Collateral or any part or Proceeds thereof, pursuant to the Additional Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Secured Parties represented thereby).
Section 5.2 Modifications to ABL Documents and [Cash Flow] Documents . (a) The [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, hereby agrees that, without affecting the obligations of the [Cash Flow] Agent and the [Cash Flow] Secured Parties hereunder, the ABL Agent and the ABL Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to the [Cash Flow] Agent or any [Cash Flow] Secured Party (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the [Cash Flow] Agent or any [Cash Flow] Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the ABL Documents in any manner whatsoever, including, to:
(i) change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the ABL Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the ABL Obligations or any of the ABL Documents;
 
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(ii) subject to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the ABL Obligations, and in connection therewith to enter into any additional ABL Documents;
(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guarantee or other obligations of any Person obligated in any manner under or in respect of the ABL Obligations;
(iv) subject to Section 2.4 hereof, release its Lien on any Collateral or other Property;
(v) exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi) subject to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the ABL Obligations; and
(vii) otherwise manage and supervise the ABL Obligations as the ABL Agent shall deem appropriate.
(b) Any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, hereby agrees that, without affecting the obligations of such Additional Agent and such Additional Secured Parties hereunder, the ABL Agent and the ABL Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to such Additional Agent or any such Additional Secured Party (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to such Additional Agent or any such Additional Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the ABL Documents in any manner whatsoever, including, to:
(i) change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the ABL Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the ABL Obligations or any of the ABL Documents;
(ii) subject to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the ABL Obligations, and in connection therewith to enter into any additional ABL Documents;
(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guarantee or other obligations of any Person obligated in any manner under or in respect of the ABL Obligations;
 
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(iv) subject to Section 2.4 hereof, release its Lien on any Collateral or other Property;
(v) exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi) subject to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the ABL Obligations; and
(vii) otherwise manage and supervise the ABL Obligations as the ABL Agent shall deem appropriate;
except, in each case, as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties.
(c) The ABL Agent, on behalf of itself and the ABL Secured Parties, hereby agrees that, without affecting the obligations of the ABL Agent and the ABL Secured Parties hereunder, the [Cash Flow] Agent and the [Cash Flow] Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to the ABL Agent or any ABL Secured Party (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the ABL Agent or any ABL Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the [Cash Flow] Documents in any manner whatsoever, including, to:
(i) change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the [Cash Flow] Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the [Cash Flow] Obligations or any of the [Cash Flow] Documents;
(ii) subject to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the [Cash Flow] Obligations, and in connection therewith to enter into any additional [Cash Flow] Documents;
(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guarantee or other obligations of any Person obligated in any manner under or in respect of the [Cash Flow] Obligations;
(iv) subject to Section 2.4 hereof, release its Lien on any Collateral or other Property;
(v) exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi) subject to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the [Cash Flow] Obligations; and
(vii) otherwise manage and supervise the [Cash Flow] Obligations as the [Cash Flow] Agent shall deem appropriate.
 
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(d) Any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, hereby agrees that, without affecting the obligations of such Additional Agent and such Additional Secured Parties hereunder, the [Cash Flow] Agent and the [Cash Flow] Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to such Additional Agent or any such Additional Secured Party (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to such Additional Agent or any such Additional Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the [Cash Flow] Documents in any manner whatsoever, including, to:
(i) change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the [Cash Flow] Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the [Cash Flow] Obligations or any of the [Cash Flow] Documents;
(ii) subject to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the [Cash Flow] Obligations, and in connection therewith to enter into any additional [Cash Flow] Documents;
(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guarantee or other obligations of any Person obligated in any manner under or in respect of the [Cash Flow] Obligations;
(iv) subject to Section 2.4 hereof, release its Lien on any Collateral or other Property;
(v) exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi) subject to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the [Cash Flow] Obligations; and
(vii) otherwise manage and supervise the [Cash Flow] Obligations as the [Cash Flow] Agent shall deem appropriate;
except, in each case, as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties.
(e) The [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, hereby agrees that, without affecting the obligations of the [Cash Flow] Agent and the [Cash Flow] Secured Parties hereunder, any Additional Agent and any Additional Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or
 
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notice to the [Cash Flow] Agent or any [Cash Flow] Secured Party or (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the [Cash Flow] Agent or any [Cash Flow] Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the Additional Documents in any manner whatsoever, including, to:
(i) change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Additional Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Additional Obligations or any of the Additional Documents;
(ii) subject to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the Additional Obligations, and in connection therewith to enter into any Additional Documents;
(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guarantee or other obligations of any Person obligated in any manner under or in respect of the Additional Obligations;
(iv) subject to Section 2.4 hereof, release its Lien on any Collateral or other Property;
(v) exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi) subject to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the Additional Obligations; and
(vii) otherwise manage and supervise the Additional Obligations as such Additional Agent shall deem appropriate;
except, in each case, as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties.
(f) The ABL Agent, on behalf of itself and the ABL Secured Parties, hereby agrees that, without affecting the obligations of the ABL Agent and the ABL Secured Parties hereunder, any Additional Agent and any Additional Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to the ABL Agent or any ABL Secured Party (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the ABL Agent or any ABL Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the Additional Documents in any manner whatsoever, including, to:
(i) change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Additional Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Additional Obligations or any of the Additional Documents;
 
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(ii) subject to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the Additional Obligations, and in connection therewith to enter into any Additional Documents;
(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guarantee or other obligations of any Person obligated in any manner under or in respect of the Additional Obligations;
(iv) subject to Section 2.4 hereof, release its Lien on any Collateral or other Property;
(v) exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi) subject to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the Additional Obligations; and
(vii) otherwise manage and supervise the Additional Obligations as such Additional Agent shall deem appropriate;
except, in each case, as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties.
(g) Any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, hereby agrees that, without affecting the obligations of such Additional Agent and such Additional Secured Parties hereunder, any other Additional Agent and any Additional Secured Parties represented by such other Additional Agent may, at any time and from time to time, in their sole discretion without the consent of or notice to such Additional Agent or any such Additional Secured Party (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to such Additional Agent or any such Additional Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the Additional Documents to which such other Additional Agent or any Additional Secured Party represented by such other Additional Agent is party or beneficiary in any manner whatsoever, including, to:
(i) change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Additional Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Additional Obligations or any of the Additional Documents;
 
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(ii) subject to Section 2.5 hereof, retain or obtain a Lien on any Property of any Person to secure any of the Additional Obligations, and in connection therewith to enter into any Additional Documents;
(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guarantee or other obligations of any Person obligated in any manner under or in respect of the Additional Obligations;
(iv) subject to Section 2.4 hereof, release its Lien on any Collateral or other Property;
(v) exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi) subject to Section 2.5 hereof, retain or obtain the primary or secondary obligation of any other Person with respect to any of the Additional Obligations; and
(vii) otherwise manage and supervise the Additional Obligations as such other Additional Agent shall deem appropriate;
except, in each case, as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Secured Parties represented thereby.
(h) The ABL Obligations, the [Cash Flow] Obligations and any Additional Obligations may be refunded, replaced or refinanced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is required to permit the refunding, replacement or refinancing transaction under any ABL Document, any [Cash Flow] Document or any Additional Document) of the ABL Agent, the ABL Secured Parties, the [Cash Flow] Agent or the [Cash Flow] Secured Parties, any Additional Agent or any Additional Secured Parties, as the case may be, all without affecting the Lien Priorities provided for herein or the other provisions hereof; provided , however , that, if the indebtedness refunding, replacing or refinancing any such ABL Obligations, [Cash Flow] Obligations or Additional Obligations is to constitute ABL Obligations, [Cash Flow] Obligations or Additional Obligations governed by this Agreement, the holders of such indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to a joinder agreement substantially in the form of Exhibit C attached hereto or otherwise in form and substance reasonably satisfactory to the ABL Agent, the [Cash Flow] Agent or any Additional Agent (other than any Designated Agent), as the case may be (or, if there is no continuing Agent other than any Designated Agent, as designated by the Company Representative), and any such refunding, replacement or refinancing transaction shall be in accordance with any applicable provisions of the ABL Documents, the [Cash Flow] Documents and any Additional Documents. For the avoidance of doubt, any ABL Obligations, [Cash Flow] Obligations or Additional Obligations may be refinanced, in whole or in part, in each case without notice to, or the consent (except to the extent a consent is required to permit the refinancing transaction under the ABL Documents, [Cash Flow] Documents or Additional Documents) of, any of the ABL Agent or any other ABL Secured Party, the [Cash Flow] Agent or any other [Cash Flow] Secured Party or any Additional Agent or any other Additional Secured Party, through the incurrence of Additional Indebtedness, subject to Section 7.11 .
 
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Section 5.3 Reinstatement and Continuation of Agreement . (a) If the ABL Agent or any ABL Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Credit Party or any other Person any payment made in satisfaction of all or any portion of the ABL Obligations (an “ ABL Recovery ”), then the ABL Obligations shall be reinstated to the extent of such ABL Recovery. If this Agreement shall have been terminated prior to such ABL Recovery, this Agreement shall be reinstated in full force and effect in the event of such ABL Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the Parties from such date of reinstatement. All rights, interests, agreements, and obligations of the ABL Agent, the [Cash Flow] Agent, any Additional Agent, the ABL Secured Parties, the [Cash Flow] Secured Parties and any Additional Secured Parties under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Credit Party or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Credit Party in respect of the ABL Obligations, the [Cash Flow] Obligations or any Additional Obligations. No priority or right of the ABL Agent or any ABL Secured Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Credit Party or by the noncompliance by any Person with the terms, provisions, or covenants of any of the ABL Documents, regardless of any knowledge thereof which the ABL Agent or any ABL Secured Party may have.
(b) If the [Cash Flow] Agent or any [Cash Flow] Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Credit Party or any other Person any payment made in satisfaction of all or any portion of the [Cash Flow] Obligations (a “ [Cash Flow] Recovery ”), then the [Cash Flow] Obligations shall be reinstated to the extent of such [Cash Flow] Recovery. If this Agreement shall have been terminated prior to such [Cash Flow] Recovery, this Agreement shall be reinstated in full force and effect in the event of such [Cash Flow] Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the Parties from such date of reinstatement. All rights, interests, agreements, and obligations of the ABL Agent, the [Cash Flow] Agent, any Additional Agent, the ABL Secured Parties, the [Cash Flow] Secured Parties and any Additional Secured Parties under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Credit Party or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Credit Party in respect of the ABL Obligations, the [Cash Flow] Obligations or any Additional Obligations. No priority or right of the [Cash Flow] Agent or any [Cash Flow] Secured Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Credit Party or by the noncompliance by any Person with the terms, provisions, or covenants of any of the [Cash Flow] Documents, regardless of any knowledge thereof which the [Cash Flow] Agent or any [Cash Flow] Secured Party may have.
 
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(c) If any Additional ABL Agent or any Additional ABL Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Credit Party or any other Person any payment made in satisfaction of all or any portion of the Additional ABL Obligations (an “ Additional ABL Recovery ”), then the Additional ABL Obligations shall be reinstated to the extent of such Additional ABL Recovery. If this Agreement shall have been terminated prior to such Additional ABL Recovery, this Agreement shall be reinstated in full force and effect in the event of such Additional ABL Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the Parties from such date of reinstatement. All rights, interests, agreements, and obligations of any Additional ABL Agent, the ABL Agent, the [Cash Flow] Agent, any Additional [Cash Flow] Agent, the Additional ABL Secured Parties, the ABL Secured Parties, the [Cash Flow] Secured Parties and any Additional [Cash Flow] Secured Parties under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Credit Party or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Credit Party in respect of any Additional ABL Obligations, the ABL Obligations, the [Cash Flow] Obligations or any Additional [Cash Flow] Obligations. No priority or right of any Additional ABL Agent or any Additional ABL Secured Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Credit Party or by the noncompliance by any Person with the terms, provisions, or covenants of any of the Additional ABL Documents, regardless of any knowledge thereof which any Additional ABL Agent or any Additional ABL Secured Party may have.
(d) If any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Credit Party or any other Person any payment made in satisfaction of all or any portion of the Additional [Cash Flow] Obligations (an “ Additional [Cash Flow] Recovery ”), then the Additional [Cash Flow] Obligations shall be reinstated to the extent of such Additional [Cash Flow] Recovery. If this Agreement shall have been terminated prior to such Additional [Cash Flow] Recovery, this Agreement shall be reinstated in full force and effect in the event of such Additional [Cash Flow] Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the Parties from such date of reinstatement. All rights, interests, agreements, and obligations of any Additional [Cash Flow] Agent, the ABL Agent, the [Cash Flow] Agent, any Additional ABL Agent, any Additional [Cash Flow] Secured Parties, the ABL Secured Parties, the [Cash Flow] Secured Parties and any Additional ABL Secured Parties under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Credit Party or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Credit Party in respect of any Additional [Cash Flow] Obligations, the ABL Obligations, the [Cash Flow] Obligations or any Additional ABL Obligations. No priority or right of any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Credit Party or by the noncompliance by any Person with the terms, provisions, or covenants of any of the Additional [Cash Flow] Documents, regardless of any knowledge thereof which any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party may have.
 
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ARTICLE 6
Insolvency Proceedings
Section 6.1 DIP Financing . (a) If any Credit Party shall be subject to any Insolvency Proceeding in the United States at any time prior to the Discharge of ABL Collateral Obligations, and the ABL Agent or any ABL Credit Agreement Lenders, or any Additional Agent or any Additional ABL Credit Facility Lenders, shall agree to provide any Credit Party with, or consent to a third party providing, any Credit Party with any financing under Section 364 of the Bankruptcy Code or consent to any order for the use of cash collateral under Section 363 of the Bankruptcy Code (“ DIP Financing ”), with such DIP Financing to be secured by all or any portion of the Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code would be Collateral), then the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, agrees that it will raise no objection, and will not directly or indirectly support or act in concert with any other party in raising an objection, to such DIP Financing or to the Liens securing the same on the grounds of a failure to provide “adequate protection” for the Liens of the [Cash Flow] Agent securing the [Cash Flow] Obligations or on any other grounds (and will not request any adequate protection solely as a result of such DIP Financing), so long as ( i ) the [Cash Flow] Agent retains its Lien on the Collateral to secure the [Cash Flow] Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code) and, as to the [Cash Flow] Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the Bankruptcy Code and any Lien securing such DIP Financing is junior and subordinate to the Lien of the [Cash Flow] Agent on the [Cash Flow] Priority Collateral, ( ii ) all Liens on ABL Priority Collateral securing any such DIP Financing shall be senior to or on a parity with the Liens of the ABL Agent and the ABL Secured Parties securing the ABL Obligations, and the Liens of any Additional ABL Agent and Additional ABL Secured Parties securing the Additional ABL Obligations, on ABL Priority Collateral, ( iii ) if the ABL Agent and/or any ABL Secured Party, or any Additional ABL Agent and/or any Additional ABL Secured Party, receives an adequate protection Lien on post-petition assets of the debtor to secure the ABL Obligations or the Additional ABL Obligations, as the case may be, the [Cash Flow] Agent also receives an adequate protection Lien on such post-petition assets of the debtor to secure the [Cash Flow] Obligations and ( iv ) the terms of such DIP Financing do not require any Grantor to seek approval for any Plan of Reorganization that is not a Conforming Plan of Reorganization, provided that ( x ) such Liens in favor of the ABL Agent, any Additional ABL Agent and the [Cash Flow] Agent shall be subject to the provisions of Section 6.1(d) hereof and ( y ) the foregoing provisions of this Section 6.1(a) shall not prevent the [Cash Flow] Agent and the [Cash Flow] Secured Parties from objecting to any provision in any DIP Financing relating to any provision or content of a Plan of Reorganization that is not a Conforming Plan of Reorganization.
(b) If any Credit Party shall be subject to any Insolvency Proceeding in the United States at any time prior to the Discharge of ABL Collateral Obligations, and the ABL Agent or any ABL Credit Agreement Lenders, or any Additional ABL Agent or Additional ABL Credit Facility Lenders, shall agree to provide any Credit Party with, or consent to a third party providing, any DIP Financing, with such DIP Financing to be secured by all or any portion of the Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code
 
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would be Collateral), then any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that it will raise no objection, and will not directly or indirectly support, or act in concert with any other party in raising an objection, to such DIP Financing or to the Liens securing the same on the grounds of a failure to provide “adequate protection” for the Liens of such Additional [Cash Flow] Agent securing the Additional [Cash Flow] Obligations or on any other grounds (and will not request any adequate protection solely as a result of such DIP Financing), so long as ( i ) such Additional [Cash Flow] Agent retains its Lien on the Collateral to secure the Additional [Cash Flow] Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code) and, as to the [Cash Flow] Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the Bankruptcy Code and any Lien securing such DIP Financing is junior and subordinate to the Lien of such Additional [Cash Flow] Agent on the [Cash Flow] Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties), or any Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, ( ii ) all Liens on ABL Priority Collateral securing any such DIP Financing shall be senior to or on a parity with the Liens of the ABL Agent and the ABL Secured Parties securing the ABL Obligations, and the Liens of any Additional ABL Agent and any Additional ABL Secured Parties securing the Additional ABL Obligations, on ABL Priority Collateral, ( iii ) if the ABL Agent and/or any ABL Secured Party, or any Additional ABL Agent and/or any Additional ABL Secured Party, receives an adequate protection Lien on post-petition assets of the debtor to secure the ABL Obligations or the Additional ABL Obligations, as the case may be, such Additional [Cash Flow] Agent also receives an adequate protection Lien on such post-petition assets of the debtor to secure the Additional [Cash Flow] Obligations and ( iv ) the terms of such DIP Financing do not require any Grantor to seek approval for any Plan of Reorganization that is not a Conforming Plan of Reorganization, provided that ( x ) such Liens in favor of the ABL Agent, any Additional ABL Agent and such Additional [Cash Flow] Agent shall be subject to the provisions of Section 6.1(d) hereof and ( y ) the foregoing provisions of this Section 6.1(b) shall not prevent any Additional [Cash Flow] Agent and any Additional [Cash Flow] Secured Parties from objecting to any provision in any DIP Financing relating to any provision or content of a Plan of Reorganization that is not a Conforming Plan Reorganization.
(c)
(i) If the Original ABL Credit Agreement is then in effect, then in the event that any Additional ABL Agent or any Additional ABL Secured Party proposes to enter into and consummate any DIP Financing (such proposed DIP Financing, the “ Proposed DIP ”), then ( x ) such Additional ABL Agent or Additional ABL Secured Party, as applicable, shall provide written notice to the ABL Agent thereof, which notice shall contain the material terms and conditions of such Proposed DIP (including with respect to facility type, tenor, amounts, collateral, obligors, fees, pricing, covenant package and roles) (such notice, the “ DIP Offer ”) at least five (5) Business Days prior to the consummation of such Proposed DIP and ( y ) such Additional ABL Agent or Additional ABL Secured Party, as applicable, hereby unconditionally and irrevocably grants to the ABL Agent and the ABL Credit Agreement Lenders the right, but not an obligation, to
 
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enter into and consummate a DIP Financing either ( A ) on the terms and conditions set forth in the DIP Offer, or ( B ) on the terms and conditions (including with respect to facility type, tenor, amounts, collateral, obligors, fees, pricing, covenant package and roles) no less advantageous to the Credit Parties than the terms and conditions (including with respect to facility type, tenor, amounts, collateral, obligors, fees, pricing, covenant package and roles) of the Proposed DIP specified in the DIP Offer (collectively, the “ Right of Last Refusal ”).
(ii) To exercise its Right of Last Refusal, the ABL Agent or any ABL Credit Agreement Lender shall, within three Business Days after receipt by the ABL Agent of the DIP Offer, deliver a written notice to the Company Representative and each Additional ABL Agent, which shall either specify that the ABL Agent or such ABL Credit Agreement Lender is willing to provide the DIP Financing on the terms of the DIP Offer (such notice, the “ Matching DIP Offer ”) or provide the material terms and conditions (including with respect to facility type, tenor, amounts, collateral, obligors, fees, pricing, covenant package and roles) of a DIP Financing that the ABL Agent or such ABL Credit Agreement Lender is willing to provide (such notice, the “ Alternative DIP Offer ”). If the ABL Agent or any ABL Credit Agreement Lender provides a Matching DIP Offer within the time period specified in the preceding sentence, each Additional ABL Agent and Additional ABL Secured Party agrees not to provide (other than in its capacity as ABL Agent or ABL Credit Agreement Lender, if applicable), and not to directly or indirectly support or act in concert with any other party to provide, any DIP Financing and agrees that in such event the ABL Agent or such ABL Credit Agreement Lender shall have the sole right as between the parties hereto to provide any DIP Financing.
(iii) If the Company Representative agrees to proceed with a Matching DIP Offer or an Alternative DIP Offer, then in each such case without limiting any of the provisions of Section 6.1(a) or Section 6.1(b) hereof, each Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that it will raise no objection, and will not directly or indirectly support or act in concert with any other party in raising an objection, to such DIP Financing provided pursuant to such Matching DIP Offer or Alternative DIP Offer, as the case may be, or to the Liens securing the same on the grounds of a failure to provide “adequate protection” for the Liens of such Additional ABL Agent securing the Additional ABL Obligations or on any other grounds (and will not request any adequate protection solely as a result of such applicable DIP Financing), so long as ( 1 ) such Additional ABL Agent retains its Lien on the Collateral to secure the Additional ABL Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code) and such Lien has the same priority as existed prior to the commencement of the case under the Bankruptcy Code (subject only to any “super-priority” of the Liens securing such DIP Financing) and ( 2 ) if the ABL Agent and/or any ABL Secured Party receives an adequate protection Lien on post-petition assets of the debtor to secure the ABL Obligations, as the case may be, such Additional ABL Agent also receives an adequate protection Lien on such post-petition assets of the debtor to secure the Additional ABL Obligations; provided that ( A ) such Liens in favor of the ABL Agent and any Additional ABL Agent shall be subject to the provisions of Section 6.1(d) hereof and ( B ) the foregoing
 
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provisions of this Section 6.1(c) shall not prevent any Additional ABL Agent or any Additional ABL Secured Parties from objecting to any provision in any DIP Financing relating to any provision or content of a Plan of Reorganization that is not a Conforming Plan of Reorganization.
(d) All Liens granted to the ABL Agent, the [Cash Flow] Agent or any Additional Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended by the Parties to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this Agreement; provided , however , that the foregoing shall not alter the super-priority of any Liens securing any DIP Financing in accordance with this Section 6.1 .
Section 6.2 Relief from Stay . Until the Discharge of ABL Collateral Obligations, the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, and any Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees not to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the ABL Priority Collateral without the ABL Collateral Representative’s express written consent. Until the Discharge of [Cash Flow] Collateral Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, and any Additional ABL Agent, on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees not to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the [Cash Flow] Priority Collateral without the [Cash Flow] Collateral Representative’s express written consent. In addition, none of the [Cash Flow] Agent (including in its capacity as [Cash Flow] Collateral Representative, if applicable), the ABL Agent (including in its capacity as ABL Collateral Representative, if applicable) nor any Additional Agent (including in its capacity as [Cash Flow] Collateral Representative or ABL Collateral Representative, if and as applicable) shall seek any relief from the automatic stay with respect to any Collateral without providing 30 days’ prior written notice to each other Party, unless such period is agreed in writing by the ABL Agent, the [Cash Flow] Agent and each Additional Agent to be modified.
Section 6.3 No Contest . (a) The [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, agrees that, prior to the Discharge of ABL Obligations, none of them shall contest (or directly or indirectly support any other Person contesting) ( i ) any request by the ABL Agent or any ABL Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1 ), or ( ii ) any objection by the ABL Agent or any ABL Secured Party to any motion, relief, action, or proceeding based on a claim by the ABL Agent or any ABL Secured Party that its interests in the Collateral (unless in contravention of Section 6.1 ) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the ABL Agent as adequate protection of its interests are subject to this Agreement. Any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, agrees that, prior to the Discharge of ABL Obligations, none of them shall directly or indirectly contest (or support any other Person contesting) ( i ) any request by the ABL Agent or any ABL Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1 ), or ( ii ) any objection by the ABL Agent or any ABL Secured Party to any motion, relief, action, or
 
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proceeding based on a claim by the ABL Agent or any ABL Secured Party that its interests in the Collateral (unless in contravention of Section 6.1 ) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the ABL Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties).
(b) The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, prior to the Discharge of [Cash Flow] Obligations, none of them shall contest (or directly or indirectly support any other Person contesting) ( i ) any request by the [Cash Flow] Agent or any [Cash Flow] Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1 hereof), or ( ii ) any objection by the [Cash Flow] Agent or any [Cash Flow] Secured Party to any motion, relief, action or proceeding based on a claim by the [Cash Flow] Agent or any [Cash Flow] Secured Party that its interests in the Collateral (unless in contravention of Section 6.1 hereof) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the [Cash Flow] Agent as adequate protection of its interests are subject to this Agreement. Any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, agrees that, prior to the Discharge of [Cash Flow] Obligations, none of them shall directly or indirectly contest (or support any other Person contesting) ( i ) any request by the [Cash Flow] Agent or any [Cash Flow] Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1 ), or ( ii ) any objection by the [Cash Flow] Agent or any [Cash Flow] Secured Party to any motion, relief, action or proceeding based on a claim by the [Cash Flow] Agent or any [Cash Flow] Secured Party that its interests in the Collateral (unless in contravention of Section 6.1 ) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the [Cash Flow] Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties).
(c) The [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, agrees that, prior to the Discharge of Additional Obligations, none of them shall directly or indirectly contest (or support any other Person contesting) ( i ) any request by any Additional Agent or any Additional Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1 ), or ( ii ) any objection by any Additional Agent or any Additional Secured Party to any motion, relief, action, or proceeding based on a claim by any Additional Agent or any Additional Secured Party that its interests in the Collateral (unless in contravention of Section 6.1 ) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to such Additional Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties). The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, prior to the Discharge of Additional Obligations, none of them shall directly or indirectly contest (or support any other Person contesting) ( i ) any request by any
 
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Additional Agent or any Additional Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1 hereof), or ( ii ) any objection by any Additional Agent or any Additional Secured Party to any motion, relief, action, or proceeding based on a claim by any Additional Agent or any Additional Secured Party that its interests in the Collateral (unless in contravention of Section 6.1 hereof) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to such Additional Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties). Any Additional Agent, on behalf of itself and any Additional Secured Parties represented thereby, agrees that, prior to the applicable Discharge of Additional Obligations, none of them shall directly or indirectly contest (or support any other Person contesting) ( a ) any request by any other Additional Agent or any Additional Secured Party represented by such other Additional Agent for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1 hereof), or ( b ) any objection by such other Additional Agent or any Additional Secured Party to any motion, relief, action, or proceeding based on a claim by any Additional Agent or any Additional Secured Party represented by such other Additional Agent that its interests in the Collateral (unless in contravention of Section 6.1 hereof) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to such other Additional Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Secured Parties represented thereby).
Section 6.4 Asset Sales . The [Cash Flow] Agent agrees, on behalf of itself and the [Cash Flow] Secured Parties, and any Additional [Cash Flow] Agent agrees, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, that it will not oppose any sale consented to by the ABL Agent, any Additional ABL Agent or the ABL Collateral Representative of any ABL Priority Collateral pursuant to Section 363(f) of the Bankruptcy Code (or any similar provision under the law applicable to any Insolvency Proceeding) so long as the proceeds of such sale are applied in accordance with this Agreement. The ABL Agent agrees, on behalf of itself and the ABL Secured Parties, and each Additional ABL Agent agrees, on behalf of itself and any Additional ABL Secured Parties represented thereby, that it will not oppose any sale consented to by the [Cash Flow] Agent, any Additional [Cash Flow] Agent or the [Cash Flow] Collateral Representative of any [Cash Flow] Priority Collateral pursuant to Section 363(f) of the Bankruptcy Code (or any similar provision under the law applicable to any Insolvency Proceeding) so long as the proceeds of such sale are applied in accordance with this Agreement.
Section 6.5 Separate Grants of Security and Separate Classification . Each [Cash Flow] Secured Party, the [Cash Flow] Agent, each Additional [Cash Flow] Secured Party and each Additional [Cash Flow] Agent, on the one hand, and each ABL Secured Party, the ABL Agent, each Additional ABL Secured Party and each Additional ABL Agent, on the other hand, acknowledges and agrees that ( i ) the grants of Liens pursuant to the ABL Collateral Documents, the [Cash Flow] Collateral Documents, the
 
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Additional [Cash Flow] Collateral Documents and the Additional ABL Collateral Documents constitute separate and distinct grants of Liens and ( ii ) because of, among other things, their differing rights in the Collateral, the [Cash Flow] Obligations and Additional [Cash Flow] Obligations are fundamentally different from the ABL Obligations and the Additional ABL Obligations and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the ABL Secured Parties and the Additional ABL Secured Parties, on the one hand, and the [Cash Flow] Secured Parties and the Additional [Cash Flow] Secured Parties, on the other hand, in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the ABL Secured Parties, the [Cash Flow] Secured Parties, any Additional [Cash Flow] Secured Parties and any Additional ABL Secured Parties hereby acknowledge and agree that all distributions shall be made as if there were separate classes of ABL Obligation claims, Additional ABL Obligation claims, [Cash Flow] Obligation claims and Additional [Cash Flow] Obligation claims against the Credit Parties (with the effect being that, to the extent that the aggregate value of the ABL Priority Collateral or the [Cash Flow] Priority Collateral is sufficient (for this purpose ignoring all claims held by the other Secured Parties), the ABL Secured Parties and the Additional ABL Secured Parties or the [Cash Flow] Secured Parties and the Additional [Cash Flow] Secured Parties, respectively, shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest that is available from each pool of Priority Collateral for each of the ABL Secured Parties and Additional ABL Secured Parties, on the one hand, and the [Cash Flow] Secured Parties and the Additional [Cash Flow] Secured Parties, on the other hand, before any distribution is made from the applicable pool of Priority Collateral in respect of the claims held by the other Secured Parties, with the other Secured Parties hereby acknowledging and agreeing to turn over to the respective other Secured Parties amounts otherwise received or receivable by them from the applicable pool of Priority Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recoveries. The foregoing sentence is subject to any separate agreement by and between any Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, and any other Additional Agent, on behalf of itself and the Additional Secured Parties represented thereby, with respect to the Additional Obligations owing to any of such Additional Agent and Additional Secured Parties.
Section 6.6 Enforceability . The provisions of this Agreement are intended to be and shall be enforceable under Section 510(a) of the Bankruptcy Code.
Section 6.7 ABL Obligations Unconditional . All rights of the ABL Agent hereunder, and all agreements and obligations of the [Cash Flow] Agent, any Additional Agent and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(i) any lack of validity or enforceability of any ABL Document;
 
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(ii) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the ABL Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any ABL Document;
(iii) any exchange, release, voiding, avoidance or non-perfection of any security interest in any Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the ABL Obligations or any guarantee thereof; or
(iv) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Credit Party in respect of the ABL Obligations, or of any of the [Cash Flow] Agent, any Additional Agent or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.8 [Cash Flow] Obligations Unconditional . All rights of the [Cash Flow] Agent hereunder, and all agreements and obligations of the ABL Agent, any Additional Agent and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(i) any lack of validity or enforceability of any [Cash Flow] Document;
(ii) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the [Cash Flow] Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any [Cash Flow] Document;
(iii) any exchange, release, voiding, avoidance or non-perfection of any security interest in any Collateral, or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the [Cash Flow] Obligations or any guarantee thereof; or
(iv) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Credit Party in respect of the [Cash Flow] Obligations, or of any of the ABL Agent, any Additional Agent or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.9 Additional Obligations Unconditional . All rights of any Additional Agent hereunder, and all agreements and obligations of the ABL Agent, the [Cash Flow] Agent and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(i) any lack of validity or enforceability of any Additional Document;
 
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(ii) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Additional Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Additional Document;
(iii) any exchange, release, voiding, avoidance or non-perfection of any security interest in any Collateral, or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the Additional Obligations or any guarantee thereof; or
(iv) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Credit Party in respect of the Additional Obligations, or of any of the ABL Agent, the [Cash Flow] Agent or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.10 Adequate Protection . Except to the extent expressly provided in Section 6.1 and this Section 6.10 , nothing in this Agreement shall limit the rights of ( x ) the ABL Agent and the ABL Secured Parties, ( y ) the [Cash Flow] Agent and the [Cash Flow] Secured Parties, or ( z ) any Additional Agent and any Additional Secured Parties, respectively, from seeking or requesting adequate protection with respect to their interests in the applicable Collateral in any Insolvency Proceeding, including adequate protection in the form of a cash payment, periodic cash payments, cash payments of interest, additional collateral or otherwise; provided that:
(a) in the event that the ABL Agent, on behalf of itself or any of the ABL Secured Parties, seeks or requests adequate protection in respect of the ABL Obligations and such adequate protection is granted in the form of a Lien on additional collateral comprising assets of the type of assets that constitute [Cash Flow] Priority Collateral, then the ABL Agent, on behalf of itself and each of the ABL Secured Parties, agrees that the [Cash Flow] Agent shall also be granted a senior Lien on such collateral as security for the [Cash Flow] Obligations and that any Lien on such collateral securing the ABL Obligations shall be subordinate to any Lien on such collateral securing the [Cash Flow] Obligations,
(b) in the event that the ABL Agent, on behalf of itself or any of the ABL Secured Parties, seeks or requests adequate protection in respect of the ABL Obligations and such adequate protection is granted in the form of a Lien on additional collateral comprising assets of the type of assets that constitute [Cash Flow] Priority Collateral, then the ABL Agent, on behalf of itself and each of the ABL Secured Parties, agrees that any Additional [Cash Flow] Agent shall also be granted a senior Lien on such collateral as security for the Additional [Cash Flow] Obligations and that any Lien on such collateral securing the ABL Obligations shall be subordinate to any Lien on such collateral securing the Additional [Cash Flow] Obligations (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties),
 
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(c) in the event that the [Cash Flow] Agent, on behalf of itself or any of the [Cash Flow] Secured Parties, seeks or requests adequate protection in respect of the [Cash Flow] Obligations and such adequate protection is granted in the form of a Lien on additional collateral comprising assets of the type of assets that constitute ABL Priority Collateral, then the [Cash Flow] Agent, on behalf of itself and each of the [Cash Flow] Secured Parties, agrees that the ABL Agent shall also be granted a senior Lien on such collateral as security for the ABL Obligations and that any Lien on such collateral securing the [Cash Flow] Obligations shall be subordinate to the Lien on such collateral securing the ABL Obligations,
(d) in the event that the [Cash Flow] Agent, on behalf of itself or any of the [Cash Flow] Secured Parties, seeks or requests adequate protection in respect of the [Cash Flow] Obligations and such adequate protection is granted in the form of a Lien on additional collateral comprising assets of the type of assets that constitute ABL Priority Collateral, then the [Cash Flow] Agent, on behalf of itself and each of the [Cash Flow] Secured Parties, agrees that any Additional ABL Agent shall also be granted a senior Lien on such collateral as security for the Additional ABL Obligations and that any Lien on such collateral securing the [Cash Flow] Obligations shall be subordinate to any Lien on such collateral securing the Additional ABL Obligations,
(e) in the event that any Additional [Cash Flow] Agent, on behalf of itself or any Additional [Cash Flow] Secured Parties, seeks or requests adequate protection in respect of the Additional [Cash Flow] Obligations and such adequate protection is granted in the form of a Lien on additional collateral comprising assets of the type of assets that constitute ABL Priority Collateral, then such Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that the ABL Agent shall also be granted a senior Lien on such collateral as security for the ABL Obligations and that any Lien on such collateral securing the Additional [Cash Flow] Obligations shall be subordinate to the Lien on such collateral securing the ABL Obligations,
(f) in the event that any Additional [Cash Flow] Agent, on behalf of itself or any Additional [Cash Flow] Secured Parties, seeks or requests adequate protection in respect of the Additional [Cash Flow] Obligations and such adequate protection is granted in the form of a Lien on additional collateral comprising assets of the type of assets that constitute ABL Priority Collateral, then such Additional [Cash Flow] Agent, on behalf of itself and any Additional [Cash Flow] Secured Party represented thereby, agrees that any Additional ABL Agent shall also be granted a senior Lien on such collateral as security for the Additional ABL Obligations and that any Lien on such collateral securing the Additional [Cash Flow] Obligations shall be subordinate to the Lien on such collateral securing the Additional ABL Obligations,
(g) in the event that any Additional ABL Agent, on behalf of itself or any Additional ABL Secured Party, seeks or requests adequate protection in respect of the Additional ABL Obligations and such adequate protection is granted in the form of a Lien on additional collateral comprising assets of the type of assets that constitute [Cash Flow] Priority Collateral, then such Additional ABL Agent, on behalf of itself and any Additional ABL Secured Party represented thereby, agrees that the [Cash Flow] Agent shall also be granted a senior Lien on such collateral as security for the [Cash Flow] Obligations and that any Lien on such collateral securing the Additional ABL Obligations shall be subordinate to the Lien on such collateral securing the [Cash Flow] Obligations, and
 
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(h) in the event that any Additional ABL Agent, on behalf of itself or any Additional ABL Secured Party, seeks or requests adequate protection in respect of the Additional ABL Obligations and such adequate protection is granted in the form of a Lien on additional collateral comprising assets of the type of assets that constitute [Cash Flow] Priority Collateral, then such Additional ABL Agent, on behalf of itself and any Additional ABL Secured Party represented thereby, agrees that any Additional [Cash Flow] Agent shall also be granted a senior Lien on such collateral as security for the Additional [Cash Flow] Obligations and that any Lien on such collateral securing the Additional ABL Obligations shall be subordinate to the Lien on such collateral securing the Additional [Cash Flow] Obligations (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby).
ARTICLE 7
Miscellaneous
Section 7.1 Rights of Subrogation . The [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, agrees that no payment by the [Cash Flow] Agent or any [Cash Flow] Secured Party to the ABL Agent or any ABL Secured Party pursuant to the provisions of this Agreement shall entitle the [Cash Flow] Agent or any [Cash Flow] Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of ABL Obligations shall have occurred. Following the Discharge of ABL Obligations, the ABL Agent agrees to execute such documents, agreements, and instruments as the [Cash Flow] Agent or any [Cash Flow] Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the ABL Obligations resulting from payments to the ABL Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the ABL Agent are paid by such Person upon request for payment thereof.
The [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, agrees that no payment by the [Cash Flow] Agent or any [Cash Flow] Secured Party to any Additional ABL Agent or any Additional ABL Secured Party represented thereby pursuant to the provisions of this Agreement shall entitle the [Cash Flow] Agent or any [Cash Flow] Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of Additional ABL Obligations with respect to the Additional ABL Obligations owed to such Additional ABL Secured Parties shall have occurred. Following the Discharge of Additional ABL Obligations with respect to the Additional ABL Obligations owed to such Additional ABL Secured Parties, such Additional ABL Agent agrees to execute such documents, agreements, and instruments as the [Cash Flow] Agent or any [Cash Flow] Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the applicable Additional ABL Obligations resulting from payments to such Additional ABL Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Additional ABL Agent are paid by such Person upon request for payment thereof.
 
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The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that no payment by the ABL Agent or any ABL Secured Party to the [Cash Flow] Agent or any [Cash Flow] Secured Party pursuant to the provisions of this Agreement shall entitle the ABL Agent or any ABL Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of [Cash Flow] Obligations shall have occurred. Following the Discharge of [Cash Flow] Obligations, the [Cash Flow] Agent agrees to execute such documents, agreements, and instruments as the ABL Agent or any ABL Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the [Cash Flow] Obligations resulting from payments to the [Cash Flow] Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the [Cash Flow] Agent are paid by such Person upon request for payment thereof.
The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that no payment by the ABL Agent or any ABL Secured Party to any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party represented thereby pursuant to the provisions of this Agreement shall entitle the ABL Agent or any ABL Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of Additional [Cash Flow] Obligations with respect to the Additional [Cash Flow] Obligations owed to such Additional [Cash Flow] Secured Parties shall have occurred. Following the Discharge of Additional [Cash Flow] Obligations with respect to the Additional [Cash Flow] Obligations owed to such Additional [Cash Flow] Secured Parties, such Additional [Cash Flow] Agent agrees to execute such documents, agreements, and instruments as the ABL Agent or any ABL Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the applicable Additional [Cash Flow] Obligations resulting from payments to such Additional [Cash Flow] Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Additional [Cash Flow] Agent are paid by such Person upon request for payment thereof.
Any Additional [Cash Flow] Agent, for and on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that no payment by such Additional [Cash Flow] Agent or any such Additional [Cash Flow] Secured Party to the ABL Agent or any ABL Secured Party pursuant to the provisions of this Agreement shall entitle such Additional [Cash Flow] Agent or any such Additional [Cash Flow] Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of ABL Obligations shall have occurred. Following the Discharge of ABL Obligations, the ABL Agent agrees to execute such documents, agreements, and instruments as such Additional [Cash Flow] Agent or any such Additional [Cash Flow] Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the ABL Obligations resulting from payments to the ABL Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the ABL Agent are paid by such Person upon request for payment thereof.
Any Additional [Cash Flow] Agent, for and on behalf of itself and any Additional [Cash Flow] Secured Parties represented thereby, agrees that no payment by such Additional
 
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[Cash Flow] Agent or any such Additional [Cash Flow] Secured Party to any Additional ABL Agent or any Additional ABL Secured Party pursuant to the provisions of this Agreement shall entitle such Additional [Cash Flow] Agent or any such Additional [Cash Flow] Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of Additional ABL Obligations with respect to the Additional ABL Obligations owed to such Additional ABL Secured Parties shall have occurred. Following the Discharge of Additional ABL Obligations with respect to the Additional ABL Obligations owed to such Additional ABL Secured Parties, any Additional ABL Agent agrees to execute such documents, agreements, and instruments as such Additional [Cash Flow] Agent or any such Additional [Cash Flow] Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Additional ABL Obligations resulting from payments to such Additional ABL Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Additional ABL Agent are paid by such Person upon request for payment thereof.
Any Additional ABL Agent, for and on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that no payment by such Additional ABL Agent or any such Additional ABL Secured Party to the [Cash Flow] Agent or any [Cash Flow] Secured Party pursuant to the provisions of this Agreement shall entitle such Additional ABL Agent or any such Additional ABL Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of [Cash Flow] Obligations shall have occurred. Following the Discharge of [Cash Flow] Obligations, the [Cash Flow] Agent agrees to execute such documents, agreements, and instruments as such Additional ABL Agent or any such Additional ABL Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the [Cash Flow] Obligations resulting from payments to the [Cash Flow] Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the [Cash Flow] Agent are paid by such Person upon request for payment thereof.
Any Additional ABL Agent, for and on behalf of itself and any Additional ABL Secured Parties represented thereby, agrees that no payment by such Additional ABL Agent or any such Additional ABL Secured Party to any Additional [Cash Flow] Agent or any Additional [Cash Flow] Secured Party pursuant to the provisions of this Agreement shall entitle such Additional ABL Agent or any such Additional ABL Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of Additional [Cash Flow] Obligations with respect to the Additional [Cash Flow] Obligations owed to such Additional [Cash Flow] Secured Parties shall have occurred. Following the Discharge of Additional [Cash Flow] Obligations with respect to the Additional [Cash Flow] Obligations owed to such Additional [Cash Flow] Secured Parties, any Additional [Cash Flow] Agent agrees to execute such documents, agreements, and instruments as such Additional ABL Agent or any such Additional ABL Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Additional [Cash Flow] Obligations resulting from payments to such Additional [Cash Flow] Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Additional [Cash Flow] Agent are paid by such Person upon request for payment thereof.
 
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Section 7.2 Further Assurances . The Parties will, at their own expense and at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that any Party may reasonably request, in order to protect any right or interest granted or purported to be granted hereby or to enable such Party to exercise and enforce its rights and remedies hereunder; provided , however , that no Party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any other action referred to in this Section 7.2 , to the extent that such action would contravene any law, order or other legal requirement or any of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such Party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution under this Section 7.2 .
Section 7.3 Representations . The [Cash Flow] Agent represents and warrants to the ABL Agent and any Additional Agent that it has the requisite power and authority under the [Cash Flow] Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the [Cash Flow] Secured Parties. The ABL Agent represents and warrants to the [Cash Flow] Agent and any Additional Agent that it has the requisite power and authority under the ABL Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the ABL Secured Parties. Any Additional Agent represents and warrants to the [Cash Flow] Agent, the ABL Agent and any other Additional Agent that it has the requisite power and authority under the applicable Additional Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and any Additional Secured Parties represented thereby.
Section 7.4 Amendments . (a) No amendment, modification or waiver of any provision of this Agreement, and no consent to any departure by any Party hereto, shall be effective unless it is in a written agreement executed by the [Cash Flow] Agent, the ABL Agent and any Additional Agent. Notwithstanding the foregoing, the Company Representative may, without the consent of any Party hereto, amend this Agreement to add an Additional Agent by ( x ) executing an Additional Indebtedness Joinder as provided in Section 7.11 or ( y ) executing a joinder agreement in substantially the form of Exhibit C attached hereto as provided for in the definition of “ABL Credit Agreement” or “[Cash Flow] Credit Agreement”, as applicable. No amendment, modification or waiver of any provision of this Agreement, and no consent to any departure therefrom by any Party hereto, that changes, alters, modifies or otherwise affects any power, privilege, right, remedy, liability or obligation of, or otherwise affects in any manner, any Additional Agent that is not then a Party, or any Additional Secured Party not then represented by an Additional Agent that is then a Party (including but not limited to any change, alteration, modification or other effect upon any power, privilege, right, remedy, liability or obligation of or other effect upon any such Additional Agent or Additional Secured Party that may at any subsequent time become a Party or beneficiary hereof) shall be effective unless it is consented to in writing by the Company Representative (regardless of whether any such Additional Agent or Additional Secured Party ever becomes a Party or beneficiary hereof), and any amendment, modification or waiver of any provision of this Agreement that would have the effect, directly or indirectly, through any reference in any Credit Document to this Agreement or otherwise, of
 
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waiving, amending, supplementing or otherwise modifying any Credit Document, or any term or provision thereof, or any right or obligation of the Company or any other Credit Party thereunder or in respect thereof, shall not be given such effect except pursuant to a written instrument executed by the Company Representative and each other affected Credit Party.
(b) In the event that the ABL Agent that is the ABL Collateral Representative or the requisite ABL Secured Parties represented thereby enter into any amendment, waiver or consent in respect of or replacing any ABL Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departure from any provisions of, any ABL Collateral Document relating to the ABL Priority Collateral or changing in any manner the rights of the ABL Agent, the ABL Secured Parties, or any ABL Credit Party with respect to the ABL Priority Collateral (including, subject to Section 2.4(f) hereof, the release of any Liens thereon), then such amendment, waiver or consent shall apply automatically to any comparable provision of each [Cash Flow] Collateral Document and each Additional [Cash Flow] Collateral Document, in each case without the consent of, or any action by, any [Cash Flow] Agent or any [Cash Flow] Secured Party or any Additional [Cash Flow] Agent or Additional [Cash Flow] Secured Party, as applicable; provided , that such amendment, waiver or consent does not materially adversely affect the rights of the [Cash Flow] Secured Parties or the Additional [Cash Flow] Secured Parties, as applicable, or the interests of the [Cash Flow] Secured Parties or the Additional [Cash Flow] Secured Parties, as applicable, in the [Cash Flow] Priority Collateral. The ABL Agent shall give written notice of such amendment, waiver or consent to the [Cash Flow] Agent and each Additional [Cash Flow] Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any [Cash Flow] Collateral Document or any Additional [Cash Flow] Collateral Document as set forth in this Section 7.4(b) .
(c) In the event that the ABL Agent that is the ABL Collateral Representative or the requisite ABL Secured Parties represented thereby enter into any amendment, waiver or consent in respect of or replacing any ABL Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departure from any provisions of, any ABL Collateral Document relating to the ABL Priority Collateral or changing in any manner the rights of the ABL Agent, the ABL Secured Parties, or any ABL Credit Party with respect to the ABL Priority Collateral (including, subject to Section 2.4(f) hereof, the release of any Liens thereon), then such amendment, waiver or consent shall apply automatically to any comparable provision of each ABL Collateral Document and each Additional ABL Collateral Document, in each case without the consent of, or any action by, any Additional ABL Agent or any Additional ABL Secured Party (except as may be separately otherwise agreed in writing by and between such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and the ABL Agent, on behalf of itself and the ABL Secured Parties); provided , that such amendment, waiver or consent does not materially adversely affect the rights or interests of the Additional ABL Secured Parties in the ABL Priority Collateral. The ABL Agent shall give written notice of such amendment, waiver or consent to each Additional ABL Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any Additional ABL Collateral Document as set forth in this Section 7.4(c) .
 
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(d) In the event that the [Cash Flow] Agent that is the [Cash Flow] Collateral Representative or the requisite [Cash Flow] Secured Parties represented thereby enter into any amendment, waiver or consent in respect of or replacing any [Cash Flow] Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any [Cash Flow] Collateral Document relating to the [Cash Flow] Priority Collateral or changing in any manner the rights of the [Cash Flow] Agent, the [Cash Flow] Secured Parties, or any [Cash Flow] Credit Party with respect to the [Cash Flow] Priority Collateral (including, subject to Section 2.4(f) hereof, the release of any Liens thereon), then such amendment, waiver or consent shall apply automatically to any comparable provision of each ABL Collateral Document and each Additional ABL Collateral Document, in each case without the consent of, or any action by, the ABL Agent or any ABL Secured Party or any Additional ABL Agent or Additional ABL Secured Party, as applicable (except as may be separately otherwise agreed in writing by and between the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, and ( x ) the ABL Agent, on behalf of itself and the ABL Secured Parties, and ( y ) any Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby); provided , that such amendment, waiver or consent does not materially adversely affect the rights or interests of the ABL Secured Parties or the Additional ABL Secured Parties, as applicable, in the ABL Priority Collateral. The [Cash Flow] Agent shall give written notice of such amendment, waiver or consent to the ABL Agent and each Additional ABL Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any ABL Collateral Document or Additional ABL Collateral Document as set forth in this Section 7.4(d) .
(e) In the event that the [Cash Flow] Agent that is the [Cash Flow] Collateral Representative or the requisite [Cash Flow] Secured Parties represented thereby enter into any amendment, waiver or consent in respect of or replacing any [Cash Flow] Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any [Cash Flow] Collateral Document relating to the [Cash Flow] Priority Collateral or changing in any manner the rights of the [Cash Flow] Agent, the [Cash Flow] Secured Parties, or any [Cash Flow] Credit Party with respect to the [Cash Flow] Priority Collateral (including, subject to Section 2.4(f) hereof, the release of any Liens thereon), then such amendment, waiver or consent shall apply automatically to any comparable provision of each Additional [Cash Flow] Collateral Document without the consent of, or any action by, any Additional [Cash Flow] Agent or Additional [Cash Flow] Secured Party (except as may be separately otherwise agreed in writing by and between such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties); provided , that such amendment, waiver or consent does not materially adversely affect the rights or interests of the Additional [Cash Flow] Secured Parties in the Collateral. The applicable [Cash Flow] Agent shall give written notice of such amendment, waiver or consent to each Additional [Cash Flow] Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any Additional [Cash Flow] Collateral Document as set forth in this Section 7.4(e) .
(f) In the event that any Additional [Cash Flow] Agent that is the [Cash Flow] Collateral Representative or the requisite Additional [Cash Flow] Secured Parties represented thereby enter into any amendment, waiver or consent in respect of or replacing any Additional
 
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[Cash Flow] Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Additional [Cash Flow] Collateral Document relating to the [Cash Flow] Priority Collateral or changing in any manner the rights of the Additional [Cash Flow] Agent, the Additional [Cash Flow] Secured Parties, or any Additional [Cash Flow] Credit Party with respect to the [Cash Flow] Priority Collateral (including, subject to Section 2.4(f) hereof, the release of any Liens thereon), then such amendment, waiver or consent shall apply automatically to any comparable provision of each ABL Collateral Document and each Additional ABL Collateral Document, in each case without the consent of, or any action by, the ABL Agent or any ABL Secured Party or any Additional ABL Agent or Additional ABL Secured Party, as applicable (except as may be separately otherwise agreed in writing by and between ( x ) such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and ( y ) the ABL Agent, on behalf of itself and the ABL Secured Parties, or such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby); provided , that such amendment, waiver or consent does not materially adversely affect the rights or interests of the ABL Secured Parties or the Additional ABL Secured Parties, as applicable, in the ABL Priority Collateral (including any license or right of use granted to them by any Credit Party pursuant to any ABL Collateral Document or Additional ABL Collateral Document (as applicable) with respect to Intellectual Property owned by such Credit Party as it pertains to the ABL Priority Collateral). The applicable Additional [Cash Flow] Agent shall give written notice of such amendment, waiver or consent to the ABL Agent and each Additional ABL Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any ABL Collateral Document or Additional ABL Collateral Document as set forth in this Section 7.4(f) .
(g) In the event that any Additional [Cash Flow] Agent that is the [Cash Flow] Collateral Representative or the requisite Additional [Cash Flow] Secured Parties represented thereby enter into any amendment, waiver or consent in respect of or replacing any Additional [Cash Flow] Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Additional [Cash Flow] Collateral Document relating to the [Cash Flow] Priority Collateral or changing in any manner the rights of the Additional [Cash Flow] Agent, the Additional [Cash Flow] Secured Parties, or any Additional [Cash Flow] Credit Party with respect to the [Cash Flow] Priority Collateral (including, subject to Section 2.4(f) hereof, the release of any Liens thereon), then such amendment, waiver or consent shall apply automatically to any comparable provision of each [Cash Flow] Collateral Document and (with respect to any other Additional [Cash Flow] Credit Facility) each Additional [Cash Flow] Collateral Document, in each case without the consent of, or any action by, the [Cash Flow] Agent or any [Cash Flow] Secured Party or (with respect to any other Additional [Cash Flow] Credit Facility) any other Additional [Cash Flow] Agent or related Additional [Cash Flow] Secured Party, as applicable (except as may be separately otherwise agreed in writing by and between ( x ) such Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby, and ( y ) the [Cash Flow] Agent, on behalf of itself and the [Cash Flow] Secured Parties, or such other Additional [Cash Flow] Agent, on behalf of itself and the Additional [Cash Flow] Secured Parties represented thereby); provided , that such amendment, waiver or consent does not materially adversely affect the rights or interests of the [Cash Flow] Secured Parties or such other Additional [Cash Flow] Secured Parties, as applicable, in the Collateral. The applicable
 
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Additional [Cash Flow] Agent shall give written notice of such amendment, waiver or consent to the [Cash Flow] Agent and each such other Additional [Cash Flow] Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any [Cash Flow] Collateral Document or Additional [Cash Flow] Collateral Document as set forth in this Section 7.4(g) .
(h) In the event that any Additional ABL Agent that is the ABL Collateral Representative or the requisite Additional ABL Secured Parties represented thereby enter into any amendment, waiver or consent in respect of or replacing any Additional ABL Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of any Additional ABL Collateral Document relating to the ABL Priority Collateral or changing in any manner the rights of such Additional ABL Agent, such Additional ABL Secured Parties, or any Additional ABL Credit Party with respect to the ABL Priority Collateral (including, subject to Section 2.4(f) hereof, the release of any Liens thereon), then such amendment, waiver or consent shall apply automatically to any comparable provision of each [Cash Flow] Collateral Document and each Additional [Cash Flow] Collateral Document, in each case without the consent of, or any action by, the [Cash Flow] Agent or any [Cash Flow] Secured Party or any Additional [Cash Flow] Agent or Additional [Cash Flow] Secured Party, as applicable; provided , that such amendment, waiver or consent does not materially adversely affect the rights or interests of the [Cash Flow] Secured Parties or the Additional [Cash Flow] Secured Parties, as applicable, in the [Cash Flow] Priority Collateral (including any license or right of use granted to them by any Credit Party pursuant to any [Cash Flow] Collateral Document or Additional [Cash Flow] Collateral Document (as applicable) with respect to Intellectual Property owned by such Credit Party as it pertains to the [Cash Flow] Priority Collateral). The applicable Additional ABL Agent shall give written notice of such amendment, waiver or consent to the [Cash Flow] Agent and each Additional [Cash Flow] Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any [Cash Flow] Collateral Document or Additional [Cash Flow] Collateral Document as set forth in this Section 7.4(h) .
(i) In the event that any Additional ABL Agent that is the ABL Collateral Representative or the requisite Additional ABL Secured Parties represented thereby enter into any amendment, waiver or consent in respect of or replacing any Additional ABL Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Additional ABL Collateral Document relating to the ABL Priority Collateral or changing in any manner the rights of such Additional ABL Agent, such Additional ABL Secured Parties, or any Additional ABL Credit Party with respect to the ABL Priority Collateral (including, subject to Section 2.4(f) hereof, the release of any Liens thereon), then such amendment, waiver or consent shall apply automatically to any comparable provision of each ABL Collateral Document and (with respect to any other Additional ABL Credit Facility) each Additional ABL Collateral Document, in each case without the consent of, or any action by, the ABL Agent or any ABL Secured Party or (with respect to any other Additional ABL Credit Facility) any other Additional ABL Agent or related Additional ABL Secured Party (except as may be separately otherwise agreed in writing by and between ( x ) such Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby, and ( y ) the ABL Agent, on behalf of itself and the ABL Secured Parties, or such other Additional ABL Agent, on behalf of itself and the Additional ABL Secured Parties represented thereby);
 
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provided , that such amendment, waiver or consent does not materially adversely affect the rights or interests of the ABL Secured Parties or such other Additional ABL Secured Parties in the Collateral. The applicable Additional ABL Agent shall give written notice of such amendment, waiver or consent to the ABL Agent and each such other Additional ABL Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any ABL Collateral Document or Additional ABL Collateral Document as set forth in this Section 7.4(i) .
Section 7.5 Addresses for Notices . Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, faxed, sent by electronic mail or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a facsimile or upon receipt of electronic mail sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) or five (5) days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section) shall be as set forth below or, as to each Party, at such other address as may be designated by such Party in a written notice to all of the other Parties.

ABL Agent:	  	Bank of America, N.A.	
		
	  	[        ]	
		
[Cash Flow] Agent:	  	[        ]	
		
Any Additional Agent:	  	As set forth in the Additional Indebtedness Joinder executed and delivered by such Additional Agent pursuant to Section 7.11 .	
Section 7.6 No Waiver, Remedies . No failure on the part of any Party to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
Section 7.7 Continuing Agreement, Transfer of Secured Obligations . This Agreement is a continuing agreement and shall ( a ) remain in full force and effect until the Discharge of ABL Obligations, the Discharge of [Cash Flow] Obligations and the Discharge of Additional Obligations shall have occurred, ( b ) be binding upon the Parties and their successors and assigns, and ( c ) inure to the benefit of and be enforceable by the Parties and their respective successors, transferees and assigns. Nothing herein is intended, or shall be construed, to give any other Person any right, remedy or claim under, to or in respect of this Agreement or any Collateral, subject to Section 7.10 hereof. All
 
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references to any Credit Party shall include any Credit Party as debtor-in-possession and any receiver or trustee for such Credit Party in any Insolvency Proceeding. Without limiting the generality of the foregoing clause (c), the ABL Agent, any ABL Secured Party, the [Cash Flow] Agent, any [Cash Flow] Secured Party, any Additional Agent or any Additional Secured Party may assign or otherwise transfer all or any portion of the ABL Obligations, the [Cash Flow] Obligations or any Additional Obligations, as applicable, to any other Person, and such other Person shall thereupon become vested with all the rights and obligations in respect thereof granted to the ABL Agent, the [Cash Flow] Agent, such ABL Secured Party, such [Cash Flow] Secured Party, such Additional Agent or such Additional Secured Party, as the case may be, herein or otherwise. The ABL Secured Parties, the [Cash Flow] Secured Parties and any Additional Secured Parties may continue, at any time and without notice to the other Parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness to, or for the benefit of, any Credit Party on the faith hereof.
Section 7.8 Governing Law; Entire Agreement . The validity, performance and enforcement of this Agreement, and the rights and obligations of the parties under this Agreement, shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules are not mandatorily applicable by statute and would require or permit the laws of another jurisdiction. This Agreement constitutes the entire agreement and understanding among the Parties with respect to the subject matter hereof and supersedes any prior agreements, written or oral, with respect thereto.
Section 7.9 Counterparts . This Agreement may be executed by one or more of the parties to this Agreement in any number of separate counterparts (including by telecopy or other electronic transmission), and all of such counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be delivered to the Company Representative and to each Agent.
Section 7.10 No Third Party Beneficiaries . This Agreement and the rights and benefits hereof shall inure to the benefit of each of the Parties hereto and its respective successors and assigns and shall inure to the benefit of each of the ABL Agent, the ABL Secured Parties, the [Cash Flow] Agent, the [Cash Flow] Secured Parties, each Additional Agent, the Additional Secured Parties and the Company and the other Credit Parties. No other Person shall have or be entitled to assert rights or benefits hereunder.
Section 7.11 Designation of Additional Indebtedness; Joinder of Additional Agents . (a) The Company Representative may designate any Additional Indebtedness complying with the requirements of the definition of “Additional Indebtedness” as Additional Indebtedness, and as either Additional ABL Indebtedness or Additional [Cash Flow] Indebtedness, for purposes of this Agreement, upon complying with the following conditions:
(i) one or more Additional Agents for one or more Additional Secured Parties in respect of such Additional Indebtedness shall have executed the Additional Indebtedness Joinder with respect to such Additional Indebtedness, and the Company Representative or any such Additional Agent shall have delivered such executed Additional Indebtedness Joinder to the ABL Agent, the [Cash Flow] Agent and any other Additional Agent then party to this Agreement;
 
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(ii) at least five Business Days (unless a shorter period is agreed in writing by the Parties and the Company Representative) prior to delivery of the Additional Indebtedness Joinder, the Company Representative shall have delivered to the ABL Agent, the [Cash Flow] Agent and any other Additional Agent then party to this Agreement complete and correct copies of any Additional Credit Facility, Additional Guarantees and Additional Collateral Documents that will govern such Additional Indebtedness upon giving effect to such designation (which may be unexecuted copies of Additional Documents to be executed and delivered concurrently with the effectiveness of such designation);
(iii) the Company Representative shall have executed and delivered to the ABL Agent, the [Cash Flow] Agent and any other Additional Agent then party to this Agreement an Additional Indebtedness Designation, with respect to such Additional Indebtedness, which Additional Indebtedness Designation shall designate such Additional Indebtedness as Additional ABL Indebtedness or Additional [Cash Flow] Indebtedness, as the case may be; and
(iv) all state and local stamp, recording, filing, intangible and similar taxes or fees (if any) that are payable in connection with the inclusion of such Additional Indebtedness under this Agreement shall have been paid and reasonable evidence thereof shall have been given to the ABL Agent, the [Cash Flow] Agent and any other Additional Agent then party to this Agreement.
(b) Upon satisfaction of the foregoing conditions, (i) the designated Additional Indebtedness shall constitute “ Additional Indebtedness ”, any Additional Credit Facility under which such Additional Indebtedness is or may be incurred shall constitute an “ Additional Credit Facility ”, any holder of such Additional Indebtedness or other applicable Additional Secured Party shall constitute an “ Additional Secured Party ”, and any Additional Agent for any such Additional Secured Party shall constitute an “ Additional Agent ”, (ii) any designated Additional [Cash Flow] Indebtedness shall constitute “ Additional [Cash Flow] Indebtedness ”, any Additional [Cash Flow] Credit Facility under which such Additional [Cash Flow] Indebtedness is or may be incurred shall constitute an “ Additional Credit Facility ” and an “ Additional [Cash Flow] Credit Facility ”, any holder of such Additional [Cash Flow] Indebtedness or other applicable Additional [Cash Flow] Secured Party shall constitute an “ Additional Secured Party ” and an “ Additional [Cash Flow] Secured Party ”, and any Additional [Cash Flow] Agent for any such Additional [Cash Flow] Secured Party shall constitute an “ Additional [Cash Flow] Agent ” and (iii) any designated Additional ABL Indebtedness shall constitute “ Additional ABL Indebtedness ”, any Additional ABL Credit Facility under which such Additional ABL Indebtedness is or may be incurred shall constitute an “ Additional ABL Credit Facility ”, any holder of such Additional ABL Indebtedness or other applicable Additional
 
127

ABL Secured Party shall constitute an “ Additional ABL Secured Party ”, and any Additional ABL Agent for any such Additional ABL Secured Party shall constitute an “ Additional ABL Agent ”, in each case for all purposes under this Agreement. The date on which the foregoing conditions shall have been satisfied with respect to such Additional Indebtedness is herein called the “ Additional Effective Date ”. Prior to the Additional Effective Date with respect to such Additional Indebtedness, all references herein to Additional Indebtedness shall be deemed not to take into account such Additional Indebtedness, and the rights and obligations of the ABL Agent, the [Cash Flow] Agent and any other Additional Agent then party to this Agreement shall be determined on the basis that such Additional Indebtedness is not then designated. On and after the Additional Effective Date with respect to such Additional Indebtedness, all references herein to Additional Indebtedness shall be deemed to take into account such Additional Indebtedness, and the rights and obligations of the ABL Agent, the [Cash Flow] Agent and any other Additional Agent then party to this Agreement shall be determined on the basis that such Additional Indebtedness is then designated.
(c) In connection with any designation of Additional Indebtedness pursuant to this Section 7.11 , each of the ABL Agent, the [Cash Flow] Agent and any Additional Agent then party hereto agrees at the Company’s expense (x) to execute and deliver any amendments, amendments and restatements, restatements or waivers of or supplements to or other modifications to, any [Cash Flow] Collateral Documents, ABL Collateral Documents or Additional Collateral Documents, as applicable, and any blocked account, control or other agreements relating to any security interest in Control Collateral or Cash Collateral, and to make or consent to any filings or take any other actions, as may be reasonably deemed by the Company Representative to be necessary or reasonably desirable for any Lien on any Collateral to secure such Additional Indebtedness to become a valid and perfected Lien (with the priority contemplated by this Agreement), provided that such amendment, restatement, waiver or supplement does not adversely affect the validity, perfection or priority of the Lien of such Agent (subject, as to priority, to the provisions of this Agreement) and (y) otherwise to reasonably cooperate to effectuate a designation of Additional Indebtedness pursuant to this Section 7.11 (including, if requested, by executing an acknowledgment of any Additional Indebtedness Joinder or of the occurrence of any Additional Effective Date).
Section 7.12 [Cash Flow] Collateral Representative and ABL Collateral Representative; Notice of Change . The [Cash Flow] Collateral Representative shall act for the [Cash Flow] Collateral Secured Parties as provided in this Agreement, and shall be entitled to so act at the direction of the Requisite [Cash Flow] Holders from time to time. Until a Party (other than the existing [Cash Flow] Collateral Representative) receives written notice from the existing [Cash Flow] Collateral Representative, in accordance with Section 7.5 of this Agreement, of a change in the identity of the [Cash Flow] Collateral Representative, such Party shall be entitled to act as if the existing [Cash Flow] Collateral Representative is in fact the [Cash Flow] Collateral Representative. Each Party (other than the existing [Cash Flow] Collateral Representative) shall be entitled to rely upon any written notice of a change in the identity of the [Cash Flow] Collateral Representative which facially appears to be from the then existing [Cash Flow] Collateral Representative and is delivered in accordance with Section 7.5 and such Agent shall not be required to inquire into the veracity or genuineness of such notice. Each existing [Cash Flow] Collateral Representative from time to time agrees to give prompt written notice to each Party of any change in the identity of the [Cash Flow] Collateral Representative.
 
128

The ABL Collateral Representative shall act for the ABL Collateral Secured Parties as provided in this Agreement, and shall be entitled to so act at the direction of the Requisite ABL Holders from time to time. Until a Party (other than the existing ABL Collateral Representative) receives written notice from the existing ABL Collateral Representative, in accordance with Section 7.5 of this Agreement, of a change in the identity of the ABL Collateral Representative, such Party shall be entitled to act as if the existing ABL Collateral Representative is in fact the ABL Collateral Representative. Each Party (other than the existing ABL Collateral Representative) shall be entitled to rely upon any written notice of a change in the identity of the ABL Collateral Representative which facially appears to be from the then existing ABL Collateral Representative and is delivered in accordance with Section 7.5 and such Agent shall not be required to inquire into the veracity or genuineness of such notice. Each existing ABL Collateral Representative from time to time agrees to give prompt written notice to each Party of any change in the identity of the ABL Collateral Representative.
Section 7.13 Provisions Solely to Define Relative Rights . The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the ABL Secured Parties, the [Cash Flow] Secured Parties and any Additional Secured Parties, respectively. Nothing in this Agreement is intended to or shall impair the rights of the Company or any other Credit Party, or the obligations of the Company or any other Credit Party to pay the ABL Obligations, the [Cash Flow] Obligations and any Additional Obligations as and when the same shall become due and payable in accordance with their terms.
Section 7.14 Severability . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 7.15 Attorneys’ Fees . The Parties agree that if any dispute, arbitration, litigation or other proceeding is brought with respect to the enforcement of this Agreement or any provision hereof, the prevailing Party in such dispute, arbitration, litigation, or other proceeding shall be entitled to recover its reasonable attorneys’ fees and all other costs and expenses incurred in the enforcement of this Agreement, irrespective of whether suit is brought.
Section 7.16 VENUE; JURY TRIAL WAIVER . (a) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY ( I ) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
 
129

RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF, ( II ) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND AGREES NOT TO PLEAD OR CLAIM THE SAME, ( III ) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE APPLICABLE PARTY AT THE ADDRESS SPECIFIED IN SECTION 7.5 OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED PURSUANT THERETO, ( IV ) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION AND ( V ) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY CONSEQUENTIAL OR PUNITIVE DAMAGES.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
Section 7.17 Intercreditor Agreement . This Agreement is the “Base Intercreditor Agreement” referred to in the ABL Credit Agreement, the [“Base Intercreditor Agreement”] referred to in the [Cash Flow] Credit Agreement and the [“Base Intercreditor Agreement”] referred to in any Additional Credit Facility. Nothing in this Agreement shall be deemed to subordinate the right of any ABL Secured Party or any Additional ABL Secured Party to receive payment to the right of any [Cash Flow] Secured Party or any Additional [Cash Flow] Secured Party to receive payment or of any [Cash Flow] Secured Party or any Additional [Cash Flow] Secured Party to receive payment to the right of any ABL Secured Party or any Additional ABL Secured Party to receive payment (whether before or after the occurrence of an Insolvency Proceeding), it being the intent of the Parties that this Agreement shall effectuate a subordination of Liens as between the ABL Secured Parties, or any Additional ABL Secured Parties, on the one hand, and the [Cash Flow] Secured Parties or any Additional [Cash Flow] Secured Parties, on the other hand, but not a subordination of Indebtedness.
Section 7.18 No Warranties or Liability . The [Cash Flow] Agent, the ABL Agent and any Additional Agent each acknowledges and agrees that none of the other Parties has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other ABL Document, any other [Cash Flow] Document or any other Additional Document. Except as otherwise provided in this
 
130

Agreement, the [Cash Flow] Agent, the ABL Agent and any Additional Agent will be entitled to manage and supervise their respective extensions of credit to any Credit Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.
Section 7.19 Conflicts . In the event of any conflict between the provisions of this Agreement and the provisions of any ABL Document, any [Cash Flow] Document or any Additional Document, the provisions of this Agreement shall govern. The parties hereto acknowledge that the terms of this Agreement are not intended to negate any specific rights granted to, or obligations of, the Company or any other Credit Party in the [Cash Flow] Documents, the ABL Documents or any Additional Documents.
Section 7.20 Information Concerning Financial Condition of the Credit Parties . None of the [Cash Flow] Agent, the ABL Agent and any Additional Agent has any responsibility for keeping any other Party informed of the financial condition of the Credit Parties or of other circumstances bearing upon the risk of non-payment of the ABL Obligations, the [Cash Flow] Obligations or any Additional Obligations. The [Cash Flow] Agent, the ABL Agent and any Additional Agent hereby agree that no Party shall have any duty to advise any other Party of information known to it regarding such condition or any such circumstances. In the event the [Cash Flow] Agent, the ABL Agent or any Additional Agent, in its sole discretion, undertakes at any time or from time to time to provide any information to any other Party to this Agreement, it shall be under no obligation (A) to provide any such information to such other Party or any other Party on any subsequent occasion, (B) to undertake any investigation not a part of its regular business routine, or (C) to disclose any other information.
Section 7.21 Excluded Assets . For the avoidance of doubt, nothing in this Agreement (including Sections 2.1 , 2.5 , 4.1 , 6.1 and 6.9 hereof) shall be deemed to provide or require that any Agent or any Secured Party represented thereby receive any Proceeds of, or any Lien on, any Property of any Credit Party that constitutes “Excluded Assets” under (and as defined in) the applicable Credit Facility or any related Credit Document to which such Agent is a party.
[Signature pages follow]
 
131

IN WITNESS WHEREOF, the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and the [Cash Flow] Agent, for and on behalf of itself and the [Cash Flow] Secured Parties, have caused this Agreement to be duly executed and delivered as of the date first above written.

BANK OF AMERICA, N.A.	
	 	as the ABL Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[            ],	
	 	as the [Cash Flow] Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
[S IGNATURE P AGE TO I NTERCREDITOR A GREEMENT ]

ACKNOWLEDGMENT
Each Credit Party hereby acknowledges that it has received a copy of this Agreement and consents thereto, agrees to recognize all rights granted thereby to the ABL Agent, the ABL Secured Parties, the [Cash Flow] Agent, the [Cash Flow] Secured Parties, any Additional Agent and any Additional Secured Parties and will not do any act or perform any obligation which is not in accordance with the agreements set forth in this Agreement.
CREDIT PARTIES:

UNISOURCE WORLDWIDE, INC.	
		
By:	 	 	
Name:	 		
Title:	 		
	
XPEDX, LLC	
		
By:	 	 	
Name:	 		
Title:	 		
	
[GUARANTORS]	
		
By:	 	 	
Name:	 		
Title:	 		
[S IGNATURE P AGE TO A CKNOWLEDGEMENT TO I NTERCREDITOR A GREEMENT ]

EXHIBIT A
ADDITIONAL INDEBTEDNESS DESIGNATION
DESIGNATION dated as of              , 20    , by UNISOURCE WORLDWIDE, INC. (the “ Company ”). Capitalized terms used herein and not otherwise defined herein shall have the meaning specified in the Intercreditor Agreement (as amended, supplemented, waived or otherwise modified from time to time, the “ Intercreditor Agreement ”) entered                      into                      as                     of [        ] between BANK OF AMERICA, N.A., as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined in the Intercreditor Agreement, the “ ABL Agent ”) for the ABL Secured Parties and [            ], as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined in the Intercreditor Agreement, the “ [Cash Flow] Agent ”) for the [Cash Flow] Secured Parties. 4
Reference is made to that certain [insert name of Additional Credit Facility], dated as of              , 20     (the “ Additional Credit Facility ”), among [list any applicable Credit Party], [list Additional Secured Parties] [and Additional Agent, as agent (the “ Additional Agent ”)]. 5
Section 7.11 of the Intercreditor Agreement permits the Company to designate Additional Indebtedness under the Intercreditor Agreement. Accordingly:
Section 1. Representations and Warranties . The Company hereby represents and warrants to the ABL Agent, the [Cash Flow] Agent, and any Additional Agent that:
(1) the Additional Indebtedness incurred or to be incurred under the Additional Credit Facility constitutes “ Additional Indebtedness ” which complies with the definition of such term in the Intercreditor Agreement;
(2) all conditions set forth in Section 7.11 of the Intercreditor Agreement with respect to the Additional Indebtedness have been satisfied; and
(3) any applicable requirement that no Event of Default or Specified Default exist or arise from the issuance of such Additional Indebtedness, or any applicable comparable requirement, has been satisfied or waived.
Section 2. Designation of Additional Indebtedness . The Company hereby designates such Additional Indebtedness as Additional Indebtedness and as Additional [ABL] / [Cash Flow] Indebtedness under the Intercreditor Agreement.

4  	Revise as appropriate to refer to any successor ABL Agent or [Cash Flow] Agent and to add reference to any previously added Additional Agent.	
5  	Revise as appropriate to refer to the relevant Additional Credit Facility, Additional Secured Parties and any Additional Agent.	

Exhibit A
Page 2
 
IN WITNESS WHEREOF, the undersigned has caused this Designation to be duly executed by its duly authorized officer or other representative, all as of the day and year first above written.

UNISOURCE WORLDWIDE, INC.	
		
By:	 	 	
	 	Name:	
	 	Title:	

EXHIBIT B
ADDITIONAL INDEBTEDNESS JOINDER
JOINDER, dated as of             , 20    , among UNISOURCE WORLDWIDE, INC. (the “ Company ”), BANK OF AMERICA, N.A., as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined in the Intercreditor Agreement, the “ ABL Agent ”) 6 for the ABL Secured Parties, [        ], as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined in the Intercreditor Agreement, the “ [Cash Flow] Agent ”) 7 for the [Cash Flow] Secured Parties, [list any previously added Additional Agent] [and insert name of each Additional Agent under any Additional Credit Facility being added hereby as party] and any successors or assigns thereof, to the Intercreditor Agreement dated as of [                    ] (as amended, supplemented, waived or otherwise modified from time to time, the “ Intercreditor Agreement ”) among the ABL Agent, [and] the [Cash Flow] Agent [and (list any previously added Additional Agent)]. Capitalized terms used herein and not otherwise defined herein shall have the meaning specified in the Intercreditor Agreement.
Reference is made to that certain [insert name of Additional Credit Facility], dated as of              , 20     (the “ Additional Credit Facility ”), among [list any applicable Credit Party], [list any applicable Additional Secured Parties (the “ Joining Additional Secured Parties ”)] [and insert name of each applicable Additional Agent (the “ Joining Additional Agent ”)]. 8
Section 7.11 of the Intercreditor Agreement permits the Company to designate Additional Indebtedness under the Intercreditor Agreement. The Company has so designated Additional Indebtedness incurred or to be incurred under the Additional Credit Facility as Additional Indebtedness and as Additional [ABL] / [Cash Flow] Indebtedness by means of an Additional Indebtedness Designation.
Accordingly, [the Joining Additional Agent, for itself and on behalf of the Joining Additional Secured Parties,] 9 hereby agrees with the ABL Agent, the [Cash Flow] Agent and any other Additional Agent party to the Intercreditor Agreement as follows:
Section 1. Agreement to Be Bound . The [Joining Additional Agent, for itself and on behalf of the Joining Additional Secured Parties,] 10 hereby agrees to be bound by the terms and provisions of the Intercreditor Agreement and shall, as of the Additional Effective Date with respect to the Additional Credit Facility, be deemed to be a party to the Intercreditor Agreement.

6  	Revise as appropriate to refer to any successor ABL Agent.	
7  	Revise as appropriate to refer to any successor [Cash Flow] Agent.	
8  	Revise as appropriate to refer to the relevant Additional Credit Facility, Additional Secured Parties and any Additional Agent.	
9  	Revise as appropriate to refer to any Additional Agent being added hereby and any Additional Secured Parties represented thereby.	
10  	Revise references throughout as appropriate to refer to the party or parties being added.	

Exhibit B
Page 2
 
Section 2. Recognition of Claims . The ABL Agent (for itself and on behalf of the ABL Secured Parties), the [Cash Flow] Agent (for itself and on behalf of the [Cash Flow] Secured Parties) and [each of] the Additional Agent[s](for itself and on behalf of any Additional Secured Parties represented thereby) hereby agree that the interests of the respective Secured Parties in the Liens granted to the ABL Agent, the [Cash Flow] Agent, or any Additional Agent, as applicable, under the applicable Credit Documents shall be treated, as among the Secured Parties, as having the priorities provided for in Section 2.1 of the Intercreditor Agreement, and shall at all times be allocated among the Secured Parties as provided therein regardless of any claim or defense (including any claims under the fraudulent transfer, preference or similar avoidance provisions of applicable bankruptcy, insolvency or other laws affecting the rights of creditors generally) to which the ABL Agent, the [Cash Flow] Agent, any Additional Agent or any Secured Party may be entitled or subject. The ABL Agent (for itself and on behalf of the ABL Secured Parties), the [Cash Flow] Agent (for itself and on behalf of the [Cash Flow] Secured Parties), and any Additional Agent party to the Intercreditor Agreement (for itself and on behalf of any Additional Secured Parties represented thereby) (a) recognize the existence and validity of the Additional Obligations represented by the Additional Credit Facility, and (b) agree to refrain from making or asserting any claim that the Additional Credit Facility or other applicable Additional Documents are invalid or not enforceable in accordance with their terms as a result of the circumstances surrounding the incurrence of such obligations. The [Joining Additional Agent (for itself and on behalf of the Joining Additional Secured Parties] (a) recognize[s] the existence and validity of the ABL Obligations, the existence and validity of the [Cash Flow] Obligations [and the existence and validity of the Additional Obligations] 11 and (b) agree[s] to refrain from making or asserting any claim that the ABL Credit Agreement, the [Cash Flow] Credit Agreement, the other ABL Documents or [Cash Flow] Documents or the Additional Credit Facility or the Additional Documents] 12 , as the case may be, are invalid or not enforceable in accordance with their terms as a result of the circumstances surrounding the incurrence of such obligations.
Section 3. Notices . Notices and other communications provided for under the Intercreditor Agreement to be provided to [the Joining Additional Agent] shall be sent to the address set forth on Annex 1 attached hereto (until notice of a change thereof is delivered as provided in Section 7.5 of the Intercreditor Agreement).
Section 4. Miscellaneous . THE VALIDITY, PERFORMANCE AND ENFORCEMENT OF THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE LAWS OF ANOTHER JURISDICTION.
[Add Signatures]

11  	Add reference to any previously added Additional Obligations, as appropriate.	
12  	Add reference to any previously added Additional Credit Facility and related Additional Documents, as appropriate.	

EXHIBIT C
[ABL CREDIT AGREEMENT][[CASH FLOW] CREDIT AGREEMENT][ADDITIONAL CREDIT FACILITY] JOINDER
JOINDER, dated as of             , 20    , among BANK OF AMERICA, N.A., as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined in the Intercreditor Agreement, the “ ABL Agent ”) 13 for the ABL Secured Parties, [        ], as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined in the Intercreditor Agreement, the “ [Cash Flow] Agent ”) 14 for the [Cash Flow] Secured Parties, [list any previously added Additional Agent] [and insert name of additional [Cash Flow] Secured Parties, [Cash Flow] Agent, ABL Secured Parties or ABL Agent, as applicable, being added hereby as party] and any successors or assigns thereof, to the Intercreditor Agreement dated as of [                    ] (as amended, supplemented, waived or otherwise modified from time to time, the “ Intercreditor Agreement ”) among the ABL Agent 15 , [and] the [Cash Flow] Agent 16 [and (list any previously added Additional Agent)]. Capitalized terms used herein and not otherwise defined herein shall have the meaning specified in the Intercreditor Agreement.
Reference is made to that certain [insert name of new facility], dated as of                  , 20    (the “ Joining [ABL Credit Agreement][[Cash Flow] Credit Agreement][Additional Credit Facility] ”), among [list any applicable Credit Party], [list any applicable new ABL Secured Parties, [Cash Flow] Secured Parties or Additional Secured Parties, as applicable (the “ Joining [ABL Secured Parties][[Cash Flow] Secured Parties][Additional Secured Parties] ”)] [and insert name of each applicable Agent (the “ Joining [ABL][[Cash Flow]][Additional] Agent ”)]. 17
The Joining [ABL][[Cash Flow]][Additional] Agent, for itself and on behalf of the Joining [ABL Secured Parties][[Cash Flow] Secured Parties][Additional Secured Parties], 18 hereby agrees with the Company and the other Grantors, the [ABL][ [Cash Flow]][Additional] Agent and any other Additional Agent party to the Intercreditor Agreement as follows:
Section 1. Agreement to Be Bound . The [Joining [ABL][[Cash Flow]][Additional] Agent, for itself and on behalf of the Joining [ABL Secured Parties][[Cash Flow] Secured Parties][Additional Secured Parties],] 19 hereby agrees to be bound by the terms

13  	Revise as appropriate to refer to any successor ABL Agent.	
14  	Revise as appropriate to refer to any successor [Cash Flow] Agent.	
15  	Revise as appropriate to describe predecessor ABL Agent or ABL Secured Parties, if joinder is for a new ABL Credit Agreement.	
16  	Revise as appropriate to describe predecessor [Cash Flow] Agent or [Cash Flow] Secured Parties, if joinder is for a new [Cash Flow] Credit Agreement.	
17  	Revise as appropriate to refer to the new credit facility, Secured Parties and Agents.	
18  	Revise as appropriate to refer to any Agent being added hereby and any Secured Parties represented thereby.	
19  	Revise references throughout as appropriate to refer to the party or parties being added.	

Exhibit C
Page 2
 
and provisions of the Intercreditor Agreement and shall, as of the date hereof, be deemed to be a party to the Intercreditor Agreement as [the][a] [ABL] [[Cash Flow]] [Additional] Agent. As of the date hereof, the Joining [ABL Credit Agreement][[Cash Flow] Credit Agreement][Additional Credit Facility] shall be deemed [the][a] [ABL Credit Agreement] [[Cash Flow] Credit Agreement] [Additional Credit Facility] under the Intercreditor Agreement, and the obligations thereunder are subject to the terms and provisions of the Intercreditor Agreement.
Section 2. Notices . Notices and other communications provided for under the Intercreditor Agreement to be provided to the Joining [ABL] [[Cash Flow]] [Additional] Agent shall be sent to the address set forth on Annex 1 attached hereto (until notice of a change thereof is delivered as provided in Section 7.5 of the Intercreditor Agreement).
Section 3. Miscellaneous . THE VALIDITY, PERFORMANCE AND ENFORCEMENT OF THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE LAWS OF ANOTHER JURISDICTION.
[ADD SIGNATURES]

EXHIBIT F-1 TO
ABL CREDIT AGREEMENT
FORM OF BORROWING REQUEST
Reference is made to the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto. Unless otherwise defined herein, terms defined in the ABL Credit Agreement and used herein shall have the meanings given to them in the ABL Credit Agreement.
[The undersigned hereby gives irrevocable notice, pursuant to subsection 2.2 of the ABL Credit Agreement, of a request for a Borrowing of Loans as follows 4 :

Borrower Name:	  	                                                                 	
		
Principal Amount of Borrowing:	  	$        	
		
Date of Borrowing:	  	            , 20    	
		
Type of Loan:	  		
		
[Eurocurrency Loans] [ABR Loans]	  		
		
[Interest Period:	  	Months	
		
Amount of Eurocurrency Loans	  		
	  	                    ] 5	
		
Loan Denomination:	  	Dollars]	

4  	Use this paragraph for Borrowing of U.S. Facility Revolving Credit Loans.	
5  	Provide only if requested Borrowing is entirely or partly of Eurocurrency Loans.	
 
F-1-1

[The undersigned hereby gives irrevocable notice, pursuant to subsection 2.2 of the ABL Credit Agreement, of a request for a Borrowing of Loans as follows 6 :

Borrower Name:	  	                                                         	
		
Principal Amount of Borrowing:	  	[Cdn]$	
		
Date of Borrowing:	  	            , 20    	
		
 Type of Loan:	  		
	
[Eurocurrency Loans] [ABR Loans] [BA Equivalent Loans]	
		
[Interest Period:	  	Months	
		
[Amount of [Eurocurrency Loans] [BA
Equivalent Loans]	  	                    ] 7	
		
Loan Denomination:	  	[Canadian Dollars][Dollars] 8 ]	
The requested Borrowing of Loans is to be wired as follows:
[Name of Bank]
[City of Bank]
Beneficiary:
Account No.:
ABA No.:
Attn:

6  	Use this paragraph for Borrowing of the Canadian Facility Revolving Credit Loans.	
7  	Provide only if requested Borrowing is entirely or partly of Eurocurrency Loans or BA Equivalent Loans	
8  	Provide only if requested Borrowing is entire or partly of ABR Loans.	
 
F-1-2

[Signature Page Follows]
 
F-1-3

IN WITNESS WHEREOF, Borrower Representative has caused this Borrowing Request to be executed and delivered by its duly authorized officer to the Agent as of the date first set forth above.

[BORROWER REPRESENTATIVE]	
		
By:	 	 	
	 	Name:	
		
	 	Title:	
 
F-1-4

EXHIBIT F-2 TO
ABL CREDIT AGREEMENT
FORM OF LETTER OF CREDIT REQUEST
Dated                      1
[Name of Issuing Lender], as Issuing Lender under the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the ABL Credit Agreement.
Bank of America, N.A.
[Notice Address]

1  	Date of Letter of Credit Request.	
 
F-2-1

Letter of Credit Issuer: [Name of Issuing Lender ]
[                                         ]
[                                         ]
[                                         ]
Attention: [                    ] 2
Ladies and Gentlemen:
Pursuant to subsection 3.1 of the ABL Credit Agreement, we hereby request that the Issuing Lender referred to above issue a [commercial] [standby] Letter of Credit for the account of the undersigned on                      3 (the “ Date of Issuance ”) in the aggregate amount of                      4 .
For purposes of this Letter of Credit Request, unless otherwise defined herein, all capitalized terms used herein which are defined in the ABL Credit Agreement shall have the respective meanings provided therein.
The beneficiary of the requested Letter of Credit will be                      5 , and such Letter of Credit will be in support of                      6 and will have a stated expiration date of                      7 .

	 	[BORROWER REPRESENTATIVE]	
		
By:	 	 	
	 	Name:	
	 	Title:	

2  	Insert name and address of Issuing Lender.	
3  	Date of issuance which shall be (x) a Business Day and (y) at least three days from the date hereof (or such shorter period as is acceptable to the respective Issuing Lender in any given case).	
4  	Insert aggregate amount.	
5  	Insert name and address of beneficiary.	
6  	Insert description of relevant obligations.	
7  	Insert the last date upon which drafts may be presented which, unless otherwise agreed by the Agent, may not be later after its date of issuance.	
 
F-2-2

EXHIBIT G
to
CREDIT AGREEMENT
 
1 This instrument was prepared in consultation with counsel in the state in which the Premises is located by the attorney named below and after recording, please return to:

[                    ]
[                    ]
[                    ]

STATE OF	 	 	  		  	 	  		

COUNTY OF	 	 	  		  		  		
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT
OF LEASES AND RENTS AND FIXTURE FILING
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING (the “Mortgage”) is made and entered into as of the      day of [                    ], by [                    ], a [                    ], with an address as of the date hereof at [                    ], Attention: [                    ] (the “Mortgagor”), for the benefit of Bank of America, N.A., in its capacity as Administrative Agent and ABL Collateral Agent for the Secured Parties, with an address as of the date hereof at [                    ], Attention: [                    ] (in such capacity, the “Mortgagee”). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement (as defined below).
RECITALS :
WHEREAS, the [Parent Borrower], the other Borrowers from time to time party thereto, Mortgagee, the Lenders from time to time party thereto, and the other financial institutions from time to time party thereto entered into that certain ABL Credit Agreement, dated as of July [ — ], 2014 (as the same may be amended, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”);
WHEREAS, the Mortgagor is the owner of the fee simple interest in the real property described on Exhibit A attached hereto and incorporated herein by reference;
WHEREAS, the Credit Agreement contemplates that the Mortgagor shall execute and deliver to the Mortgagee this Mortgage;

1  	Local counsel to advise as to any recording requirements for the cover page, including need for recording tax notification or a separate tax affidavit.	

WHEREAS, concurrently with the entering into of the Credit Agreement, the [Borrower/Mortgagor] and certain subsidiaries and affiliates thereof have entered into that certain [U.S.] 2 [Canadian] 3 Guarantee and Collateral Agreement, dated as of July [ — ], 2014, in favor of the Mortgagee (as the same may be amended, supplemented, waived or otherwise modified from time to time, the “Guarantee and Collateral Agreement”);
WHEREAS, this Mortgage is given by the Mortgagor in favor of the Mortgagee for its benefit and the benefit of the other Secured Parties to secure the payment and performance of all of the Obligations (as defined in the Guarantee and Collateral Agreement) of Mortgagor under the Guarantee and Collateral Agreement (such Obligations being hereinafter referred to as the “Obligations”).
W I T N E S S E T H :
The Mortgagor, in consideration of the indebtedness herein recited and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, has irrevocably granted, released, sold, remised, bargained, assigned, pledged, warranted, mortgaged, transferred and conveyed, and does hereby grant, release, sell, remise, bargain, assign, pledge, warrant, mortgage, transfer and convey to the Mortgagee and the Mortgagee’s successors and assigns, a continuing security interest in and to, and lien upon, all of the Mortgagor’s right, title and interest in and to the following described land, real property interests, buildings, improvements and fixtures:
(a) All that tract or parcel of land and other real property interests in                      County,                     , as more particularly described in Exhibit A attached hereto and made a part hereof, together with any greater or additional estate therein as hereafter may be acquired by Mortgagor (the “Land”), and all of the Mortgagor’s right, title and interest in and to rights appurtenant thereto, including easement rights;
(b) All buildings and improvements of every kind and description now or hereafter situated, erected or placed on the Land (the “Improvements”) and all materials, equipment and apparatus and fixtures now or hereafter owned by the Mortgagor and attached to or installed in and used in connection with the aforesaid Land and Improvements (collectively, the “Fixtures”) (hereinafter, the Land, the Improvements and the Fixtures may be collectively referred to as the “Premises.” As used in the Mortgage, the term “Premises” shall mean all or, where the context permits or requires, any portion of the above or any interest therein.); and
(c) Subject to the terms of any applicable Intercreditor Agreement (as defined in the Guarantee and Collateral Agreement), any and all cash proceeds and noncash proceeds from the conversion, voluntary or involuntary, of any of the Premises or any portion thereof into cash or liquidated claims, including (i) proceeds of any insurance, indemnity, warranty, guaranty or claim payable to the Mortgagee or to the Mortgagor from time to time with respect to any of the Premises, (ii) payments (in any form whatsoever) made or due and payable to the Mortgagor in connection with any condemnation, seizure or similar proceeding and (iii) other amounts from time to time paid or payable under or in connection with any of the Premises, including, without limitation, refunds of real estate taxes and assessments, including interest thereon, but in each case under this clause (c) excluding Excluded Assets (as defined in the Guarantee and Collateral Agreement).

2  	Include if Mortgagor is a U.S. Loan Party.	
3  	Include if Mortgagor is a Canadian Loan Party.	
 
2

TO HAVE AND HOLD the same, together with all privileges, hereditaments, easements and appurtenances thereunto belonging, subject to Permitted Liens, to the Mortgagee and the Mortgagee’s successors and assigns to secure the Obligations; provided that, should (i) the Obligations Satisfaction Date (as defined below) occur, or (ii) conditions set forth in the Credit Agreement for the release of this Mortgage be fully satisfied, the lien and security interest of this Mortgage shall cease, terminate and be void and the Mortgagee or its successor or assign shall promptly cause a release of this Mortgage to be filed in the appropriate office; and until such obligations are fully satisfied, it shall remain in full force and virtue.
And, as additional security for the Obligations, subject to the Credit Agreement or the Guarantee and Collateral Agreement, as applicable, the Mortgagor hereby unconditionally assigns to the Mortgagee all the security deposits, rents, issues, profits and revenues of the Premises from time to time accruing (the “Rents and Profits”), which assignment constitutes a present, absolute and unconditional assignment and not an assignment for additional security only, reserving only the right to the Mortgagor to collect and apply the same as the Mortgagor chooses as long as no Event of Default has occurred and is continuing.
As additional collateral and further security for the Obligations, subject to the Credit Agreement or the Guarantee and Collateral Agreement, as applicable, the Mortgagor does hereby assign to the Mortgagee and grants to the Mortgagee a security interest in all of the right, title and the interest of the Mortgagor in and to any and all real property leases and rental agreements (collectively, the “Leases”) with respect to the Premises or any part thereof, and the Mortgagor agrees to execute and deliver to the Mortgagee such additional instruments, in form and substance reasonably satisfactory to the Mortgagee, as may hereafter be requested by the Mortgagee to evidence and confirm said assignment; provided, however, that acceptance of any such assignment shall not be construed to impose upon the Mortgagee any obligation with respect thereto.
The Mortgagor covenants, represents and agrees as follows:
ARTICLE I
Obligations Secured
1.1 Obligations . The Mortgagee and the Lenders have agreed to establish a senior secured credit facility in favor of the [Borrowers/Mortgagor] pursuant to the terms of the Credit Agreement. This Mortgage is given to secure the payment and performance by the Mortgagor of the Obligations. [The maximum amount of the obligations secured hereby will not exceed $        , plus, to the extent permitted by applicable law, collection costs, sums advanced for the payment of taxes, assessments, maintenance and repair charges, insurance premiums and any other costs incurred to protect the security encumbered hereby or the lien hereof, expenses incurred by the Mortgagee by reason of any default by the Mortgagor under the terms hereof, together with interest thereon, all of which amount shall be secured hereby.] 4
1.2 Future Advances . This Mortgage is given to secure the Obligations and the repayment of the aforesaid obligations together with any renewals or extensions or modifications thereof upon the same

4  	To be included in states that impose mortgage recording tax and subject to applicable laws.	
 
3

or different terms or at the same or different rate of interest and also to secure all future advances and re-advances that may subsequently be made to the Borrowers/Mortgagor or any other Loan Party by the Lenders pursuant to the Credit Agreement. The lien of such future advances and re-advances shall relate back to the date of this Mortgage. Portions of the Loans represent revolving credit and letter of credit accommodations, all or any part of which may be advanced to or for the benefit of the [Borrowers/Mortgagor] or the Guarantors, repaid by the [Borrowers/Mortgagor] or the Guarantors and re-advanced to or for the benefit of the [Borrowers/Mortgagor] or the Guarantors from time to time subject to the terms of the Credit Agreement. The Mortgagor agrees that if the outstanding balance of any Obligation or revolving credit or letter of credit accommodation or all of the Loans, principal and interest, is ever repaid to zero, the lien of this Mortgage shall not be or be deemed released or extinguished by operation of law or implied intent of the parties. This Mortgage shall remain in full force and effect as to any further advances made under the Credit Agreement after any such zero balance until the Loans are repaid in full and the Commitments have terminated (the date upon which both of such events have occurred, the “Obligations Satisfaction Date”) or this Mortgage has been cancelled or released of record, and the Mortgagor waives, to the fullest extent permitted by applicable law, the operation of any applicable statute, case law or regulation having contrary effect.
1.3 No Release . Nothing set forth in this Mortgage shall impose any obligation on the Mortgagee or any other Secured Party to perform or observe any term, covenant, condition or agreement on the Mortgagor’s part to be so performed or observed or shall impose any liability on the Mortgagee or any other Secured Party for any act or omission on the part of the Mortgagor relating thereto or for any breach of any representation or warranty on the part of the Mortgagor contained in this Mortgage or any other Loan Document, or under or in respect of the Premises or made in connection herewith or therewith.
ARTICLE II
Mortgagor’s Covenants, Representations and Agreements
2.1 Taxes and Fees; Maintenance of Premises . The Mortgagor agrees to comply with Sections 7.3, 7.5(a)(i) and 11.5 of the Credit Agreement, in each case in accordance with and to the extent provided therein.
2.2 Casualty . The Mortgagor agrees to comply with Section 7.5(b)(iv) of the Credit Agreement, in accordance with and to the extent provided therein.
2.3 Additional Documents . The Mortgagor agrees to comply with Section 7.9(d) of the Credit Agreement, in accordance with and to the extent provided therein.
2.4 Fees and Expenses . The Mortgagor will promptly pay upon demand any and all reasonable costs and expenses of the Mortgagee, including, without limitation, reasonable attorneys’ fees actually incurred by the Mortgagee, to the extent required under the Credit Agreement.
2.5 Insurance .
(a) Types Required . The Mortgagor shall maintain insurance for the Premises as set forth in Sections 7.5(a)(ii) through (iv)  and 7.5(b)(i) of the Credit Agreement to the extent applicable.
(b) Insurance Generally . The Mortgagor agrees to comply with Section 7.5(b)(ii) of the Credit Agreement, in accordance with and to the extent provided therein.
(b) Use of Proceeds . Insurance proceeds shall be applied or disbursed as set forth in Section 7.5(a) of the Credit Agreement to the extent applicable.
 
4

2.6 Eminent Domain . All proceeds or awards relating to condemnation or other taking of the Premises pursuant to the power of eminent domain shall be applied pursuant to Section 7.5(a) of the Credit Agreement to the extent applicable.
2.7 Releases and Waivers . The Mortgagor agrees that no release by the Mortgagee of any portion of the Premises, the Rents and Profits or the Leases, no subordination of lien, no forbearance on the part of the Mortgagee to collect on any Loan, or any part thereof, no waiver of any right granted or remedy available to the Mortgagee and no action taken or not taken by the Mortgagee shall, except to the extent expressly released, in any way have the effect of releasing the Mortgagor from full responsibility to the Mortgagee for the complete discharge of each and every of the Mortgagor’s obligations hereunder.
2.8 Inspection . The Mortgagor agrees to comply with Section 7.6 of the Credit Agreement, in accordance with and to the extent provided therein.
2.9 Security Agreement . 5
(a) This Mortgage is hereby made and declared to be a security agreement encumbering the Fixtures, and Mortgagor grants to the Mortgagee a security interest in the Fixtures. The Mortgagor grants to the Mortgagee all of the rights and remedies of a secured party under the laws of the state in which the Premises are located. A financing statement or statements reciting this Mortgage to be a security agreement with respect to the Fixtures may be appropriately filed by the Mortgagee.
(b) The Mortgagor warrants that, as of the date hereof, the name and address of the “Debtor” (which is the Mortgagor) are as set forth in the preamble of this Mortgage and a statement indicating the types, or describing the items, of collateral is set forth hereinabove. Mortgagor warrants that Mortgagor’s exact legal name is correctly set forth in the preamble of this Mortgage.
(c) This Mortgage will be filed in the real property records.
(d) The Mortgagor is a [                    ] organized under the laws of the State of [                    ] [and the Mortgagor’s organizational identification number is                     ] 6 .
ARTICLE III
Events of Default
An Event of Default shall exist and be continuing under the terms of this Mortgage upon the existence and during the continuance of an Event of Default under the terms of the Credit Agreement.

5  	Local counsel to advise if additional language required for Mortgage to act as Fixture Filing.	
6  	Local counsel to advise if an organizational identification number is required.	
 
5

ARTICLE IV
Foreclosure
4.1 Acceleration of Secured Obligations; Foreclosure . Upon the occurrence and during the continuance of an Event of Default, the entire balance of the Loans and any other obligations due under the Loan Documents, including all accrued interest, shall become due and payable to the extent such amounts become due and payable under the Credit Agreement. Provided an Event of Default has occurred and is continuing, upon failure to pay the Loans or reimburse any other amounts due under the Loan Documents in full at any stated or accelerated maturity and in addition to all other remedies available to the Mortgagee at law or in equity, the Mortgagee may foreclose the lien of this Mortgage by judicial or non-judicial proceeding in a manner permitted by applicable law. The Mortgagor hereby waives, to the fullest extent permitted by law, any statutory right of redemption in connection with such foreclosure proceeding.
4.2 Proceeds of Sale . The proceeds of any foreclosure sale of the Premises, or any part thereof, will be distributed and applied in accordance with the terms and conditions of the Credit Agreement and any applicable Intercreditor Agreement (subject to any applicable provisions of applicable law).
ARTICLE V
Additional Rights and Remedies of the Mortgagee
5.1 Rights Upon an Event of Default . Upon the occurrence and during the continuance of an Event of Default, the Mortgagee, immediately and without additional notice and without liability therefor to the Mortgagor, except for gross negligence, willful misconduct, bad faith or unlawful conduct, may do or cause to be done any or all of the following to the extent permitted by applicable law, and subject to the terms of any applicable Intercreditor Agreement: (a) enter the Premises and take exclusive possession thereof; (b) invoke any legal remedies to dispossess the Mortgagor if the Mortgagor remains in possession of the Premises without the Mortgagee’s prior written consent; (c) hold, lease, develop, manage, operate or otherwise use the Premises upon such terms and conditions as the Mortgagee may deem reasonable under the circumstances (making such repairs, alterations, additions and improvements and taking other actions, from time to time, as the Mortgagee deems reasonably necessary or desirable), and apply all Rents and Profits collected by the Mortgagee in connection therewith in accordance with the provisions hereof; (d) institute proceedings for the complete foreclosure of the Mortgage, either by judicial action or by power of sale, in which case the Premises may be sold for cash or credit in one or more parcels; and (e) exercise all other rights, remedies and recourses granted under the Credit Agreement or otherwise available at law or in equity. At any foreclosure sale by virtue of any judicial proceedings, power of sale, or any other legal right, remedy or recourse, the title to and right of possession of any such property shall pass to the purchaser thereof, and to the fullest extent permitted by law, the Mortgagor shall be completely and irrevocably divested of all of its right, title, interest, claim, equity, equity of redemption, and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against the Mortgagor, and against all other Persons claiming or to claim the property sold or any part thereof, by, through or under the Mortgagor. The Mortgagee or any of the Secured Parties may be a purchaser at such sale and if Mortgagee is the highest bidder, Mortgagee shall credit the portion of the purchase price that would be distributed to Mortgagee against the indebtedness in lieu of paying cash. In the event this Mortgage is foreclosed by judicial action, appraisement of the Premises is waived to the extent permitted by applicable law. With respect to any notices required or permitted under the UCC to the extent applicable, the Mortgagor agrees that 10 days’ prior written notice shall be deemed commercially reasonable.
 
6

5.2 Appointment of Receiver . Upon the occurrence and during the continuance of an Event of Default, subject to the terms of any applicable Intercreditor Agreement, the Mortgagee shall be entitled, without additional notice and without regard to the adequacy of any security for the Obligations secured hereby, whether the same shall then be occupied as a homestead or not, or the solvency of any party bound for its payment, to make application for the appointment of a receiver to take possession of and to operate the Premises, and to collect the rents, issues, profits, and income thereof, all expenses of which shall be added to the Obligations and secured hereby. The receiver shall have all the rights and powers provided for under the laws of the state in which the Premises are located, including without limitation, the power to execute leases, and the power to collect the rents, sales proceeds, issues, profits and proceeds of the Premises during the pendency of such foreclosure suit, as well as during any further times when the Mortgagor, its successors or assigns, except for the intervention of such receiver, would be entitled to collect such rents, sales proceeds, issues, proceeds and profits, and all other powers which may be necessary or are usual in such cases for the protection, possession, control, management and operation of the Premises during the whole of said period. Receiver’s fees, reasonable attorneys’ fees and costs incurred in connection with the appointment of a receiver pursuant to this Section 5.2 shall be secured by this Mortgage. Notwithstanding the appointment of any receiver, trustee or other custodian, subject to any applicable Intercreditor Agreement, the Mortgagee shall be entitled to retain possession and control of any cash or other instruments at the time held by or payable or deliverable under the terms of the Mortgage to the Mortgagee to the fullest extent permitted by law.
5.3 Waivers . No waiver of a prior Event of Default shall operate to waive any subsequent Event(s) of Default. All remedies provided in this Mortgage, the Notes, the Credit Agreement or any of the other Loan Documents are cumulative and may, at the election of the Mortgagee, be exercised alternatively, successively, or in any manner and are in addition to any other rights provided by law.
5.4 Delivery of Possession After Foreclosure . In the event there is a foreclosure sale hereunder and at the time of such sale, the Mortgagor or the Mortgagor’s successors or assigns are occupying or using the Premises, or any part thereof, each and all immediately shall become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of either landlord or tenant, at a reasonable rental per day based upon the value of the property occupied, such rental to be due daily to the purchaser; and to the extent permitted by applicable law, the purchaser at such sale, notwithstanding any language herein apparently to the contrary, shall have the sole option to demand possession immediately following the sale or to permit the occupants to remain as tenants at will. In the event the tenant fails to surrender possession of said property upon demand, the purchaser shall be entitled to institute and maintain a summary action for possession of the property (such as an action for forcible detainer) in any court having jurisdiction.
5.5 Marshalling . The Mortgagor hereby waives, in the event of foreclosure of this Mortgage or the enforcement by the Mortgagee of any other rights and remedies hereunder, any right otherwise available in respect to marshalling of assets which secure any Loan and any other indebtedness secured hereby or to require the Mortgagee to pursue its remedies against any other such assets.
5.6 Protection of Premises . Upon the occurrence and during the continuance of an Event of Default, the Mortgagee may take such actions, including, but not limited to disbursements of such sums, as the Mortgagee in its sole but reasonable discretion deems necessary to protect the Mortgagee’s interest in the Premises.
 
7

ARTICLE VI
General Conditions
6.1 Terms . The singular used herein shall be deemed to include the plural; the masculine deemed to include the feminine and neuter; and the named parties deemed to include their successors and assigns to the extent permitted under the Credit Agreement. The term “Mortgagee” shall include the ABL Collateral Agent on the date hereof and any successor ABL Collateral Agent under the Credit Agreement. The word “person” shall include any individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature, and the word “Premises” shall include any portion of the Premises or interest therein. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase without limitation.
6.2 Notices . All notices, requests and other communications shall be given in accordance with Section 11.2 of the Credit Agreement.
6.3 Severability . If any provision of this Mortgage is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.
6.4 Headings . The captions and headings herein are inserted only as a matter of convenience and for reference and in no way define, limit, or describe the scope of this Mortgage nor the intent of any provision hereof.
6.5 [ Intercreditor Agreements .
Notwithstanding anything to the contrary contained herein, the lien and security interest granted to the Mortgagee pursuant to this Mortgage and the exercise of any right or remedy by the Mortgagee hereunder are subject to the provisions of any applicable Intercreditor Agreement. The Mortgagee acknowledges and agrees that the relative priority of the Liens granted to the Mortgagee shall be determined solely pursuant to any applicable Intercreditor Agreement, and not by priority as a matter of law or otherwise.
6.6 Conflicting Terms .
(a) In the event of any conflict between the terms of this Mortgage and any applicable Intercreditor Agreement, the terms of such Intercreditor Agreement shall govern and control any conflict between the Mortgagee and any other party to such Intercreditor Agreement, other than with respect to Section 6.7. In the event of any such conflict, the Mortgagor may act (or omit to act) in accordance with such Intercreditor Agreement, and shall not be in breach, violation or default of its obligations hereunder by reason of doing so.
(b) In the event of any conflict between the terms and provisions of the Credit Agreement and the terms and provisions of this Mortgage, the terms and provisions of the Credit Agreement shall control and supersede the provisions of this Mortgage with respect to such conflicts other than with respect to Section 6.7.
6.7 Governing Law . This Mortgage shall be governed by and construed in accordance with the internal law of the state in which the Premises are located.
6.8 Application of the Foreclosure Law . If any provision in this Mortgage shall be inconsistent with any provision of the foreclosure laws of the state in which the Premises are located, the provisions of such laws shall take precedence over the provisions of this Mortgage, but shall not invalidate or render unenforceable any other provision of this Mortgage that can be construed in a manner consistent with such laws.
 
8

6.9 Written Agreement . This Mortgage may not be amended, supplemented or otherwise modified except in accordance with Section 11.1 of the Credit Agreement. For the avoidance of doubt, it is understood and agreed that any amendment, waiver, supplement or other modification of or to any applicable Intercreditor Agreement that would have the effect, directly or indirectly, through any reference herein to such Intercreditor Agreement or otherwise, of waiving, amending, supplementing or otherwise modifying this Mortgage, or any term or provision hereof, or any right or obligation of the Mortgagor hereunder or in respect hereof, shall not be given such effect except pursuant to a written instrument executed by the Mortgagor and the Mortgagee in accordance with this Section 6.9.
6.10 Waiver of Jury Trial . Section 11.15 of the Credit Agreement is hereby incorporated by reference.
6.11 Request for Notice . The Mortgagor requests that a copy of any statutory notice of default and a copy of any statutory notice of sale hereunder be mailed to the Mortgagor in accordance with Section 6.2 of this Mortgage.
6.12 Counterparts . This Mortgage may be executed by one or more of the parties on any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
6.13 Release . If any of the Premises shall be sold, transferred or otherwise disposed of by the Mortgagor in a transaction permitted by the Credit Agreement, then the Mortgagee, at the request of the Mortgagor, shall execute and deliver to the Mortgagor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on the Premises. The Mortgagor shall deliver to the Mortgagee prior to the date of the proposed release, a written request for release.
6.14 Easements . At any time, or from time to time, without liability therefor and with ten (10) days’ prior written notice to the Mortgagee, upon written request of the Mortgagor and without affecting the effect of this Mortgage upon the remainder of the Premises, the Mortgagee shall join in granting any easement, right of way, encumbrance or lien on all or any portion of the Premises, so long as the Mortgagor certifies to the Mortgagee by delivering an officer’s certificate in form and substance reasonably acceptable to the Mortgagee that such easement, right of way, encumbrance or lien is a Permitted Lien.
6.15 [ Last Dollars Secured; Priority . This Mortgage secures only a portion of the Obligations owing or which may become owing by the Mortgagor to the Secured Parties. The parties agree that any payments or repayments of the Obligations shall be and be deemed to be applied first to the portion of the Obligations that is not secured hereby, it being the parties’ intent that the portion of the Obligations last remaining unpaid shall be secured hereby. If at any time this Mortgage shall secure less than all of the principal amount of the Obligations, it is expressly agreed that any repayments of the principal amount of the Obligations shall not reduce the amount of the lien of this Mortgage until the lien amount shall equal the principal amount of the Obligations outstanding.] 7

7  	To be included in mortgages for states with a mortgage recording tax, to the extent required.	
 
9

6.16 State Specific Provisions . In the event of any inconsistencies between this Section 6.16 and any of the other terms and provisions of this Mortgage, the terms and provisions of this Section 6.16 shall control and be binding.
(a) [                    ] 8
(b) [                    ] 9
(c) [                    ]
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

8  	Regarding real property located in any Province or Territory of Canada, other than Quebec: The form of Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing may be utilized subject to modification for the following: (i) real property registration requirements and forms applicable in the jurisdiction where the real property is located (in some jurisdictions, such as the Province of Ontario, there would have to be separate filings for personal property security agreement and fixture filings); and (ii) to comply with custom, legislation or regulations applicable in the jurisdiction where the real property is located.	
9  	Regarding real property located in the Province of Quebec: A charge granted in real property in Quebec will be subject to a movable and immovable hypothec, executed and registered in the Province of Quebec. This form of Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing is not applicable in the Province of Quebec and Quebec-specific forms will be required.	
 
10

IN WITNESS WHEREOF, the Mortgagor has executed this Mortgage as of the above written date.

MORTGAGOR :	 		
		
[                                         ]	 		

By:	 	 	
	 	Name:	 	 	
	 	Title:	 	 	
[ADD STATE NOTARY FORM FOR THE MORTGAGOR] 10

10	Local counsel to confirm signature page and notary block which is acceptable for recording in the jurisdiction.	

Exhibit A
Legal Description
(See Attached)

EXHIBIT H TO
ABL CREDIT AGREEMENT
FORM OF SWING LINE LOAN PARTICIPATION CERTIFICATE
        , 20    

[Name of Lender]	 		

Ladies and Gentlemen:
Pursuant to subsection 2.4(d) of the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto, the undersigned hereby acknowledges receipt from you on the date hereof of                      DOLLARS ($        ) as payment for a participating interest in the following Swing Line Loan:

Date of Swing Line Loan:	  	 	

Principal Amount of Swing Line Loan:	  	 	

Very truly yours,	
	
BANK OF AMERICA, N.A., as Swing Line Lender	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
H-1

EXHIBIT I-1 TO
ABL CREDIT AGREEMENT
FORM OF REVOLVING NOTE
THIS REVOLVING NOTE AND THE OBLIGATIONS EVIDENCED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE ABL CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS REVOLVING NOTE AND THE OBLIGATIONS EVIDENCED HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH ABL CREDIT AGREEMENT.

$        	  	New York, New York	
	  	[            ], 20[    ] 1	
FOR VALUE RECEIVED, the undersigned, [xpedx Intermediate, LLC, a Delaware limited liability company (the “ Parent Borrower ”)][xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”)] [Subsidiary Borrower] 2 [Unisource Canada, Inc., a Canadian corporation (the “ Canadian Borrower ”)] 3 , hereby unconditionally promises to pay to             (the “ Lender ”) and its registered successors and assigns, at the office of Bank of America, N.A., in lawful money of [the United States of America] 4 [Canada] 5 and in immediately available funds, the principal amount of the lesser of (a) [ — ] DOLLARS ($        ) and (b) the aggregate unpaid principal amount of the Revolving Credit Loans made by the Lender to the [U.S. Borrowers] [Canadian Borrower] pursuant to subsection 2.1 of the ABL Credit Agreement referred to below, which sum shall be payable on the Maturity Date.
The [applicable Borrower] further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time at the applicable rates per annum and on the dates set forth in subsection 4.1 of the ABL Credit Agreement until such principal amount is paid in full (both before and after judgment).
This Revolving Note is one of the Revolving Notes referred to in, and is subject in all respects to, the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an

1  	Each Revolving Note shall be dated the Closing Date (or, in the case of an assignment pursuant to subsection 11.6(b), as of the date of such assignment).	
2  	Select for promissory notes evidencing loans made to the US Borrowers under either the U.S. or Canadian Facility.	
3  	Select for promissory notes evidencing loans made to the Canadian Borrower under the Canadian Facility.	
4  	Select for promissory notes evidencing loans made to the US Borrowers under either the U.S. or Canadian Facility.	
5  	Select for promissory notes evidencing loans made to the Canadian Borrower under the Canadian Facility	
 
I-1-1

Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto, is secured and guaranteed as provided therein and under the other Loan Documents and is subject to optional and mandatory prepayment in whole or in part as provided therein. Reference is hereby made to the Loan Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Revolving Note in respect thereof. Each holder hereof, by its acceptance of this Revolving Note, agrees to the terms of, and to be bound by and to observe the provisions applicable to the Lenders contained in, the ABL Credit Agreement. Terms used herein which are defined in the ABL Credit Agreement shall have such defined meanings unless otherwise defined herein or unless the context otherwise requires.
Upon the occurrence of any one or more of the Events of Default specified in the ABL Credit Agreement, all amounts then remaining unpaid on this Revolving Note shall become, or may be declared to be, immediately due and payable, all as provided therein.
All parties now and hereafter liable with respect to this Revolving Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive, to the maximum extent permitted by applicable law, presentment, demand, protest and all other notices of any kind under this Revolving Note.
THIS REVOLVING NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[XPEDX INTERMEDIATE, LLC],
as Parent Borrower	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[XPEDX, LLC],
as OpCo Borrower	
 
I-1-2

			
By:	 	 	
	 	Name:	
	 	Title:	
	
[SUBSIDIARY BORROWER],	
as a U.S. Borrower	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[UNISOURCE CANADA, INC.],
as Canadian Borrower	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
I-1-3

EXHIBIT I-2 TO
ABL CREDIT AGREEMENT
FORM OF SWING LINE NOTE

$        	  	New York, New York	
	  	[            ], 20[    ] 1	
FOR VALUE RECEIVED, the undersigned, [xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement (as defined below), the “ Parent Borrower ”)] [xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”)] [Subsidiary Borrower] hereby unconditionally promises to pay to Bank of America, N.A. (the “ Swing Line Lender ”) and its registered successors and assigns, at the office of Bank of America, N.A., in lawful money of the United States of America and in immediately available funds, the principal amount of the lesser of (a) DOLLARS ($        ) and (b) the aggregate unpaid principal amount of the Swing Line Loans made by the Lender to the U.S. Borrowers pursuant to subsection 2.4 of the ABL Credit Agreement referred to below, which sum shall be payable on the Maturity Date.
The [applicable Borrower] further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time at the applicable rates per annum and on the dates set forth in subsection 4.1 of the ABL Credit Agreement until paid in full (both before and after judgment).
This Swing Line Note is the Swing Line Note referred to in, and is subject in all respects to, the ABL Credit Agreement, dated as of [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among [xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement (as defined below), the “ Parent Borrower ”)] [xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”)], Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto, and is entitled to the benefits thereof, is secured and guaranteed as provided therein and in the Loan Documents and is subject to optional and mandatory prepayment in whole or in part as provided therein. Reference is hereby made to the Loan Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Swing Line Note in respect thereof. The holder hereof, by its acceptance of this Swing Line Note, agrees to the terms of, and to be bound by and to observe the provisions applicable to the Lenders contained in, the ABL Credit Agreement. Terms used herein which are defined in the ABL Credit Agreement shall have such defined meanings unless otherwise defined herein or unless the context otherwise requires.

1  	Each Swing Line Note should be dated the Closing Date.	
 
I-2-1

Upon the occurrence of any one or more of the Events of Default specified in the ABL Credit Agreement, all amounts remaining unpaid on this Swing Line Note shall become, or may be declared to be, immediately due and payable all as provided therein.
All parties now and hereafter liable with respect to this Swing Line Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive, to the maximum extent permitted by applicable law, presentment, demand, protest and all other notices of any kind under this Swing Line Note.
THIS SWING LINE NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[XPEDX INTERMEDIATE, LLC],
as Parent Borrower	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[XPEDX, LLC],
as OpCo Borrower	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[SUBSIDIARY BORROWER],
as a U.S. Borrower	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
I-2-2

EXHIBIT J TO
ABL CREDIT AGREEMENT
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
Reference is made to the Loan(s) held by the undersigned pursuant to the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto. The undersigned hereby certifies under penalty of perjury that:
 
 	1.	If (x) the undersigned is not an intermediary or flow-through entity, then the undersigned is the sole record owner and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate or (y) the undersigned is an intermediary or flow-through entity, then it is the sole record owner and its direct or indirect beneficiaries, partners or members in respect of which it is providing this certificate are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s));	
 
 	2.	Income from the Loan(s) (as well as any Note(s) evidencing such Loan(s)) is not effectively connected with the conduct of a trade or business within the United States of the undersigned (and, if the undersigned is an intermediary or flow-through entity, of its direct or indirect beneficiaries, partners or members in respect of which it is providing this certificate);	
 
 	3.	The undersigned is not (and, if the undersigned is an intermediary or flow-through entity, none of its direct or indirect beneficiaries, partners or members in respect of which it is providing this certificate is) a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “ Code ”);	
 
 	4.	The undersigned is not (or, if the undersigned is an intermediary or flow-through entity, none of its direct or indirect beneficiaries, partners or members in respect of which it is providing this certificate is) a 10-percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code; and	
 
J-1

 	5.	The undersigned is not (or, if the undersigned is an intermediary or flow-through entity, none of its direct or indirect beneficiaries, partners or members in respect of which it is providing this certificate is) a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code.	
The undersigned has furnished you with a certificate of its non-U.S. person status on the applicable Internal Revenue Service Form W-8. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall so inform the Borrower Representative and the Administrative Agent in writing within thirty (30) days of such change and (2) the undersigned shall furnish the Borrower Representative and the Administrative Agent, a properly completed and currently effective certificate in either the calendar year in which payment is to be made to the undersigned, or in either of the two calendar years preceding such payment.
 
J-2

Unless otherwise defined herein, terms defined in the ABL Credit Agreement and used herein shall have the meanings given to them in the ABL Credit Agreement.

[NAME OF LENDER]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[Address]	
Dated:             , 20[    ]
 
J-3

EXHIBIT K TO
ABL CREDIT AGREEMENT
FORM OF SOLVENCY CERTIFICATE
OF
XPEDX INTERMEDIATE, LLC
July [ — ], 2014
To the Administrative Agent and each of the Lenders party to the ABL Credit Agreement referred to below:
I, the undersigned, the Chief Financial Officer of xpedx Intermediate, LLC, a Delaware limited liability company (the “ Parent Borrower ”), in that capacity only and not in my individual capacity (and without personal liability), do hereby certify as of the date hereof, and based upon (i) facts and circumstances as they exist as of the date hereof (and disclaiming any responsibility for changes in such fact and circumstances after the date hereof) and (ii) such materials and information as I have deemed relevant to the determination of the matters set forth in this certificate, that:
1. This certificate is furnished to the Administrative Agent and the Lenders pursuant to Section 6.1(k) of the ABL Credit Agreement, dated as of July     , 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto. Unless otherwise defined herein, capitalized terms used in this certificate shall have the meanings set forth in the ABL Credit Agreement.
2. For purposes of this certificate, the terms below shall have the following definitions:
(a) “Fair Value”
The amount at which the assets (both tangible and intangible), in their entirety, of the Parent Borrower and its Subsidiaries taken as a whole would change hands between a

willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act.
(b) “Present Fair Salable Value”
The amount that could be obtained by an independent willing seller from an independent willing buyer if the assets of the Parent Borrower and its Subsidiaries taken as a whole are sold with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises insofar as such conditions can be reasonably evaluated.
(c) “Stated Liabilities”
The recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of the Parent Borrower and its Subsidiaries taken as a whole, as of the date hereof after giving effect to the consummation of the Transactions, determined in accordance with GAAP consistently applied.
(d) “Identified Contingent Liabilities”
The maximum estimated amount of liabilities reasonably likely to result from pending litigation, asserted claims and assessments, guaranties, uninsured risks and other contingent liabilities of the Parent Borrower and its Subsidiaries taken as a whole after giving effect to the Transactions (including all fees and expenses related thereto but exclusive of such contingent liabilities to the extent reflected in Stated Liabilities), as identified and explained in terms of their nature and estimated magnitude by responsible officers of the Parent Borrower.
(e) “Will be able to pay their Liabilities as they mature”
For the period from the date hereof through the Maturity Date, the Parent Borrower and its Subsidiaries taken as a whole will have sufficient assets and cash flow to pay their respective Stated Liabilities and Identified Contingent Liabilities as those liabilities mature or (in the case of contingent liabilities) otherwise become payable.
(f) “Do not have Unreasonably Small Capital”
For the period from the date hereof through the Maturity Date, the Parent Borrower and its Subsidiaries taken as a whole after consummation of the Transactions is a going concern and has sufficient capital to ensure that it will continue to be a going concern for such period.

3. For purposes of this certificate, I, or officers of the Parent Borrower under my direction and supervision, have performed the following procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements (including the pro forma financial statements) referred to in Section 6.1(m) of the ABL Credit Agreement.
(b) I have knowledge of and have reviewed to my satisfaction the ABL Credit Agreement.
(c) As chief financial officer of the Parent Borrower, I am familiar with the financial condition of the Parent Borrower and its Subsidiaries.
4. Based on and subject to the foregoing, I hereby certify on behalf of the Parent Borrower that after giving effect to the consummation of the Transactions, it is my opinion that (i) the Fair Value and Present Fair Salable Value of the assets of the Parent Borrower and its Subsidiaries taken as a whole exceed their Stated Liabilities and Identified Contingent Liabilities; (ii) the Parent Borrower and its Subsidiaries taken as a whole do not have Unreasonably Small Capital; and (iii) the Parent Borrower and its Subsidiaries taken as a whole will be able to pay their Liabilities as they mature.

IN WITNESS WHEREOF, the Parent Borrower has caused this certificate to be executed on its behalf by its Chief Financial Officer as of the date first written above.

XPEDX INTERMEDIATE, LLC	
		
By:	 	 	
Name:	 	 	
Title:	 	Chief Financial Officer	

EXHIBIT L TO
ABL CREDIT AGREEMENT
FORM OF OFFICER’S CERTIFICATE
XPEDX INTERMEDIATE, LLC
Date: July [ — ], 2014
Pursuant to subsection 6.1(e) of the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto, the Parent Borrower hereby certifies that:
 
 	1.	The representations and warranties made by the Parent Borrower pursuant to Section 5 of the ABL Credit Agreement or any other Loan Documents to which it is a party are true and correct in all material respects on and as of the date hereof as if made on the date hereof, before and after giving effect to the Loans and to the application of the proceeds therefrom, except to the extent that they relate to a particular date or period in which case they shall be true and correct in all material respects as of the respective date or the respective period, as the case may be; and	
 
 	2.	No Default or Event of Default under the ABL Credit Agreement has occurred and is continuing as of the date hereof after giving effect to the Loans to be made on the date hereof.	
 
L-1

IN WITNESS WHEREOF, the undersigned has hereunto set his or her name as of the date first set forth above.

XPEDX INTERMEDIATE, LLC	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
L-2

EXHIBIT M TO
ABL CREDIT AGREEMENT
FORM OF SECRETARY’S CERTIFICATE
OF
THE ENTITIES LISTED ON SCHEDULE I HERETO
July [ — ], 2014
Pursuant to subsection 6.1(i) of the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto,
I, the duly elected and acting Secretary of each entity listed in Schedule 1 attached hereto (each a “ Certifying Party ”), hereby certify in such capacity on behalf of each Certifying Party and not in my individual capacity, as follows:
1. Attached hereto as Annex 1 is a complete and correct copy of resolutions adopted by the board of directors, members, managing member or other organizing body of each Certifying Party on July [ — ], 2014; such resolutions have not been amended, supplemented, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof and are now in full force and effect and are the only proceedings of such board of directors, members, managing member or other organizing body now in force relating to or affecting the matters referred to therein.
2. Attached hereto as Annex 2 is a complete and correct copy of the By-Laws, Limited Liability Company Agreement or other Operating Agreement (the “ Operating Documents ”) of each Certifying Party as in effect on the date the resolutions referred to in Paragraph 1 above were adopted through and including the date hereof.
3. Attached hereto as Annex 3 is a complete and correct copy of the Certificate of Incorporation or the equivalent charter document ( the “ Charter Document ”) of each Certifying Party as in effect on the date hereof.
 
M-1

4. Attached hereto as Annex 4 is a list of the persons who are as of the date hereof duly elected and qualified officers of each Certifying Party holding the offices indicated next to their respective names, and the signatures appearing opposite their respective names are the true and genuine signatures of such officers or true facsimiles thereof, and each of such officers is duly authorized to execute and deliver on behalf of the Certifying Party each of the Loan Documents (as defined in the ABL Credit Agreement) to which it is a party and any certificate or other document to be delivered by the Corporation pursuant to the Loan Documents (as defined in the ABL Credit Agreement) to which it is a party.
5. A duly executed copy of each of the Loan Documents (as defined in the ABL Credit Agreement) to which each Certifying Party is a party has been duly delivered by such Certifying Party to each of the other parties thereto.
Each of Debevoise & Plimpton LLP, Richards, Layton & Finger, P.A., McMillan LLP and Kirkland & Ellis LLP is entitled to rely on this certificate in connection with the opinions that it is rendering pursuant to subsection 6.1(d) of the ABL Credit Agreement.
[Remainder of Page Intentionally Left Blank]
 
M-2

IN WITNESS WHEREOF, each Certifying Party has caused this certificate to be executed on its behalf by its Secretary, as of the date first set forth above.

By:	 	 	
	 	Name:	
	 	Title:	
I, [                    ], am the duly elected and acting [                    ] of each Certifying Party, and do hereby certify in such capacity on behalf of each Certifying Party and not in my individual capacity that [                    ] is the duly elected, qualified and acting Secretary of each Certifying Party and that the signature appearing above is his or her genuine signature.
IN WITNESS WHEREOF, each Certifying Party has caused this certificate to be executed on its behalf as of the date first set forth above.

By:	 	 	
	 	Name:	
	 	Title:	
[Signature Page - Omnibus Secretary’s Certificate]

SCHEDULE 1
Certifying Parties
 
M-1-1

ANNEX 1
Resolutions
 
M-Annex 1-1

ANNEX 2
Operating Documents
 
M-Annex 2-1

ANNEX 3
Charter Documents
 
M-Annex 3-1

ANNEX 4
Incumbency

Name	  	Office	 	Signature	
			
[                    ]	  	Secretary	 	 	
			
[                    ]	  	[                    ]	 	 	
 
M-Annex 4-1

EXHIBIT N TO
ABL CREDIT AGREEMENT
FORM OF BORROWING BASE CERTIFICATE
XPEDX INTERMEDIATE, LLC
PERIOD ENDED [                    ]
As of the last Business Day of the fiscal period ending [                    ] (the “Determination Date”), I, [                    ], the [                    ] of xpedx Intermediate, LLC, a Delaware limited liability company (the “ Parent Borrower ”), hereby certify to the Administrative Agent in my representative capacity on behalf of the Parent Borrower and the other Loan Parties and not in my individual capacity that, to the best of my knowledge and belief, with respect to the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto; capitalized terms that are not defined herein have the meanings ascribed to such terms in the ABL Credit Agreement:
with reference to this Borrowing Base Certificate, the Parent Borrower hereby certifies that the statements and calculations of the Borrowing Base set forth on Annex A hereto (and the schedules attached thereto) are true and correct as of the Determination Date and that such calculations have been made in accordance with the requirements of the ABL Credit Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Borrowing Base Certificate to be executed on its behalf as of the date first set forth above.

XPEDX INTERMEDIATE, LLC	
		
By:	 	 	
	 	Name:	
	 	Title:	

EXHIBIT O TO
ABL CREDIT AGREEMENT
FORM OF LENDER JOINDER AGREEMENT
THIS LENDER JOINDER AGREEMENT, dated as of [             ,         ] (this “ Agreement ”), by and among [Additional Lenders] (each an “ Additional Lender ” and collectively the “ Additional Lenders ”), the Parent Borrower (as defined below), the OpCo Borrower (as defined below) and the Subsidiary Borrowers from time to time party hereto (as further defined in subsection 1.1 of the Credit Agreement, and, together with the Parent Borrower, the OpCo Borrower, and [the Canadian Borrower], being collectively referred to therein as the “ Borrowers ” and each being individually referred to as a “ Borrower ”) and the Agent (as defined below).
R E C I T A L S :
WHEREAS, the Borrowers and the Agent are parties to the ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC, a Delaware limited liability company (as further defined in subsection 1.1 of the ABL Credit Agreement, the “ Parent Borrower ”), xpedx, LLC, a New York limited liability company (the “ OpCo Borrower ”), Unisource Canada, Inc., an Ontario amalgamated corporation (the “ Canadian Borrower ”) and each Subsidiary Borrower of the Parent Borrower from time to time party thereto, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), Bank of America, N.A., as administrative agent (the “ Agent ”) and collateral agent for the Lenders, Bank of America, N.A., as a U.S. facility issuing lender and Bank of America, N.A. (acting through its Canada branch), as a Canadian facility issuing lender, and the other parties thereto; capitalized terms used herein have the meanings assigned to such terms in the ABL Credit Agreement; and
WHEREAS, subject to the terms and conditions of the ABL Credit Agreement, the Borrowers may request [Incremental Revolving Commitments] [New Revolving Commitments] [Incremental ABL Term Loans] by entering into one or more Lender Joinder Agreements with the Additional Lenders.
NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:
Each Additional Lender party hereto hereby agrees to commit to provide its respective [Incremental Revolving Commitments] [New Revolving Commitments] [Incremental ABL Term Loans] as set forth on Schedule A annexed hereto, on the terms and subject to the conditions set forth below:
Each Additional Lender (i) confirms that it has received a copy of the ABL Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (ii) agrees that it will,
 
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independently and without reliance upon the Agent, or any other Lender or Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the ABL Credit Agreement; any other Loan Document or any other instrument or document furnished hereto or thereto; (iii) appoints and authorizes each applicable Agent to take such action as agent on its behalf and to exercise such powers under the ABL Credit Agreement and the other Loan Documents or any other document furnished hereto or thereto as are delegated to the Agent, as the case may be, by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of any applicable Intercreditor Agreement are required to be performed by it as a Lender; (v) represents and warrants that it has full power and authority, and has taken all actions necessary, to execute and deliver this Agreement and to consummate the transactions contemplated hereby, (vi) specifies as its address for notices the offices set forth beneath its name on the signature pages hereof and if applicable pursuant to subsection 4.11 of the ABL Credit Agreement, attaches two properly completed Forms W-9, W-8EXP, W-8BEN, W-8ECI, W-8IMY (or successor form) and other certificate, statement or documentation prescribed by U.S. Treasury Regulations or other guidance issued by the Internal Revenue Service of the United States, certifying that such Additional Lender is entitled to receive all payments under the ABL Credit Agreement and the Notes payable to it without deduction or withholding of any United States federal income taxes and (vii) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the ABL Credit Agreement are required to be performed by it as a Lender.
Each Additional Lender hereby agrees to make its [Incremental Revolving Commitments] [New Revolving Commitments] [Incremental ABL Term Loans] on the following terms and conditions:
 
1.	Incremental Facility Closing Date . The date of effectiveness of [the Incremental Revolving Commitments] [the New Revolving Commitments] [the Incremental ABL Term Loans] shall be             , 20[    ] (the “ Incremental Facility Closing Date ”).	
 
2.	Additional Lenders . Each Additional Lender acknowledges and agrees that upon its execution of this Agreement such Additional Lender shall become a “Lender” under, and for all purposes of, the ABL Credit Agreement and the other Loan Documents, and shall be subject to and bound by the terms thereof, and shall perform all the obligations of and shall have all rights of a Lender thereunder.	
 
3.	ABL Credit Agreement Governs . Except as set forth in this Agreement and any related amendments to the Loan Documents, Incremental Facility Increases shall otherwise be subject to the provisions of the ABL Credit Agreement and the other Loan Documents.	
 
4.	Parent Borrower’s Certifications . By its execution of this Agreement, the Parent Borrower hereby certifies that (A) (other than with respect to an Incremental Facility Increase in connection with a Permitted Acquisition permitted hereunder or any other Investment not prohibited by the terms of the ABL Credit Agreement, unless required by the Lenders providing such Incremental Facility Increase) the representations and warranties made by the Parent Borrower and its Restricted Subsidiaries contained in the ABL Credit Agreement and in the other Loan Documents are true and correct in all	
 
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 	material respects except to the extent such representations and warranties relate to a specific earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date, and (B) no Specified Default has occurred and is continuing immediately prior to and after the effectiveness of [the Incremental Revolving Commitments] [the New Revolving Commitments] [the Incremental ABL Term Loans].	
 
5.	Notice . For purposes of the ABL Credit Agreement, the initial notice address of each Additional Lender shall be as set forth below its signature below.	
 
6.	Tax Forms and Other Agreements . Delivered herewith to the Parent Borrower and the Agent are such forms, certificates, statements, documentation or other evidence with respect to United States federal income tax withholding matters as such Additional Lender may be required to deliver to the Parent Borrower and the Agent pursuant to subsection 4.11 of the ABL Credit Agreement. The Additional Lender agrees to execute such other documents relating to the Facility (including any applicable Intercreditor Agreement, and a joinder to that certain Collateral Allocation Agreement, dated as of the Closing Date, among the Agent, the ABL Collateral Agent, the Swing Line Lender, each Issuing Lender and each Lender (as it may be amended, modified or supplemented from time to time) and/or similar agreements among Lenders) as the Agent may reasonably request.	
 
7.	Recordation of the New Loans . Upon execution and delivery hereof, the Agent will record the Loans and Commitments made under the Incremental Facility made by the Additional Lender in the Register.	
 
8.	Amendment, Modification and Waiver . This Agreement may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered on behalf of each of the parties hereto.	
 
9.	GOVERNING LAW . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.	
 
10.	Severability . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.	
 
11.	Counterparts . This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of such counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be delivered to the Parent Borrower and the Agent.	
 
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IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Lender Joinder Agreement as of the date first above written.

[NAME OF ADDITIONAL LENDER]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	 	Attention:	
	 	Telephone:	
	 	Facsimile:	
	
[UNISOURCE WORLDWIDE, INC.], as Parent Borrower	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[SUBSIDIARY BORROWERS]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
BANK OF AMERICA, N.A., as Administrative Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
O-4

SCHEDULE A
to
JOINDER AGREEMENT
 
Schedule A-1

EXHIBIT P TO
ABL CREDIT AGREEMENT
FORM OF COLLATERAL ACCESS AGREEMENT
To: The Agent (as defined in Annex I hereto)
[ LANDLORD ] (“ Landlord ”) has been informed that (a) [Loan Party] (“ Tenant ”) and/or various affiliates of Tenant (together, the “ Obligors ”) have entered into various loan documents involving Bank of America, N.A. in its capacity as agent (or any successor or assign, the “ Agent ”) (as amended, restated, replaced or refinanced, the “ Loan Documents ”), (b) the obligations of the Obligors under the Loan Documents are or will be secured by, among other things, security interests (“ Security Interests ”) in Tenant’s inventory and/or other property (“ Tenant’s Property ”) now or hereafter located in, on or about the real property located at [ ADDRESS ] (the “ Premises ”) which Tenant is leasing pursuant to that certain [Lease Agreement] dated as of [ DATE ] between Landlord and Tenant (together with all amendments, modifications and supplements thereto or renewals or replacements thereof, the “ Lease ”), and (c) Tenant is required, under the terms of the Loan Documents, to use commercially reasonable efforts to obtain the agreements of Landlord set forth herein.
NOW, THEREFORE , for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord hereby acknowledges and agrees as follows:
1. To the actual knowledge of Landlord, neither Tenant nor Landlord is in default under the terms of the Lease. If Landlord shall give Tenant a written notice of default under the Lease, Landlord shall at the same time send a copy of such notice to the Agent. Landlord shall allow the Agent the same rights to cure a default under the Lease as Tenant has under the terms of the Lease. Landlord shall also promptly notify the Agent upon any early termination of the Lease.
2. Landlord acknowledges that Tenant’s Property is and will remain personal property and not fixtures, even though Tenant’s Property may be affixed to or records of Tenant’s Property may be placed, on or about the Premises, and that any rights or interests Landlord may have in or to Tenant’s Property are hereby waived in favor of the Security Interests and any other rights and interests of the Agent (on behalf of the lenders under the Loan Documents) therein.
3. During the term of the Lease the Agent shall have the right to enter the Premises at reasonable times during regular business hours upon reasonable prior written notice to Landlord and to take possession of, sell or otherwise enforce its Security Interest and claims in Tenant’s Property pursuant to the terms of the Loan Documents. The Agent will comply with any security or escort requirements or other reasonable requirements imposed by Landlord.
4. For a period of up to 60 days after receipt by the Agent of a notice that the Landlord has obtained possession of the Premises following an uncured event of default under the Lease, the Agent shall have the right, but not the obligation, to cause Tenant’s Property to be removed from the Premises.
 
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5. The Agent agrees to promptly repair, at its expense, or reimburse Landlord for, any physical damage to the Premises caused by the conduct of any such removal of Tenant’s Property by or through the Agent pursuant to paragraph 3 or 4 above.
6. If any order or injunction is issued or stay granted which prohibits the Agent from exercising any of its rights hereunder, then, at the option of the Agent and upon notice to Landlord, the 60-day period set forth in paragraph 4 above shall be stayed during the period of such prohibition and shall continue thereafter for the number of days remaining in such 60-day period.
7. All notices to Landlord or to the Agent to be given under this Collateral Access Agreement shall be in writing (with a copy to the Tenant) and (a) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received, (b) sent by facsimile shall be deemed to have been given when sent or (c) delivered or furnished by electronic communications (including e-mail and Internet or intranet websites) shall be deemed to have been given when sent; provided that the Agent shall not be liable for any failure to provide to the Tenant copies of any notices.
8. The agreements contained herein shall supplement the terms of the Lease and shall continue in effect until Landlord shall have received the Agent’s written certification that this Collateral Access Agreement shall be terminated.
9. THIS COLLATERAL ACCESS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE [LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED].
10. This Collateral Access Agreement may be executed in any number of several counterparts. The agreements contained herein may not be modified except by an agreement in writing signed by Landlord, Agent and Tenant, or their respective successors in interest. The agreements contained herein shall inure to the benefit of and shall be binding upon the Agent and their successors and assigns and Landlord and its successors and assigns (including any transferees of the Premises).

[Landlord]	
Landlord	
		
By:	 	 	
		
Date:	 	 	
	
Landlord’s Address For Notices:	

Attn:	 	 	

Form of ITEC ABL Collateral Access Agreement	 		
			
	 	P-2	 		

			
Acknowledged and Agreed :	
	
BANK OF AMERICA, N.A., as Administrative Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	

Form of ITEC ABL Collateral Access Agreement	 		
			
	 	P-3	 		

ANNEX I

Notice Address	  	 	
		
Bank of America, N.A., as Agent
[    ]	  	Attention:
Telephone:
Email:
fax:	
 
Annex I-1

Exhibit 10.6

 
FORM OF
U.S. GUARANTEE AND COLLATERAL AGREEMENT
made by
XPEDX INTERMEDIATE, LLC,
(which on the effective date shall be merged with and into Unisource Worldwide, Inc.,
with Unisource Worldwide, Inc. surviving such merger),
VERITIV CORPORATION,
the Subsidiary Borrowers
and
the U.S. Guarantors,
in favor of
Bank of America, N.A.,
as Administrative Agent and as ABL Collateral Agent
Dated as of July [ — ], 2014

 

TABLE OF CONTENTS

 	 	 	  	Page	 	
			
SECTION 1	 	DEFINED TERMS	  	 	2	  	
    1.1	 	Definitions	  	 	2	  	
    1.2	 	Other Definitional Provisions	  	 	10	  	
			
SECTION 2	 	GUARANTEE	  	 	10	  	
    2.1	 	Guarantee	  	 	10	  	
    2.2	 	Right of Contribution	  	 	11	  	
    2.3	 	No Subrogation	  	 	11	  	
    2.4	 	Amendments, etc. with Respect to the Obligations	  	 	12	  	
    2.5	 	Guarantee Absolute and Unconditional	  	 	12	  	
    2.6	 	Reinstatement	  	 	14	  	
    2.7	 	Payments	  	 	14	  	
			
SECTION 3	 	GRANT OF SECURITY INTEREST	  	 	14	  	
    3.1	 	Grant	  	 	14	  	
    3.2	 	Pledged Collateral	  	 	15	  	
    3.3	 	Certain Limited Exceptions	  	 	15	  	
    3.4	 	Intercreditor Relations	  	 	18	  	
			
SECTION 4	 	REPRESENTATIONS AND WARRANTIES	  	 	18	  	
    4.1	 	Representations and Warranties of Each U.S. Guarantor	  	 	18	  	
    4.2	 	Representations and Warranties of Each U.S. Grantor	  	 	19	  	
    4.3	 	Representations and Warranties of Each U.S. Pledgor	  	 	22	  	
    4.4	 	Representations and Warranties of Each U.S. Granting Party	  	 	23	  	
			
SECTION 5	 	COVENANTS	  	 	23	  	
    5.1	 	Covenants of Each U.S. Guarantor	  	 	23	  	
    5.2	 	Covenants of Each U.S. Grantor	  	 	24	  	
    5.3	 	Covenants of Each U.S. Pledgor	  	 	28	  	
			
SECTION 6	 	REMEDIAL PROVISIONS	  	 	30	  	
    6.1	 	Certain Matters Relating to Accounts	  	 	30	  	
    6.2	 	Communications with Obligors; U.S. Grantors Remain Liable	  	 	31	  	
    6.3	 	Pledged Stock	  	 	32	  	
    6.4	 	Proceeds to Be Turned Over to the ABL Collateral Agent	  	 	33	  	
    6.5	 	Application of Proceeds	  	 	33	  	
    6.6	 	Code and Other Remedies	  	 	34	  	
    6.7	 	Registration Rights	  	 	35	  	
    6.8	 	Waiver; Deficiency	  	 	35	  	
			
SECTION 7	 	THE ABL COLLATERAL AGENT	  	 	36	  	
    7.1	 	ABL Collateral Agent’s Appointment as Attorney-in-Fact, etc	  	 	36	  	
    7.2	 	Duty of ABL Collateral Agent	  	 	37	  	
    7.3	 	Financing Statements	  	 	38	  	
    7.4	 	Authority of ABL Collateral Agent	  	 	38	  	
    7.5	 	Right of Inspection	  	 	38	  	
 
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SECTION 8	  	NON-LENDER SECURED PARTIES	  	 	39	  	
    8.1	  	Rights to Collateral	  	 	39	  	
    8.2	  	Appointment of Agent	  	 	40	  	
    8.3	  	Waiver of Claims	  	 	40	  	
    8.4	  	Designation of Non-Lender Secured Parties	  	 	40	  	
			
SECTION 9	  	MISCELLANEOUS	  	 	41	  	
    9.1	  	Amendments in Writing	  	 	41	  	
    9.2	  	Notices	  	 	41	  	
    9.3	  	No Waiver by Course of Conduct; Cumulative Remedies	  	 	41	  	
    9.4	  	Enforcement Expenses; Indemnification	  	 	42	  	
    9.5	  	Successors and Assigns	  	 	42	  	
    9.6	  	Set-Off	  	 	42	  	
    9.7	  	Counterparts	  	 	43	  	
    9.8	  	Severability	  	 	43	  	
    9.9	  	Section Headings	  	 	43	  	
    9.10	  	Integration	  	 	43	  	
    9.11	  	GOVERNING LAW	  	 	43	  	
    9.12	  	Submission to Jurisdiction; Waivers	  	 	43	  	
    9.13	  	Acknowledgments	  	 	44	  	
    9.14	  	WAIVER OF JURY TRIAL	  	 	44	  	
    9.15	  	Additional U.S. Granting Parties	  	 	45	  	
    9.16	  	Releases	  	 	45	  	
    9.17	  	Judgment	  	 	47	  	
    9.18	  	Transfer Tax Acknowledgment	  	 	47	  	

SCHEDULES	
		
1	  	Notice Addresses of U.S. Granting Parties	
2	  	Pledged Securities	
3	  	Perfection Matters	
4A	  	Financing Statements	
4B	  	Granting Party Information	
5	  	Intellectual Property	
6	  	Commercial Tort Claims	
7	  	Letter-of-Credit Rights	
	
ANNEXES	
		
1	  	Acknowledgment and Consent of Issuers who are not U.S. Granting Parties	
2	  	Assumption Agreement	
3	  	Supplemental Agreement	
4	  	Joinder and Release	
 
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U.S. GUARANTEE AND COLLATERAL AGREEMENT
U.S. GUARANTEE AND COLLATERAL AGREEMENT, dated as of July [ — ], 2014, made by VERITIV CORPORATION, a Delaware corporation (as further defined in the ABL Credit Agreement, “ Holding ”), XPEDX INTERMEDIATE, LLC, a Delaware limited liability company, in its specific capacity as Parent Borrower (together with its successors and assigns, the “ Parent Borrower ”), XPEDX, LLC, a New York limited liability company (the “ OpCo Borrower ”), each Domestic Subsidiary Borrower of the Parent Borrower party hereto from time to time (as further defined in subsection 1.1 , the “ Subsidiary Borrowers ”; the Parent Borrower, the OpCo Borrower and the Subsidiary Borrowers, the “ U.S. Borrowers ”) and certain other Domestic Subsidiaries of the Parent Borrower from time to time party hereto, in favor of BANK OF AMERICA, N.A., as collateral agent (in such capacity, the “ ABL Collateral Agent ”) and administrative agent (in such capacity, the “ Administrative Agent ”) for the banks and other financial institutions from time to time parties to the ABL Credit Agreement described below.
W I T N E S S E T H:
WHEREAS, pursuant to that certain ABL Credit Agreement, dated as of the date hereof (as amended, waived, supplemented or otherwise modified from time to time, together with any agreement extending the maturity of, or restructuring, refunding, refinancing or increasing the Indebtedness under such agreement or any successor agreements, the “ ABL Credit Agreement ”), among the Parent Borrower, the OpCo Borrower, the Subsidiary Borrowers, the Administrative Agent, the ABL Collateral Agent and the other parties party thereto, the Lenders (as defined in subsection 1.1 ) have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the conditions set forth therein;
WHEREAS, the U.S. Borrowers are members of an affiliated group of companies that includes Holding, the Parent Borrower, the OpCo Borrower, the Subsidiary Borrowers, the Parent Borrower’s other Domestic Subsidiaries that are party hereto and any other Domestic Subsidiaries of the Parent Borrower (other than any Excluded Subsidiary (as defined in the ABL Credit Agreement)) that becomes a party hereto from time to time after the date hereof (Holding, the Parent Borrower, the OpCo Borrower and such Domestic Subsidiaries (other than any Excluded Subsidiary collectively, the “ U.S. Granting Parties ”));
WHEREAS, the proceeds of the extensions of credit under the ABL Credit Agreement will be used in part to enable the U.S. Borrowers to make valuable transfers to one or more of the other U.S. Granting Parties in connection with the operation of their respective businesses;
WHEREAS, the Parent Borrower and the other U.S. Granting Parties are engaged in related businesses, and each such U.S. Granting Party will derive substantial direct and indirect benefit from the making of the extensions of credit under the ABL Credit Agreement;
WHEREAS, it is a condition to the obligation of the Lenders to make their respective extensions of credit under the ABL Credit Agreement that the U.S. Granting Parties shall execute and deliver this Agreement to the ABL Collateral Agent for the benefit of the Secured Parties; and
WHEREAS, the ABL Collateral Agent and one or more Additional Agents may in the future enter into one or more Intercreditor Agreements, including an intercreditor agreement substantially in the form attached to the ABL Credit Agreement as Exhibit E thereto (with such changes as the Administrative Agent may deem reasonably necessary or advisable due to a change in applicable law) or such other form as may be agreed between the Borrower Representative and the ABL Collateral Agent (and approved by the Required Lenders), and acknowledged by Holding, the U.S. Borrowers and the

other U.S. Granting Parties (as amended, waived, supplemented or otherwise modified from time to time (subject to subsection 9.1 ), the “ Base Intercreditor Agreement ”), and one or more Other Intercreditor Agreements or Intercreditor Agreement Supplements.
NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent, the ABL Collateral Agent and the Lenders to enter into the ABL Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each U.S. Granting Party hereby agrees with the Administrative Agent and the ABL Collateral Agent, for the benefit of the Secured Parties (as defined herein), as follows:
SECTION 1 DEFINED TERMS
1.1 Definitions .
(a) Unless otherwise defined herein, terms defined in the ABL Credit Agreement and used herein shall have the meanings given to them in the ABL Credit Agreement, and the following terms that are defined in the Code (as defined below and in effect on the date hereof) are used herein as so defined: Cash Proceeds, Chattel Paper, Commercial Tort Claims, Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures, General Intangibles, Goods, Letter-of-Credit Rights, Money, Promissory Notes, Records, Securities, Securities Accounts and Supporting Obligations.
(b) The following terms shall have the following meanings:
“ ABL Collateral Agent ”: as defined in the preamble hereto.
“ ABL Credit Agreement ”: as defined in the recitals hereto.
“ Accounts ”: all accounts (as defined in the Code) of each U.S. Grantor, including, without limitation, all Accounts (as defined in the ABL Credit Agreement) and Accounts Receivable of such U.S. Grantor.
“ Accounts Receivable ”: any right to payment, whether or not earned by performance, for goods sold, leased, licensed, assigned or otherwise disposed, or for services rendered or to be rendered, which is not evidenced by an instrument (as defined in the Code) or Chattel Paper.
“ Additional Agent ”: any administrative agent, collateral agent, security agent, trustee or other representative, in each case including any successor thereto, for or of any one or more secured parties in respect of any Incurrence of Indebtedness (including under subsection 8.1(a) of the ABL Credit Agreement) that is permitted by the ABL Credit Agreement to be secured by a Lien on the Security Collateral.
“ Adjusted Net Worth ”: of any U.S. Guarantor at any time, the greater of ( x ) $0 and ( y ) the amount by which the fair saleable value of such U.S. Guarantor’s assets on the date of the respective payment hereunder exceeds its debts and other liabilities (including contingent liabilities, but without giving effect to any of its obligations under this Agreement or any other Loan Document).
“ Administrative Agent ”: as defined in the preamble hereto.
“ Agreement ”: this U.S. Guarantee and Collateral Agreement, as the same may be amended, supplemented, waived or otherwise modified from time to time.
 
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“ Applicable Law ”: as defined in subsection 9.8 .
“ Bank Products Affiliate ”: shall mean any Person who ( i ) has entered into a Bank Products Agreement with a U.S. Grantor with the obligations of such U.S. Grantor thereunder being secured by one or more Loan Documents, ( ii ) was an Agent, a Lender or an Affiliate of a Lender on the date hereof, or at the time of entry into such Bank Products Agreement, or on the date hereof, or at the time of the designation referred to in the following clause (iii) and ( iii ) has been designated by the Parent Borrower for and on behalf of the U.S. Borrowers in accordance with subsection 8.4 .
“ Bank Products Agreement ”: any agreement pursuant to which a bank or other financial institution agrees to provide ( i ) treasury services, ( ii ) credit card, merchant card, purchasing card or stored value card services (including, without limitation, processing and other administrative services with respect thereto), ( iii ) cash management services (including, without limitation, controlled disbursements, credit cards, credit card processing services, automated clearinghouse transactions, return items, netting, overdrafts, depository, lockbox, stop payment, electronic funds transfer, information reporting, wire transfer and interstate depository network services) and ( iv ) other similar banking products or services as may be requested by any U.S. Grantor (other than letters of credit and other than loans except indebtedness arising from services described in clauses ( i ) through ( iii ) of this definition).
“ Bankruptcy Case ”: ( i ) Holding or any of its Subsidiaries commencing any case, proceeding or other action ( A ) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or ( B ) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Holding, or any of its Subsidiaries making a general assignment for the benefit of its creditors; or ( ii ) there being commenced against Holding or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which ( A ) results in the entry of an order for relief or any such adjudication or appointment or ( B ) remains undismissed, undischarged or unbonded for a period of 60 days.
“ Bankruptcy Code ”: Title 11 of the United States Code.
“ Base Intercreditor Agreement ”: as defined in the recitals hereto.
“ Borrower Obligations ”: with respect to any Borrower, the collective reference to all obligations and liabilities of such Borrower in respect of the unpaid principal of and interest on (including, without limitation, interest and fees accruing after the maturity of the Loans and Reimbursement Obligations and interest and fees accruing after (or that would accrue but for) the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Borrower, whether or not a claim for post-filing or post-petition interest or fees is allowed in such proceeding) the Loans, the Reimbursement Obligations, and all other obligations and liabilities of such Borrower to the Secured Parties, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the ABL Credit Agreement, the Loans, the Letters of Credit, this Agreement, the other Loan Documents, any Hedging Agreement entered into with any Hedging Affiliate or any Bank Products Agreement entered into with any Bank Products Affiliate, in each case whether on account of principal, interest, reimbursement obligations, amounts payable in connection with any such Bank Products Agreement or termination of any transaction entered into pursuant to any such Interest Rate Agreement, fees, indemnities, costs, expenses or otherwise (including, without limitation, all reasonable fees, expenses and disbursements of counsel to the
 
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Administrative Agent or any other Secured Party that are required to be paid by such Borrower pursuant to the terms of the ABL Credit Agreement or any other Loan Document). With respect to any U.S. Guarantor, if and to the extent, under the Commodity Exchange Act or any rule, regulation or order of the CFTC (or the application or official interpretation of any thereof), all or a portion of the guarantee of such U.S. Guarantor of, or the grant by such U.S. Guarantor of a security interest for, the obligation (the “ Excluded Borrower Obligation ”) to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act (or the analogous term or section in any amended or successor statute) is or becomes illegal, the Borrower Obligations guaranteed by such U.S. Guarantor shall not include any such Excluded Borrower Obligation.
“ Borrowers ”: U.S. Borrowers and Canadian Borrowers.
“ Cash Flow Agent ”: any administrative agent, collateral agent, security agent, trustee or other representative, in each case including any successor thereto, for or of any one or more secured parties in respect of any Incurrence of Indebtedness (including under subsection 8.1(z) of the ABL Credit Agreement) that is permitted by the ABL Credit Agreement to be secured by a Lien on the Security Collateral, which Lien ranks senior to the Lien of the ABL Collateral Agent with respect to Non-ABL Priority Collateral.
“ CFTC ”: the Commodity Futures Trading Commission or any successor to the Commodity Futures Trading Commission.
“ Code ”: the Uniform Commercial Code as from time to time in effect in the State of New York.
“ Collateral ”: as defined in subsection 3.1 ; provided that, for purposes of Section 8 , “Collateral” shall have the meaning assigned to such term in the ABL Credit Agreement.
“ Collateral Account Bank ”: any bank or an Affiliate thereof which at all times is the ABL Collateral Agent or a Lender or an Affiliate thereof, as selected by the relevant U.S. Grantor and consented to in writing by the ABL Collateral Agent (such consent not to be unreasonably withheld or delayed).
“ Collateral Proceeds Account ”: a non-interest bearing cash collateral account established and maintained by the relevant U.S. Grantor at an office of the Collateral Account Bank in the name, and in the sole dominion and control of, the ABL Collateral Agent for the benefit of the Secured Parties.
“ Collateral Representative ”: ( i ) if no Intercreditor Agreement is then in effect, the ABL Collateral Agent and ( ii ) if any Intercreditor Agreement is then in effect, the Person acting thereunder as representative for the ABL Collateral Agent and the Secured Parties for the applicable purpose contemplated by this Agreement.
“ Commercial Tort Action ”: any action, other than an action primarily seeking declaratory or injunctive relief with respect to claims asserted or expected to be asserted by Persons other than the U.S. Grantors, that is commenced by a U.S. Grantor in the courts of the United States of America, any state or territory thereof or any political subdivision of any such state or territory, in which any U.S. Grantor seeks damages arising out of torts committed against it that would reasonably be expected to result in a damage award to it exceeding $20,000,000.
“ Commodity Exchange Act ”: the Commodity Exchange Act (7 U.S.C. § 1 et seq .), as in effect from time to time, or any successor statute.
 
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“ Contracts ”: with respect to any U.S. Grantor, all contracts, agreements, instruments and indentures in any form and portions thereof, to which such U.S. Grantor is a party or under which such U.S. Grantor or any property of such U.S. Grantor is subject, as the same may from time to time be amended, supplemented, waived or otherwise modified, and all rights of such U.S. Grantor thereunder, including, without limitation, ( i ) all rights of such U.S. Grantor to receive moneys due and to become due to it thereunder or in connection therewith, ( ii ) all rights of such U.S. Grantor to damages arising thereunder and ( iii ) all rights of such U.S. Grantor to perform and to exercise all remedies thereunder.
“ Copyright Licenses ”: with respect to any U.S. Grantor, all United States written license agreements of such U.S. Grantor providing for the grant by or to such U.S. Grantor of any right under any United States copyright of such U.S. Grantor, other than agreements with any Person that is an Affiliate or a Subsidiary of the Parent Borrower or such U.S. Grantor, including, without limitation, any license agreements listed on Schedule 5 , subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Copyrights ”: with respect to any U.S. Grantor, all of such U.S. Grantor’s right, title and interest in and to all United States copyrights, whether or not the underlying works of authorship have been published or registered, all United States copyright registrations and copyright applications, including, without limitation, any copyright registrations and copyright applications listed on Schedule 5 , and ( i ) all renewals thereof, ( ii ) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof and ( iii ) the right to sue or otherwise recover for past, present and future infringements and misappropriations thereof.
“ Deposit Account ”: any “deposit account” as such term is defined in the Code (as in effect on the date hereof), now or hereafter maintained by any U.S. Grantor, and, in any event, shall include, but shall not be limited to all DDAs, all Concentration Accounts and the U.S. Core Concentration Accounts.
“ Excluded Assets ”: as defined in subsection 3.3 .
“ first priority ”: with respect to any Lien purported to be created by this Agreement, that such Lien is the most senior Lien to which such Collateral is subject.
“ Foreign Intellectual Property ”: any right, title or interest in or to any copyrights, copyright licenses, patents, patent applications, patent licenses, trade secrets, trade secret licenses, trademarks, service marks, trademark and service mark applications, trade names, trade dress, trademark licenses, technology, know-how and processes or any other intellectual property governed by or arising or existing under, pursuant to or by virtue of the laws of any jurisdiction other than the United States of America or any state thereof.
“ Guarantor Obligations ”: with respect to any U.S. Guarantor, the collective reference to ( i ) the Obligations guaranteed by such U.S. Guarantor pursuant to Section 2 and ( ii ) all obligations and liabilities of such U.S. Guarantor that may arise under or in connection with this Agreement or any other Loan Document to which such U.S. Guarantor is a party, any Hedging Agreement entered into with any Hedging Affiliate or any Bank Products Agreement entered into with any Bank Products Affiliate, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all reasonable fees, expenses and disbursements of counsel to the Administrative Agent or to any other Secured Party that are required to be paid by such U.S. Guarantor pursuant to the terms of this Agreement or any other Loan Document and interest and fees accruing after (or that would accrue but for) the filing of any petition in bankruptcy, or the
 
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commencement of any insolvency, reorganization or like proceeding, relating to such U.S. Guarantor, whether or not a claim for post-filing or post-petition interest or fees is allowed in such proceeding). With respect to any U.S. Guarantor, if and to the extent, under the Commodity Exchange Act or any rule, regulation or order of the CFTC (or the application or official interpretation of any thereof), all or a portion of the guarantee of such U.S. Guarantor of, or the grant by such U.S. Guarantor of a security interest for, the obligation (together with the Excluded Borrower Obligation, the “ Excluded Obligation ”) to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act (or the analogous term or section in any amended or successor statute) is or becomes illegal, the Guarantor Obligations of such U.S. Guarantor shall not include any such Excluded Obligation.
“ Hedging Affiliate ”: any Person who ( i ) has entered into a Hedging Agreement with any U.S. Grantor with the obligations of such U.S. Grantor thereunder being secured by one or more Loan Documents, ( ii ) was an Agent, a Lender or an Affiliate of a Lender on the date hereof, or at the time of entry into such Hedging Agreement, or at the time of the designation referred to in the following clause (iii), and ( iii ) has been designated by the Parent Borrower for and on behalf of the U.S. Borrowers in accordance with subsection 8.4 .
“ Hedging Agreement ”: any Interest Rate Agreement, Commodities Agreement, Currency Agreement or any other credit or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity, credit or equity values or creditworthiness (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.
“ Holding ”: as defined in the preamble hereto.
“ Instruments ”: as defined in Article 9 of the Code but excluding Pledged Securities.
“ Intellectual Property ”: with respect to any U.S. Grantor, the collective reference to such U.S. Grantor’s Copyrights, Copyright Licenses, Patents, Patent Licenses, Trade Secrets, Trade Secret Licenses, Trademarks and Trademark Licenses.
“ Intercompany Note ”: with respect to any U.S. Grantor, any promissory note in a principal amount in excess of $5,000,000 evidencing loans made by such U.S. Grantor to Holding, the Parent Borrower or any of its Subsidiaries.
“ Inventory ”: with respect to any U.S. Grantor, all inventory (as defined in the Code) of such U.S. Grantor, including, without limitation, all Inventory (as defined in the ABL Credit Agreement) of such U.S. Grantor.
“ Investment Property ”: the collective reference to ( i ) all “investment property” as such term is defined in Section 9-102(a)(49) of the Code as in effect on the date hereof (other than ( a ) Capital Stock (including for these purposes any investment deemed to be Capital Stock for United States tax purposes) of any Foreign Subsidiary in excess of 65% of any series of such Capital Stock and ( b ) any Capital Stock excluded from the definition of “Pledged Stock”) and ( ii ) whether or not constituting “investment property” as so defined, all Pledged Securities.
“ Issuers ”: the collective reference to issuers of Pledged Stock, including (as of the Closing Date) the Persons identified on Schedule 2 as the issuers of Pledged Stock together with any successors to such companies.
 
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“ Lender Secured Parties ”: the collective reference to ( i ) the Administrative Agent, the ABL Collateral Agent and each Other Representative, ( ii ) the Lenders (including the Canadian Facility Lenders, the Issuing Lenders and the Swing Line Lender), and ( iii ) each of their respective successors and assigns and their permitted transferees and endorsees.
“ Non-Lender Secured Parties ”: the collective reference to all Bank Products Affiliates and Hedging Affiliates and their respective successors, assigns, transferees and replacements thereof, in each case in their capacity as such.
“ Obligations ”: ( i ) in the case of each Borrower, its Borrower Obligations and ( ii ) in the case of each U.S. Guarantor, its Guarantor Obligations.
“ Parent Borrower ”: as defined in the preamble hereto.
“ Patent Licenses ”: with respect to any U.S. Grantor, all United States written license agreements of such U.S. Grantor providing for the grant by or to such U.S. Grantor of any right under any United States patent, patent application, or patentable invention other than agreements with any Person that is an Affiliate or a Subsidiary of the Parent Borrower or such U.S. Grantor, including, without limitation, the license agreements listed on Schedule 5 , subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Patents ”: with respect to any U.S. Grantor, all of such U.S. Grantor’s right, title and interest in and to all United States patents, patent applications and patentable inventions and all reissues and extensions thereof, including, without limitation, all patents and patent applications identified in Schedule 5 , and including, without limitation, ( i ) all inventions and improvements described and claimed therein, ( ii ) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, ( iii ) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof), and ( iv ) all other rights corresponding thereto in the United States and all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon, and all other rights of any kind whatsoever of such U.S. Grantor accruing thereunder or pertaining thereto.
“ Pledged Collateral ”: as to any U.S. Pledgor other than Holding, the Pledged Securities, and as to Holding, the Pledged Stock, in all cases now owned or at any time hereafter acquired by such U.S. Pledgor, and any Proceeds thereof.
“ Pledged Notes ”: with respect to any U.S. Pledgor other than Holding, all Intercompany Notes at any time issued to, or held or owned by, such U.S. Pledgor.
“ Pledged Securities ”: the collective reference to the Pledged Notes and the Pledged Stock.
“ Pledged Stock ”: with respect to any U.S. Pledgor other than Holding, the shares of Capital Stock listed on Schedule 2 as held by such U.S. Pledgor, together with any other shares of Capital Stock of any Subsidiary of such U.S. Pledgor required to be pledged by such U.S. Pledgor pursuant to subsection 7.9 of the ABL Credit Agreement, as well as any other shares, stock, unit or other similar certificates, options or rights of any nature whatsoever in respect of any Capital Stock of any Issuer that may be issued or granted to, or held by, such U.S. Pledgor while this Agreement is in effect, and, with respect to Holding, the shares of Capital Stock of the Parent Borrower, as well as any other shares, stock,
 
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unit or other similar certificates, options or rights of any nature whatsoever in respect of the Capital Stock of the Parent Borrower that may be issued or granted to, or held by, Holding while this Agreement is in effect, in each case, for the avoidance of doubt, unless and until such time as the respective pledge of such Capital Stock under this Agreement is released in accordance with the terms hereof and of the ABL Credit Agreement; provided that in no event shall there be pledged, nor shall any U.S. Pledgor be required to pledge, directly or indirectly, ( i ) more than 65% of any series of the outstanding Capital Stock (including for these purposes any investment deemed to be Capital Stock for United States tax purposes) of any Foreign Subsidiary, ( ii ) any Capital Stock of a Subsidiary of any Foreign Subsidiary, ( iii )  de minimis shares of a Foreign Subsidiary held by any U.S. Pledgor as a nominee or in a similar capacity, ( iv ) any Capital Stock of any Captive Insurance Subsidiary, ( v ) Capital Stock of any Subsidiary that is not a Loan Party, or of any joint venture, in each case that is prohibited (for so long as such restriction or any replacement or renewal thereof is in effect) by any applicable Contractual Obligation or Requirement of Law from being pledged to secure the Obligations or that would require governmental (including regulatory) consent, approval, license or authorization to be pledged unless such consent, approval, license or authorization has been received and ( vi ) without duplication, any Excluded Assets.
“ Proceeds ”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the Code (as in effect on the date hereof) and, in any event, Proceeds of Pledged Securities shall include, without limitation, all dividends or other income from the Pledged Securities, collections thereon or distributions or payments with respect thereto.
“ Restrictive Agreements ”: as defined in subsection 3.3(a) .
“ Secured Parties ”: the collective reference to the Lender Secured Parties and the Non-Lender Secured Parties.
“ Security Collateral ”: with respect to any U.S. Granting Party, collectively, the Collateral (if any) and the Pledged Collateral (if any) of such U.S. Granting Party.
“ Specified Assets ”: as defined in subsection 4.2.2(b) .
“ Subsidiary Borrowers ”: any Subsidiary (other than the Canadian Borrower) that becomes a U.S. Borrower pursuant to a Joinder Agreement together with their respective successors and assigns.
“ Trade Secret Licenses ”: with respect to any U.S. Grantor, all United States written license agreements of such U.S. Grantor providing for the grant by or to such U.S. Grantor of any right under any United States trade secrets, including, without limitation, know-how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, other than agreements with any Person that is an Affiliate or a Subsidiary of the Parent Borrower or such U.S. Grantor, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Trade Secrets ”: with respect to any U.S. Grantor, all of such U.S. Grantor’s right, title and interest in and to all United States trade secrets, including, without limitation, know-how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, including, without limitation, ( i ) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses, non-disclosure agreements and memoranda of understanding entered into in connection therewith, and damages and payments for past or future misappropriations thereof, and ( ii ) the right to sue or otherwise recover for past, present or future misappropriations thereof.
 
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“ Trademark Licenses ”: with respect to any U.S. Grantor, all United States written license agreements of such U.S. Grantor providing for the grant by or to such U.S. Grantor of any right under any United States trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, other than agreements with any Person that is an Affiliate or a Subsidiary of the Parent Borrower or such U.S. Grantor, including, without limitation, the license agreements listed on Schedule 5 , subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Trademarks ”: with respect to any U.S. Grantor, all of such U.S. Grantor’s right, title and interest in and to all United States trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, trademark and service mark registrations, and applications for trademark or service mark registrations (except for “intent to use” applications for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has been filed and accepted), and any renewals thereof, including, without limitation, each registration and application identified in Schedule 5 , and including, without limitation, ( i ) the right to sue or otherwise recover for any and all past, present and future infringements or dilutions thereof, ( ii ) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof), and ( iii ) all other rights corresponding thereto in the United States and all other rights of any kind whatsoever of such U.S. Grantor accruing thereunder or pertaining thereto in the United States, together in each case with the goodwill of the business connected with the use of, and symbolized by, each such trademark, service mark, trade name, trade dress or other indicia of trade origin or business identifiers.
“ ULC ”: an Issuer that is an unlimited company, unlimited liability corporation or unlimited liability company.
“ ULC Laws ”: the Companies Act (Nova Scotia), the Business Corporations Act (British Columbia), Business Corporations Act (Alberta) and all laws of Nova Scotia, British Columbia, Alberta or any other province or territory of Canada related to ULCs.
“ ULC Shares ”: shares or other equity interests in the Capital Stock of a ULC.
“ U.S. Borrowers ”: as defined in the preamble hereto.
“ U.S. Granting Parties ”: as defined in the recitals hereto.
“ U.S. Grantor ”: Holding, the U.S. Borrowers and each of the Parent Borrower’s other Domestic Subsidiaries that are party hereto and any other Domestic Subsidiary of the Parent Borrower that becomes a party hereto from time to time after the date hereof.
“ U.S. Guarantors ”: the collective reference to each U.S. Granting Party, provided , that when referring to the U.S. Borrowers as U.S. Guarantors, such reference shall be a reference solely to a guaranty of the Obligations of the Canadian Borrowers.
“ U.S. Pledgor ”: Holding (solely with respect to the Pledged Stock held by Holding in the Parent Borrower), each U.S. Borrower (with respect to Pledged Securities held by the applicable U.S. Borrower and all other Pledged Collateral of such U.S. Borrower) and each other U.S. Grantor (with respect to Pledged Securities held by such U.S. Grantor and all other Pledged Collateral of such U.S. Grantor).
 
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“ Vehicles ”: all cars, trucks, trailers, construction and earth moving equipment and other vehicles covered by a certificate of title law of any state and all tires and other appurtenances to any of the foregoing.
1.2 Other Definitional Provisions .
(a) The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Annex references are to this Agreement unless otherwise specified. The words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.”
(b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral, Pledged Collateral or Security Collateral or any part thereof, when used in relation to a U.S. Granting Party shall refer to such U.S. Granting Party’s Collateral, Pledged Collateral or Security Collateral or the relevant part thereof.
(d) All references in this Agreement to any of the property described in the definition of the term “Collateral,” “Pledged Collateral” or “Security Collateral,” or to any Proceeds thereof, shall be deemed to be references thereto only to the extent the same constitute Collateral, Pledged Collateral or Security Collateral, respectively.
SECTION 2 GUARANTEE
2.1 Guarantee .
(a) Each of the U.S. Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the benefit of the Secured Parties, the prompt and complete payment and performance by each Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of the Borrower Obligations of such Borrower owed to the Secured Parties.
(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each U.S. Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount that can be guaranteed by such U.S. Guarantor under applicable law, including applicable federal and state laws relating to the insolvency of debtors; provided that, to the maximum extent permitted under applicable law, it is the intent of the parties hereto that the rights of contribution of each U.S. Guarantor provided in subsection 2.2 be included as an asset of the respective U.S. Guarantor in determining the maximum liability of such U.S. Guarantor hereunder.
(c) Each U.S. Guarantor agrees that the Borrower Obligations guaranteed by it hereunder may at any time and from time to time exceed the amount of the liability of such U.S. Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent or any other Secured Party hereunder.
 
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(d) The guarantee contained in this Section 2 shall remain in full force and effect until the earliest to occur of ( i ) the first date on which all the Loans, any Reimbursement Obligations, all other Borrower Obligations then due and owing, and the obligations of each U.S. Guarantor under the guarantee contained in this Section 2 then due and owing shall have been satisfied by payment in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments shall be terminated, notwithstanding that from time to time during the term of the ABL Credit Agreement any of the Borrowers may be free from any Borrower Obligations, ( ii ) as to any U.S. Guarantor, the sale or other disposition of all of the Capital Stock of such U.S. Guarantor (to a Person other than the U.S. Borrowers or a U.S. Guarantor), or any other transaction or occurrence as a result of which such U.S. Guarantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the ABL Credit Agreement and ( iii ) as to any U.S. Guarantor, such U.S. Guarantor becoming an Excluded Subsidiary.
(e) No payment made by any Borrower, any of the U.S. Guarantors, any other U.S. Guarantor or any other Person or received or collected by the Administrative Agent or any other Secured Party from any of the Borrowers, any of the U.S. Guarantors, any other U.S. Guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of any of the Borrower Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any U.S. Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such U.S. Guarantor in respect of the Borrower Obligations or any payment received or collected from such U.S. Guarantor in respect of any of the Borrower Obligations), remain liable for the Borrower Obligations of each Borrower guaranteed by it hereunder up to the maximum liability of such U.S. Guarantor hereunder until the earliest to occur of ( i ) the first date on which all the Loans, any Reimbursement Obligations and all other Borrower Obligations then due and owing, are paid in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments are terminated, ( ii ) as to any U.S. Guarantor, a sale or other disposition of all of the Capital Stock of such U.S. Guarantor (other than to a U.S. Borrower or a U.S. Guarantor), or any other transaction or occurrence as a result of which such U.S. Guarantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case, that is permitted under the ABL Credit Agreement and ( iii ) as to any U.S. Guarantor, such U.S. Guarantor becoming an Excluded Subsidiary.
2.2 Right of Contribution . Each U.S. Guarantor hereby agrees that to the extent that a U.S. Guarantor shall have paid more than its proportionate share (based, to the maximum extent permitted by law, on the respective Adjusted Net Worths of the U.S. Guarantors on the date the respective payment is made) of any payment made hereunder, such U.S. Guarantor shall be entitled to seek and receive contribution from and against any other U.S. Guarantor hereunder that has not paid its proportionate share of such payment. Each U.S. Guarantor’s right of contribution shall be subject to the terms and conditions of subsection 2.3 . The provisions of this subsection 2.2 shall in no respect limit the obligations and liabilities of any U.S. Guarantor to the Administrative Agent and the other Secured Parties, and each U.S. Guarantor shall remain liable to the Administrative Agent and the other Secured Parties for the full amount guaranteed by such U.S. Guarantor hereunder.
2.3 No Subrogation . Notwithstanding any payment made by any U.S. Guarantor hereunder or any set-off or application of funds of any U.S. Guarantor by the ABL Collateral Agent or any other Secured Party, no U.S. Guarantor shall be entitled to be subrogated to any of the rights of the ABL Collateral Agent or any other Secured Party against any Borrower or any other U.S. Guarantor or any collateral security or guarantee or right of offset held by the ABL Collateral Agent or any other Secured
 
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Party for the payment of the Borrower Obligations, nor shall any U.S. Guarantor seek or be entitled to seek any contribution or reimbursement from any Borrower or any other U.S. Guarantor in respect of payments made by such U.S. Guarantor hereunder, until all amounts owing to the ABL Collateral Agent and the other Secured Parties by any Borrower on account of the Borrower Obligations are paid in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments are terminated. If any amount shall be paid to any U.S. Guarantor on account of such subrogation rights at any time when all of the Borrower Obligations shall not have been paid in full in cash or any Letter of Credit shall remain outstanding (except for Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) or any of the Commitments shall remain in effect, such amount shall be held by such U.S. Guarantor in trust for the ABL Collateral Agent and the other Secured Parties, segregated from other funds of such U.S. Guarantor, and shall, forthwith upon receipt by such U.S. Guarantor, be turned over to the ABL Collateral Agent in the exact form received by such U.S. Guarantor (duly indorsed by such U.S. Guarantor to the ABL Collateral Agent, if required), to be held as collateral security for all of the Borrower Obligations (whether matured or unmatured) guaranteed by such U.S. Guarantor and/or then or at any time thereafter may be applied against any Borrower Obligations, whether matured or unmatured, in such order as the ABL Collateral Agent may determine.
2.4 Amendments, etc. with Respect to the Obligations . To the maximum extent permitted by law, each U.S. Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any U.S. Guarantor and without notice to or further assent by any U.S. Guarantor, any demand for payment of any of the Borrower Obligations made by the ABL Collateral Agent, the Administrative Agent or any other Secured Party may be rescinded by the ABL Collateral Agent, the Administrative Agent or such other Secured Party and any of the Borrower Obligations continued, and the Borrower Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, waived, modified, accelerated, compromised, subordinated, waived, surrendered or released by the ABL Collateral Agent, the Administrative Agent or any other Secured Party, and the ABL Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, waived, modified, supplemented or terminated, in whole or in part, as the ABL Collateral Agent or the Administrative Agent (or the Required Lenders or the applicable Lender(s), as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the ABL Collateral Agent, the Administrative Agent or any other Secured Party for the payment of any of the Borrower Obligations may be sold, exchanged, waived, surrendered or released. None of the ABL Collateral Agent, the Administrative Agent and each other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for any of the Borrower Obligations or for the guarantee contained in this Section 2 or any property subject thereto, except to the extent required by applicable law.
2.5 Guarantee Absolute and Unconditional . Each U.S. Guarantor waives, to the maximum extent permitted by applicable law, any and all notice of the creation, renewal, extension or accrual of any of the Borrower Obligations and notice of or proof of reliance by the ABL Collateral Agent, the Administrative Agent or any other Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2 ; each of the Borrower Obligations, and any obligation contained therein, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2 ; and all dealings between any of the Borrowers and any of the U.S. Guarantors, on the one hand, and the ABL Collateral Agent, the Administrative Agent and the other Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee
 
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contained in this Section 2 . Each U.S. Guarantor waives, to the maximum extent permitted by applicable law, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any of the Borrowers or any of the other U.S. Guarantors with respect to any of the Borrower Obligations. Each U.S. Guarantor understands and agrees, to the extent permitted by law, that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and not of collection. Each U.S. Guarantor hereby waives, to the maximum extent permitted by applicable law, any and all defenses (other than any claim alleging breach of a contractual provision of any of the Loan Documents) that it may have arising out of or in connection with any and all of the following: ( a ) the validity or enforceability of the ABL Credit Agreement or any other Loan Document, any of the Borrower Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the ABL Collateral Agent, the Administrative Agent or any other Secured Party, ( b ) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by any of the Borrowers against the ABL Collateral Agent, the Administrative Agent or any other Secured Party, ( c ) any change in the time, place, manner or place of payment, amendment, or waiver or increase in any of the Obligations, ( d ) any exchange, non-perfection, taking, or release of Security Collateral, ( e ) any change in the structure or existence of any of the Borrowers, ( f ) any application of Security Collateral to any of the Obligations, ( g ) any law, regulation or order of any jurisdiction, or any other event, affecting any term of any Obligation or the rights of the ABL Collateral Agent, the Administrative Agent or any other Secured Party with respect thereto, including, without limitation, ( i ) the application of any such law, regulation, decree or order, including any prior approval, which would prevent the exchange of any currency (other than Dollars) for Dollars or the remittance of funds outside of such jurisdiction or the unavailability of Dollars in any legal exchange market in such jurisdiction in accordance with normal commercial practice, ( ii ) a declaration of banking moratorium or any suspension of payments by banks in such jurisdiction or the imposition by such jurisdiction or any Governmental Authority thereof of any moratorium on, the required rescheduling or restructuring of, or required approval of payments on, any indebtedness in such jurisdiction, ( iii ) any expropriation, confiscation, nationalization or requisition by such country or any Governmental Authority that directly or indirectly deprives any Borrower of any assets or their use, or of the ability to operate its business or a material part thereof, or ( iv ) any war (whether or not declared), insurrection, revolution, hostile act, civil strife or similar events occurring in such jurisdiction which has the same effect as the events described in clause (i), (ii) or (iii) above (in each of the cases contemplated in clauses (i) through (iv) above, to the extent occurring or existing on or at any time after the date of this Agreement), or ( h ) any other circumstance whatsoever (other than payment in full in cash of the Borrower Obligations guaranteed by it hereunder) (with or without notice to or knowledge of any of the Borrowers or such U.S. Guarantor) or any existence of or reliance on any representation by the Secured Parties that constitutes, or might be construed to constitute, an equitable or legal discharge of any of the Borrowers for the Borrower Obligations, or of such U.S. Guarantor under the guarantee contained in this Section 2 , in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any U.S. Guarantor, the ABL Collateral Agent, the Administrative Agent and any other Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any of the Borrowers, any other U.S. Guarantor or any other Person or against any collateral security or guarantee for the Borrower Obligations guaranteed by such U.S. Guarantor hereunder or any right of offset with respect thereto, and any failure by the ABL Collateral Agent, the Administrative Agent or any other Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from any of the Borrowers, any other U.S. Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any Borrower, any other U.S. Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any U.S. Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the ABL Collateral Agent, the Administrative Agent or any other Secured Party against any U.S. Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.
 
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2.6 Reinstatement . The guarantee of any U.S. Guarantor contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Borrower Obligations guaranteed by such U.S. Guarantor hereunder is rescinded or must otherwise be restored or returned by the ABL Collateral Agent, the Administrative Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Borrower or any U.S. Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Borrower or any U.S. Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.
2.7 Payments . Each U.S. Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim, in Dollars (or in the case of any amount required to be paid in any other currency pursuant to the requirements of the ABL Credit Agreement or other agreement relating to the respective Obligations, such other currency), at the Administrative Agent’s office specified in subsection 11.2 of the ABL Credit Agreement or such other address as may be designated in writing by the Administrative Agent to such U.S. Guarantor from time to time in accordance with subsection 11.2 of the ABL Credit Agreement.
SECTION 3 GRANT OF SECURITY INTEREST
3.1 Grant . Each U.S. Grantor (other than Holding) hereby grants, subject to existing licenses to use the Copyrights, Patents, Trademarks and Trade Secrets granted by such U.S. Grantor in the ordinary course of business, to the ABL Collateral Agent, for the benefit of the Secured Parties, a security interest in all of the Collateral of such U.S. Grantor, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations of such U.S. Grantor, except as provided in subsection 3.3 . The term “ Collateral ,” as to any U.S. Grantor, means the following property (wherever located) now owned or at any time hereafter acquired by such U.S. Grantor or in which such U.S. Grantor now has or at any time in the future may acquire any right, title or interest, except as provided in subsection 3.3 :
(a) all Accounts;
(b) all Money (including all cash);
(c) all Cash Equivalents;
(d) all Chattel Paper;
(e) all Contracts;
(f) all Deposit Accounts;
(g) all Documents;
(h) all Equipment and Goods;
(i) all General Intangibles;
(j) all Instruments;
 
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(k) all Intellectual Property;
(l) all Inventory;
(m) all Investment Property;
(n) all Letter-of-Credit Rights;
(o) all Fixtures;
(p) all Supporting Obligations;
(q) all Commercial Tort Claims constituting Commercial Tort Actions described in Schedule 6 (together with any Commercial Tort Actions subject to a further writing provided in accordance with subsection 5.2.12 );
(r) all books and records relating to the foregoing;
(s) the Collateral Proceeds Account; and
(t) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;
provided that, Collateral shall not include any Pledged Collateral, or any property or assets described in the proviso to the definition of Pledged Stock.
3.2 Pledged Collateral . Each U.S. Granting Party that is a U.S. Pledgor hereby grants to the ABL Collateral Agent, for the benefit of the Secured Parties, a security interest in all of the Pledged Collateral of such U.S. Pledgor now owned or at any time hereafter acquired by such U.S. Pledgor, including any Proceeds thereof, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations of such U.S. Pledgor, except as provided in subsection 3.3 .
3.3 Certain Limited Exceptions . No security interest is or will be granted pursuant to this Agreement or any other Security Document in any right, title or interest of any U.S. Grantor under or in, and “Collateral” and “Pledged Collateral” shall not include the following (collectively, the “ Excluded Assets ”):
(a) any Instruments, Contracts, Chattel Paper, General Intangibles, Copyright Licenses, Patent Licenses, Trademark Licenses, Trade Secret Licenses or other contracts or agreements with or issued by Persons other than Holding, a Subsidiary of Holding, the Parent Borrower, a Restricted Subsidiary or an Affiliate thereof (collectively, “ Restrictive Agreements ”) that would otherwise be included in the Security Collateral (and such Restrictive Agreements shall not be deemed to constitute a part of the Security Collateral) for so long as, and to the extent that, the granting of such a security interest pursuant hereto would result in a breach, default or termination of such Restrictive Agreements (in each case, except to the extent that, pursuant to the Code and any other applicable law, the granting of security interests therein can be made without resulting in a breach, default or termination of such Restrictive Agreements);
 
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(b) any Equipment or other property that would otherwise be included in the Security Collateral (and such Equipment or other property shall not be deemed to constitute a part of the Security Collateral) if such Equipment or other property ( x ) is subject to a Lien described in subsection 8.2(e) (with respect to Purchase Money Obligations or Capitalized Lease Obligations) or 8.2(n) (with respect to such Liens described in such subsection 8.2(d)) of the ABL Credit Agreement to the extent that the agreements governing such Purchase Money Obligations or Capitalized Lease Obligations prohibit the granting of a security interest to the ABL Collateral Agent hereunder (but in each case only for so long as such Liens are in place) or ( y ) is subject to any Lien in respect of Hedging Obligations permitted by subsection 8.2(d) that do not constitute Secured Bank Product Obligations of the ABL Credit Agreement to the extent that the agreements governing such Hedging Obligations prohibit the granting of a security interest to the ABL Collateral Agent hereunder (but in each case only for so long as such Liens are in place), and, in the case of such other property, such other property consists solely of ( i ) cash, Cash Equivalents or Temporary Cash Investments, together with proceeds, dividends and distributions in respect thereof, ( ii ) any assets relating to such assets, proceeds, dividends or distributions, or to such Hedging Obligations, and/or ( iii ) any other assets consisting of, relating to or arising under or in connection with ( 1 ) any Hedging Obligations or ( 2 ) any other agreements, instruments or documents related to any such Hedging Obligations or to any of the assets referred to in any of subclauses (i) through (iii) of this subclause (y);
(c) any property that ( A ) would otherwise be included in the Security Collateral (and such property shall not be deemed to constitute a part of the Security Collateral) if such property has been sold or otherwise transferred in connection with a Sale and Leaseback Transaction or ( B ) is subject to any Liens permitted under subsection 8.2 of the ABL Credit Agreement which relates to property subject to any such Sale and Leaseback Transaction or general intangibles related thereto (but only for so long as such Liens are in place), provided that, notwithstanding the foregoing, a security interest of the Collateral Agent shall attach to any money, securities or other consideration received by any U.S. Grantor as consideration for the sale or other disposition of such property as and to the extent such consideration would otherwise constitute Security Collateral;
(d) each U.S. Pledgor acknowledges that certain of the Pledged Collateral of such U.S. Pledgor may now or in the future consist of ULC Shares, and that it is the intention of the ABL Collateral Agent and each U.S. Pledgor that neither the ABL Collateral Agent nor any other Secured Party should under any circumstances prior to realization be held to be a “member” or “shareholder,” as applicable, of a ULC for the purposes of any ULC Laws. Therefore, notwithstanding any provisions to the contrary contained in this Agreement, the ABL Credit Agreement or any other Loan Document, where a U.S. Pledgor is the registered and beneficial owner of ULC Shares which are Pledged Collateral of such U.S. Pledgor, such U.S. Pledgor will remain the sole registered and beneficial owner of such ULC Shares until such time as such ULC Shares are effectively transferred into the name of the ABL Collateral Agent, any other Secured Party, or any other Person on the books and records of the applicable ULC. Accordingly, each U.S. Pledgor shall be entitled to receive and retain for its own account any dividend or other distribution, if any, in respect of such ULC Shares (except for any dividend or distribution comprised of share certificates representing Pledged Collateral, which shall be delivered to the Collateral Representative to hold as Pledged Collateral hereunder) and shall have the right to vote such ULC Shares and to control the direction, management and policies of the applicable ULC to the same extent as such U.S. Pledgor would if such ULC Shares were not pledged to the ABL Collateral Agent pursuant hereto. Nothing in this Agreement, the ABL Credit Agreement or any other Loan Document is intended to, and nothing in this Agreement, the ABL Credit Agreement
 
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or any other Loan Document shall, constitute the ABL Collateral Agent, any other Secured Party, or any other Person other than the applicable U.S. Pledgor, a member or shareholder of a ULC for the purposes of any ULC Laws (whether listed or unlisted, registered or beneficial), until such time as notice is given to such U.S. Pledgor and further steps are taken pursuant hereto or thereto so as to register the ABL Collateral Agent, any other Secured Party, or such other Person, as specified in such notice, as the holder of the ULC Shares. To the extent any provision hereof would have the effect of constituting the ABL Collateral Agent or any other Secured Party as a member or a shareholder, as applicable, of any ULC prior to such time, such provision shall be severed herefrom and shall be ineffective with respect to ULC Shares which are Pledged Collateral of any U.S. Pledgor, without otherwise invalidating or rendering unenforceable this Agreement or invalidating or rendering unenforceable such provision insofar as it relates to Pledged Collateral of any U.S. Pledgor which is not ULC Shares. Except upon the exercise of rights of the ABL Collateral Agent to sell, transfer or otherwise dispose of ULC Shares in accordance with this Agreement, each U.S. Pledgor shall not cause or permit, or enable an Issuer that is a ULC to cause or permit, the ABL Collateral Agent or any other Secured Party to: ( a ) be registered as a shareholder or member of such Issuer; ( b ) have any notation entered in their favor in the share register of such Issuer; ( c ) be held out as shareholders or members of such Issuer; ( d ) receive, directly or indirectly, any dividends, property or other distributions from such Issuer by reason of the ABL Collateral Agent holding the security interests over the ULC Shares; or ( e ) act as a shareholder of such Issuer, or exercise any rights of a shareholder including the right to attend a meeting of shareholders of such Issuer or to vote its ULC Shares;
(e) Capital Stock (including for these purposes any investment deemed to be Capital Stock for United States tax purposes) which is described in the proviso to the definition of Pledged Stock;
(f) any interest in leased real property (including Fixtures related thereto) (and there shall be no requirement to deliver landlord lien waivers, estoppels or collateral access letters);
(g) any fee interest in owned real property (including Fixtures related thereto) if the fair market value of such fee interest is less than the Dollar Equivalent of $25,000,000 individually;
(h) any Vehicles and any assets subject to a certificate of title;
(i) Letter-of-Credit Rights individually with a value of less than $7,500,000 (other than Letter-of-Credit Rights ( i ) to the extent such Letter-of-Credit Rights are Supporting Obligations in respect of Collateral and ( ii ) in which a security interest is automatically perfected by filings under the Code; provided that, notwithstanding any other provision of this Agreement or any other Loan Document, neither the Parent Borrower nor any U.S. Grantor will be required to confer perfection by control over any such Letter-of-Credit Rights) and Commercial Tort Claims individually with a value of less than $20,000,000;
(j) assets to the extent the granting or perfecting of a security interest in such assets would result in costs or other consequences to Holding or any of its Subsidiaries as reasonably determined in writing by the Parent Borrower, the Administrative Agent and, to the extent such assets would otherwise constitute ABL Priority Collateral, the ABL Collateral Agent, that are excessive in view of the benefits that would be obtained by the Secured Parties;
(k) those assets over which the granting of security interests in such assets would be prohibited by contract permitted under the ABL Credit Agreement, applicable law or regulation
 
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or the organizational or joint venture documents of any non-wholly owned Subsidiary (after giving effect to Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the Code (or any successor provision or provisions) as in effect in any relevant jurisdiction, or any other applicable law (including the Bankruptcy Code) or principles of equity), or to the extent that such security interests would result in material adverse tax consequences to the Parent Borrower or any one or more of its Subsidiaries as reasonably determined in writing by the Parent Borrower and consented to in writing by the ABL Collateral Agent (it being understood that the Lenders shall not require the Parent Borrower or any of its subsidiaries to enter into any security agreements or pledge agreements governed by foreign law);
(l) Foreign Intellectual Property;
(m) any aircraft, airframes, aircraft engines, helicopters, vessels or rolling stock or any Equipment or other assets constituting a part thereof;
(n) any Capital Stock and other securities of a Subsidiary of the Parent Borrower to the extent that the pledge of or grant of any other Lien on such Capital Stock and other securities for the benefit of the holders of securities results in Holding, the Parent Borrower or any of its Restricted Subsidiaries being required to file separate financial statements of such Subsidiary with the SEC (or any other governmental authority) pursuant to either Rule 3-10 or 3-16 of Regulation S-X under the Securities Act, or any other law, rule or regulation as in effect from time to time, but only to the extent necessary to not be subject to such requirement; and
(o) any assets or property of Holding, other than the Pledged Stock of the Parent Borrower.
3.4 Intercreditor Relations . The ABL Collateral Agent acknowledges and agrees that the relative priority of the Liens granted to the ABL Collateral Agent, the Administrative Agent, any Cash Flow Agent and any Additional Agent shall be determined solely pursuant to the applicable Intercreditor Agreements, and not by priority as a matter of law or otherwise. Notwithstanding anything herein to the contrary, the Liens and security interest granted to the ABL Collateral Agent pursuant to this Agreement, the obligations of the U.S. Grantors (including with respect to delivery of any Security Collateral) and the exercise of any right or remedy by the ABL Collateral Agent hereunder are subject to the provisions of the applicable Intercreditor Agreements. In the event of any conflict between the terms of any Intercreditor Agreement and this Agreement, the terms of such Intercreditor Agreement shall govern and control as among ( i ) the ABL Collateral Agent, any Cash Flow Agent and any Additional Agent, in the case of the Base Intercreditor Agreement, and ( ii ) the ABL Collateral Agent and any other secured creditor (or agent therefor) party thereto, in the case of any Other Intercreditor Agreement. In the event of any such conflict, each U.S. Grantor may act (or omit to act) in accordance with such Intercreditor Agreement, and shall not be in breach, violation or default of its obligations hereunder by reason of doing so.
SECTION 4 REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Each U.S. Guarantor . To induce the ABL Collateral Agent and the Lenders to enter into the ABL Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each U.S. Guarantor hereby represents and warrants to the ABL Collateral Agent and each other Secured Party that the representations and warranties set forth in Section 5 of the ABL Credit Agreement as they relate to such U.S. Guarantor or to the Loan Documents to which such U.S. Guarantor is a party, each of which representations and warranties is hereby incorporated herein by reference, are true and correct in all material respects, and the
 
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ABL Collateral Agent and each other Secured Party shall be entitled to rely on each of such representations and warranties as if fully set forth herein; provided that each reference in each such representation and warranty to the Parent Borrower’s knowledge shall, for the purposes of this subsection 4.1 , be deemed to be a reference to such U.S. Guarantor’s knowledge.
4.2 Representations and Warranties of Each U.S. Grantor . To induce the ABL Collateral Agent and the Lenders to enter into the ABL Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each U.S. Grantor hereby represents and warrants to the ABL Collateral Agent and each other Secured Party that, in each case after giving effect to the Transactions:
4.2.1 Title; No Other Liens . Except for the security interests granted to the ABL Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement and the other Liens permitted to exist on such U.S. Grantor’s Security Collateral by the ABL Credit Agreement (including, without limitation, subsection 8.2 thereof), such U.S. Grantor owns each item of such U.S. Grantor’s Collateral free and clear of any and all Liens. As of the Closing Date, except as set forth on Schedule 3 , no currently effective financing statement or other similar public notice with respect to any Lien securing Indebtedness on all or any part of such U.S. Grantor’s Security Collateral is on file or of record in any public office in the United States of America, any state, territory or dependency thereof or the District of Columbia, except such as have been filed in favor of the ABL Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement or as are permitted by the ABL Credit Agreement (including, without limitation, subsection 8.2 thereof) or any other Loan Document or for which termination statements will be delivered on the Closing Date.
4.2.2 Perfected First Priority Liens .
(a) This Agreement is effective to create, as collateral security for the Obligations of such U.S. Grantor, valid and enforceable Liens on such U.S. Grantor’s Security Collateral in favor of the ABL Collateral Agent for the benefit of the Secured Parties, except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
(b) Except with regard to ( i ) Liens (if any) on Specified Assets and ( ii ) any rights in favor of the United States government as required by law (if any), upon the completion of the Filings and, with respect to Instruments, Chattel Paper and Documents, upon the earlier of such Filing or the delivery to and continuing possession by the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, of all Instruments, Chattel Paper and Documents a security interest in which is perfected by possession, and upon obtaining and maintenance of “control” (as described in the Code) by the ABL Collateral Agent, the Administrative Agent, the applicable Collateral Representative or any Additional Agent, as applicable (or their respective agents appointed for purposes of perfection), in accordance with any applicable Intercreditor Agreement of the Collateral Proceeds Account, all Letter-of-Credit Rights and all Electronic Chattel Paper a security interest in which is perfected by “control,” and in the case of Commercial Tort Actions (other than such Commercial Tort Actions listed on Schedule 6 on the date of this Agreement), upon the taking of the actions required by subsection 5.2.12 , the Liens created pursuant to this Agreement will constitute valid Liens on and (to the extent provided herein) perfected security
 
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interests in such U.S. Grantor’s Security Collateral in favor of the ABL Collateral Agent for the benefit of the Secured Parties, and will be prior to all other Liens of all other Persons, in each case other than Liens permitted to have priority pursuant to subsection 8.2 of the ABL Credit Agreement (and subject to any applicable Intercreditor Agreement), and enforceable as such as against all other Persons other than Ordinary Course Transferees, except to the extent that the recording of an assignment or other transfer of title to the ABL Collateral Agent, Administrative Agent, the applicable Collateral Representative or any Additional Agent, (in accordance with any applicable Intercreditor Agreement) or the recording of other applicable documents in the United States Patent and Trademark Office or United States Copyright Office may be necessary for perfection or enforceability, and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. As used in this subsection 4.2.2(b) , the following terms shall have the following meanings:
“ Filings ”: the filing or recording of ( i ) the Financing Statements as set forth in Schedule 3 , ( ii ) this Agreement or a short form or notice thereof with respect to Intellectual Property as set forth in Schedule 3 , and ( iii ) any filings after the Closing Date in any other jurisdiction as may be necessary under any Requirement of Law.
“ Financing Statements ”: the financing statements attached hereto on Schedule 4A for filing in the jurisdictions listed in Schedule 4B .
“ Ordinary Course Transferees ”: ( i ) with respect to goods only, buyers in the ordinary course of business and lessees in the ordinary course of business to the extent provided in Section 9-320(a) and 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction, ( ii ) with respect to general intangibles only, licensees in the ordinary course of business to the extent provided in Section 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction and ( iii ) any other Person that is entitled to take free of the Lien pursuant to the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.
“ Specified Assets ”: the following property and assets of such U.S. Grantor:
 
 	(1)	Patents, Patent Licenses, Trademarks and Trademark Licenses to the extent that ( a ) Liens thereon cannot be perfected by the filing of financing statements under the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction or by the filing and acceptance of this Agreement or a short form or notice in the United States Patent and Trademark Office or ( b ) such Patents, Patent Licenses, Trademarks and Trademark Licenses are not, individually or in the aggregate, material to the business of the Parent Borrower and its Subsidiaries taken as a whole;	
 
 	(2)	Copyrights and Copyright Licenses with respect thereto and Accounts or receivables arising therefrom to the extent that ( a ) Liens thereon cannot be perfected by filing and acceptance of this Agreement or a short form or notice thereof in the United States Copyright Office or ( b ) the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction is not applicable to the creation or perfection of Liens thereon;	
 
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 	(3)	Collateral for which the perfection of Liens thereon requires filings in or other actions under the laws of jurisdictions outside of the United States of America, any State, territory or dependency thereof or the District of Columbia;	
 
 	(4)	goods included in Collateral received by any Person from any U.S. Grantor for “sale or return” within the meaning of Section 2-326(1)(b) of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction, to the extent of claims of creditors of such Person;	
 
 	(5)	Fixtures, Vehicles, any other assets subject to certificates of title and Money; and Cash Equivalents (other than Cash Equivalents constituting Investment Property to the extent a security interest therein is perfected by the filing of a financing statement under the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction);	
 
 	(6)	Proceeds of Accounts or Inventory which do not themselves constitute Collateral or which do not constitute identifiable Cash Proceeds or which have not yet been transferred to or deposited in the Collateral Proceeds Account (if any) or the Concentration Account of a U.S. Grantor subject to the ABL Collateral Agent’s control;	
 
 	(7)	Contracts, Accounts or receivables subject to the Assignment of Claims Act;	
 
 	(8)	uncertificated securities (to the extent a security interest is not perfected by the filing of a financing statement under the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction);	
 
 	(9)	any Goods (other than Inventory) in which a security interest is not perfected by filing a financing statement in the applicable U.S. Grantor’s “location” (within the meaning of Section 9-307 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction); and	
 
 	(10)	any assets specifically requiring perfection through control agreements (including cash, cash equivalents, deposit accounts or other bank or securities accounts), other than ( i ) any assets in which a security interest is automatically perfected by filings under the Code, ( ii ) Pledged Stock and ( iii ) DDAs, Concentration Accounts and the U.S. Core Concentration Account (in each case only to the extent required pursuant to subsection 4.16 of the ABL Credit Agreement).	
4.2.3 [Reserved]
4.2.4 Farm Products . None of such U.S. Grantor’s Collateral constitutes, or is the Proceeds of, Farm Products.
4.2.5 Accounts Receivable . The amounts represented by such U.S. Grantor (other than Holding) to the Administrative Agent or the other Secured Parties from time to time as owing by each account debtor or by all account debtors in respect of such U.S. Grantor’s (other than Holding) Accounts Receivable constituting ABL Priority Collateral will at such time be the correct amount, in all material respects, actually owing by such account debtor or debtors thereunder, except to the extent that appropriate reserves therefor have been established on the books of such U.S. Grantor (other than Holding) in accordance with GAAP. Unless otherwise
 
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indicated in writing to the Administrative Agent, each Account Receivable of such U.S. Grantor (other than Holding) arises out of a bona fide sale and delivery of goods or rendition of services by such U.S. Grantor (other than Holding). Such U.S. Grantor (other than Holding) has not given any account debtor any deduction in respect of the amount due under any such Account, except in the ordinary course of business, as otherwise permitted by the Loan Documents or as such U.S. Grantor (other than Holding) may otherwise advise the Administrative Agent in writing.
4.2.6 Patents, Copyrights and Trademarks . Schedule 5 lists all material Trademarks, material Copyrights and material Patents, in each case, registered in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, and owned by such U.S. Grantor (other than Holding) in its own name as of the date hereof, and all material Trademark Licenses, all material Copyright Licenses and all material Patent Licenses (including, without limitation, material Trademark Licenses for registered Trademarks, material Copyright Licenses for registered Copyrights and material Patent Licenses for registered Patents but excluding licenses to commercially available “off-the-shelf” software) owned by such U.S. Grantor (other than Holding) in its own name as of the date hereof, in each case, other than Foreign Intellectual Property.
4.2.7 Letter-of-Credit Rights . Schedule 7 lists all Letter-of-Credit Rights not constituting Excluded Assets owned by any U.S. Grantor (other than Holding) on the date hereof.
4.3 Representations and Warranties of Each U.S. Pledgor . To induce the ABL Collateral Agent, the Administrative Agent and the Lenders to enter into the ABL Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each U.S. Pledgor hereby represents and warrants to the ABL Collateral Agent and each other Secured Party that:
4.3.1 Except as provided in subsection 3.3 , the shares of Pledged Stock pledged by such U.S. Pledgor hereunder constitute ( i ) in the case of shares of a Domestic Subsidiary, all the issued and outstanding shares of all classes of the Capital Stock of such Domestic Subsidiary owned by such U.S. Pledgor and ( ii ) in the case of any Pledged Stock constituting Capital Stock of any Foreign Subsidiary, as of the Closing Date such percentage (not more than 65%) as is specified on Schedule 2 of all the issued and outstanding shares of all classes of the Capital Stock of each such Foreign Subsidiary owned by such U.S. Pledgor.
4.3.2 [Reserved].
4.3.3 Such U.S. Pledgor is the record and beneficial owner of, and has good title to, the Pledged Securities pledged by it hereunder, free of any and all Liens securing Indebtedness owing to any other Person, except the security interest created by this Agreement and Liens permitted by subsection 8.2 of the ABL Credit Agreement.
4.3.4 Except with respect to security interests in Pledged Securities (if any) constituting Specified Assets, upon delivery to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, of the certificates evidencing the Pledged Securities held by such U.S. Pledgor together with executed undated stock powers or other instruments of transfer, the security interest created by this Agreement in such Pledged Securities constituting certificated securities, assuming the continuing possession of such Pledged Securities by the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, will constitute a valid, perfected first priority (subject, in terms of priority only, to the priority of the Liens of the applicable Collateral
 
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Representative or any Additional Agent) security interest in such Pledged Securities to the extent provided in and governed by the Code enforceable in accordance with its terms against all creditors of such U.S. Pledgor and any Persons purporting to purchase such Pledged Securities from such U.S. Pledgor, to the extent provided in and governed by the Code, in each case subject to Liens permitted by subsection 8.2 of the ABL Credit Agreement (and by any applicable Intercreditor Agreement) to attach to such Pledged Securities, and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
4.3.5 Except with respect to security interests in Pledged Securities (if any) constituting Specified Assets, upon the earlier of ( x ) the filing of the Financing Statements or of financing statements delivered pursuant to subsection 7.9 of the ABL Credit Agreement in the relevant jurisdiction and ( y ) the obtaining and maintenance of “control” (as described in the Code) by the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent (or their respective agents appointed for purposes of perfection), as applicable, in accordance with any applicable Intercreditor Agreement, of all Pledged Securities that constitute uncertificated securities, the security interest created by this Agreement in such Pledged Securities that constitute uncertificated securities, will constitute a valid, perfected first priority (subject, in terms of priority only, to the priority of the Liens of the applicable Collateral Representative or any Additional Agent) security interest in such Pledged Securities constituting uncertificated securities to the extent provided in and governed by the Code, enforceable in accordance with its terms against all creditors of such U.S. Pledgor and any persons purporting to purchase such Pledged Securities from such U.S. Pledgor, to the extent provided in and governed by the Code, in each case subject to Liens permitted by subsection 8.2 of the ABL Credit Agreement (and any applicable Intercreditor Agreement) to attach to such Pledged Securities, and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
4.4 Representations and Warranties of Each U.S. Granting Party .
4.4.1 As of the Closing Date, Schedule 4B sets forth the full and exact legal name (as it appears in each respective certificate or articles of incorporation, limited liability company certificate of formation or similar organizational documents, in each case as amended to date), the type of organization, the jurisdiction of organization (or formation, as applicable), the organizational identification number, the federal tax identification number (or equivalent) and the chief executive office address and the preferred mailing address (if different than chief executive office) of each U.S. Granting Party.
SECTION 5 COVENANTS
5.1 Covenants of Each U.S. Guarantor . Each U.S. Guarantor covenants and agrees with the ABL Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of ( i ) the date upon which the Loans, any Reimbursement Obligations, and all other Obligations then due and owing, shall have been paid in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the
 
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Commitments shall have terminated, ( ii ) as to any U.S. Guarantor, a sale or other disposition of all the Capital Stock of such U.S. Guarantor (other than to the U.S. Borrowers or a U.S. Guarantor), or any other transaction or occurrence as a result of which such U.S. Guarantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the ABL Credit Agreement or ( iii ) as to any U.S. Guarantor, such U.S. Guarantor becoming an Excluded Subsidiary, such U.S. Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such U.S. Guarantor or any of its Restricted Subsidiaries.
5.2 Covenants of Each U.S. Grantor . Each U.S. Grantor (other than Holding) covenants and agrees with the ABL Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of ( i ) the date upon which the Loans, any Reimbursement Obligations, and all other Obligations then due and owing shall have been paid in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments shall have terminated, ( ii ) as to any U.S. Grantor, a sale or other disposition of all the Capital Stock of such U.S. Grantor (other than to the U.S. Borrowers or a U.S. Guarantor), or any other transaction or occurrence as a result of which such U.S. Grantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the ABL Credit Agreement or ( iii ) as to any U.S. Grantor, such U.S. Grantor becoming an Excluded Subsidiary:
5.2.1 Delivery of Instruments and Chattel Paper . If any amount payable under or in connection with any of such U.S. Grantor’s Collateral shall be or become evidenced by any Instrument or Chattel Paper, such U.S. Grantor shall (except as provided in the following sentence) be entitled to retain possession of all Collateral of such U.S. Grantor evidenced by any Instrument or Chattel Paper, and shall hold all such Collateral in trust for the ABL Collateral Agent, for the benefit of the Secured Parties. In the event that an Event of Default shall have occurred and be continuing, upon the request of the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, such Instrument or Chattel Paper shall be promptly delivered to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, duly indorsed in a manner reasonably satisfactory to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, to be held as Collateral pursuant to this Agreement. Such U.S. Grantor shall not permit any other Person to possess any such Collateral at any time other than in connection with any sale or other disposition of such Collateral in a transaction permitted by the ABL Credit Agreement or as contemplated by any applicable Intercreditor Agreements.
5.2.2 [ Reserved ].
5.2.3 Payment of Obligations . Such U.S. Grantor will pay and discharge or otherwise satisfy before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon such U.S. Grantor’s Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, material claims for labor, materials and supplies) against or with respect to such U.S. Grantor’s Collateral, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of such U.S. Grantor and except to the extent that failure to do so, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
 
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5.2.4 Maintenance of Perfected Security Interest; Further Documentation .
(a) Such U.S. Grantor shall maintain the security interest created by this Agreement in such U.S. Grantor’s Collateral as a perfected security interest as and to the extent described in subsection 4.2.2 and to defend the security interest created by this Agreement in such U.S. Grantor’s Collateral against the claims and demands of all Persons whomsoever (subject to the other provisions hereof).
(b) Such U.S. Grantor will furnish to the ABL Collateral Agent from time to time statements and schedules further identifying and describing such U.S. Grantor’s Collateral and such other reports in connection with such U.S. Grantor’s Collateral as the ABL Collateral Agent may reasonably request in writing, all in reasonable detail.
(c) At any time and from time to time, upon the written request of the ABL Collateral Agent, and at the sole expense of such U.S. Grantor, such U.S. Grantor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the ABL Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such U.S. Grantor, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial Code (or other similar laws) as in effect from time to time in any United States jurisdiction with respect to the security interests created hereby; provided that, notwithstanding any other provision of this Agreement or any other Loan Document, neither the Parent Borrower nor any U.S. Grantor will be required to ( i ) take any action in any jurisdiction other than the United States of America, or required by the laws of any such non-U.S. jurisdiction, or enter into any security agreement or pledge agreement governed by the laws of any such non-U.S. jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of the United States of America or to perfect any security interests (or other Liens) in any Collateral, ( ii ) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except ( A ) as required by subsection 4.16 of the ABL Credit Agreement and ( B ) in the case of Security Collateral that constitutes Capital Stock or Pledged Notes in certificated form, delivering such Capital Stock or Pledged Notes to the ABL Collateral Agent (or another Person as required under any applicable Intercreditor Agreement), ( iii ) take any action in order to perfect any security interests in any assets specifically requiring perfection through control (including cash, cash equivalents, deposit accounts or securities accounts) (except, in each case ( A ) as required by subsection 4.16 of the ABL Credit Agreement and ( B ) to the extent consisting of proceeds perfected by the filing of a financing statement under the Code or, in the case of Pledged Stock, by being held by the ABL Collateral Agent or an Additional Agent as agent for the ABL Collateral Agent), ( iv ) deliver landlord lien waivers, estoppels or collateral access letters or ( v ) file any fixture filing with respect to any security interest in Fixtures affixed to or attached to any real property constituting Excluded Assets.
(d) The ABL Collateral Agent may grant extensions of time for the creation and perfection of security interests in, or obtaining a delivery of documents or other deliverables with respect to, particular assets of any U.S. Grantor where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or any other Security Documents.
5.2.5 Changes in Name, Jurisdiction of Organization, etc . Such U.S. Grantor will give prompt written notice to the ABL Collateral Agent of any change in its name, legal form or
 
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jurisdiction of organization (whether by merger or otherwise) (and in any event, within 30 days of such change); provided that, promptly after receiving a written request therefor from the ABL Collateral Agent, such U.S. Grantor shall deliver to the ABL Collateral Agent all additional financing statements and other documents reasonably necessary or desirable to maintain the validity, perfection and priority of the security interests created hereunder and other documents reasonably requested by the ABL Collateral Agent to maintain the validity, perfection and priority of the security interests as and to the extent provided for herein and upon receipt of such additional financing statements the ABL Collateral Agent shall either promptly file such additional financing statements or approve the filing of such additional financing statements by such U.S. Grantor. Upon any such approval such U.S. Grantor shall proceed with the filing of the additional financing statements and deliver copies (or other evidence of filing) of the additional filed financing statements to the ABL Collateral Agent.
5.2.6 Notices . Such U.S. Grantor will advise the ABL Collateral Agent promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or permitted by the ABL Credit Agreement (including Liens permitted by subsection 8.2 of the ABL Credit Agreement)) on any of such U.S. Grantor’s Collateral which would materially adversely affect the ability of the ABL Collateral Agent to exercise any of its remedies hereunder; and
(b) the occurrence of any other event which would reasonably be expected to have a material adverse effect on the security interests created hereby.
5.2.7 Pledged Stock . In the case of each U.S. Grantor that is an Issuer, such Issuer agrees that ( i ) it will be bound by the terms of this Agreement relating to the Pledged Stock other than ULC Shares issued by it and will comply with such terms insofar as such terms are applicable to it, ( ii ) it will notify the ABL Collateral Agent promptly in writing of the occurrence of any of the events described in subsection 5.3.1 with respect to the Pledged Stock issued by it and ( iii ) the terms of subsections 6.3(c) and 6.7 shall apply to it, mutatis mutandis , with respect to all actions that may be required of it pursuant to subsection 6.3(c) or 6.7 with respect to the Pledged Stock other than ULC Shares issued by it.
5.2.8 Accounts Receivable .
(a) With respect to Accounts Receivable, such U.S. Grantor will not, other than in the ordinary course of business or as permitted by the Loan Documents, ( i ) grant any extension of the time of payment of any of such U.S. Grantor’s Accounts Receivable, ( ii ) compromise or settle any such Account Receivable for less than the full amount thereof, ( iii ) release, wholly or partially, any Person liable for the payment of any such Account Receivable, ( iv ) allow any credit or discount whatsoever on any such Account Receivable, ( v ) amend, supplement or modify any such Account Receivable unless such extensions, compromises, settlements, releases, credits, discounts, amendments, supplements or modifications would not reasonably be expected to materially adversely affect the value of the Accounts Receivable taken as a whole or ( vi ) evidence any Accounts Receivable by an Instrument as Chattel Paper.
(b) Such U.S. Grantor will deliver to the ABL Collateral Agent a copy of each material demand, notice or document received by it from any obligor under the Accounts Receivable that disputes the validity or enforceability of more than 7.5% of the aggregate amount of the then outstanding Accounts Receivable.
 
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5.2.9 Maintenance of Records . Such U.S. Grantor will keep and maintain at its own cost and expense reasonably satisfactory records of its Collateral, including, without limitation, a record of all payments received and all credits granted with respect to such Collateral, and shall mark such records to evidence this Agreement and the Liens and the security interests created hereby.
5.2.10 Acquisition of Intellectual Property . Concurrently with the delivery of the annual Compliance Certificate pursuant to subsection 7.2(a) of the ABL Credit Agreement, the Borrower Representative will notify the ABL Collateral Agent of any acquisition by the U.S. Grantor of ( i ) any registration of any material United States Copyright, Patent or Trademark or ( ii ) any exclusive rights under a material United States Copyright License, Patent License or Trademark License constituting Collateral, and each applicable U.S. Grantor shall take such actions as may be reasonably requested by the ABL Collateral Agent (but only to the extent such actions are within such U.S. Grantor’s control) to perfect the security interest granted to the ABL Collateral Agent and the other Secured Parties therein, to the extent provided herein in respect of any United States Copyright, Patent or Trademark constituting Collateral, by ( x ) the execution and delivery of an amendment or supplement to this Agreement (or amendments to any such agreement previously executed or delivered by such U.S. Grantor) and/or ( y ) the making of appropriate filings ( I ) of financing statements under the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction and/or ( II ) in the United States Patent and Trademark Office, or with respect to Copyrights and Copyright Licenses, the United States Copyright Office.
5.2.11 [ Reserved ].
5.2.12 Commercial Tort Actions . All Commercial Tort Actions of each U.S. Grantor in existence on the date of this Agreement, known to such U.S. Grantor on the date hereof, are described in Schedule 6 . If any U.S. Grantor shall at any time after the date of this Agreement acquire a Commercial Tort Action, such U.S. Grantor shall promptly notify the ABL Collateral Agent thereof in a writing signed by such U.S. Grantor and describing the details thereof and shall grant to the ABL Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon and subject to the terms of this Agreement.
5.2.13 Deposit Accounts; etc . Such U.S. Grantor shall take, or refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no breach of subsection 4.16 of the ABL Credit Agreement is caused by the failure to take such action or to refrain from taking such action by such U.S. Grantor or any of its Subsidiaries.
5.2.14 Protection of Trademarks . Such U.S. Grantor shall, with respect to any Trademarks that are material to the business of such U.S. Grantor, use commercially reasonable efforts not to cease the use of any of such Trademarks or fail to maintain the level of the quality of products sold and services rendered under any of such Trademarks at a level at least substantially consistent with the quality of such products and services as of the date hereof, and shall use commercially reasonable efforts to take all steps reasonably necessary to ensure that licensees of such Trademarks use such consistent standards of quality, in each case, except as would not reasonably be expected to have a Material Adverse Effect.
5.2.15 Protection of Intellectual Property . Subject to and except as permitted by the ABL Credit Agreement, such U.S. Grantor shall use commercially reasonable efforts not to do any act or omit to do any act whereby any of the Intellectual Property that is material to the business of such U.S. Grantor may lapse, expire, or become abandoned, or unenforceable, in each case, except as would not reasonably be expected to have a Material Adverse Effect.
 
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5.2.16 Assignment of Letter-of-Credit Rights . In the case of any Letter-of-Credit Rights of any U.S. Grantor not constituting Excluded Assets acquired following the Closing Date and constituting Security Collateral, such U.S. Grantor shall use its commercially reasonable efforts to promptly obtain the consent of the issuer thereof and any nominated person thereon to the assignment of the proceeds of the related letter of credit in accordance with Section 5-114(c) of the Code.
5.3 Covenants of Each U.S. Pledgor . Each U.S. Pledgor covenants and agrees with the ABL Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of ( i ) the Loans, any Reimbursement Obligations, and all other Obligations then due and owing shall have been paid in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash or backstopped pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments shall have terminated, ( ii ) as to any U.S. Pledgor, a sale or other disposition of all the Capital Stock of such U.S. Pledgor (other than to a U.S. Borrower or a U.S. Guarantor), or any other transaction or occurrence as a result of which such U.S. Pledgor ceases to be a Restricted Subsidiary of the Parent Borrower, in each that is permitted under the ABL Credit Agreement or ( iii ) as to any U.S. Pledgor, such U.S. Pledgor becoming an Excluded Subsidiary:
5.3.1 Additional Shares . If such U.S. Pledgor shall, as a result of its ownership of its Pledged Stock, become entitled to receive or shall receive any stock certificate (including, without limitation, any stock certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), stock option or similar rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such U.S. Pledgor shall accept the same as the agent of the ABL Collateral Agent and the other Secured Parties, hold the same in trust for the ABL Collateral Agent and the other Secured Parties and deliver the same forthwith to the ABL Collateral Agent (who will hold the same on behalf of the Secured Parties), the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, in the exact form received, duly indorsed by such U.S. Pledgor to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, if required, together with an undated stock power covering such certificate duly executed in blank by such U.S. Grantor, to be held by the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, subject to the terms hereof, as additional collateral security for the Obligations (subject to subsection 3.3 and provided that in no event shall there be pledged, nor shall any U.S. Pledgor be required to pledge, more than 65% of any series of outstanding Capital Stock (including for these purposes any investment deemed to be Capital Stock for United States tax purposes) of any Foreign Subsidiary pursuant to this Agreement). Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer (except any liquidation or dissolution of any Subsidiary of the Parent Borrower not prohibited by the ABL Credit Agreement) shall be paid over to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, to be held by the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, subject to the terms hereof as additional collateral security for the
 
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Obligations, and, except in the case of ULC Shares, in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the ABL Collateral Agent, be delivered to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, to be held by the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, subject to the terms hereof as additional collateral security for the Obligations, in each case except as otherwise provided by the applicable Intercreditor Agreement. If any sums of money or property so paid or distributed in respect of the Pledged Stock shall be received by such U.S. Pledgor, such U.S. Pledgor shall, until such money or property is paid or delivered to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, hold such money or property in trust for the Secured Parties, segregated from other funds of such U.S. Pledgor, as additional collateral security for the Obligations.
5.3.2 [Reserved] .
5.3.3 Pledged Notes . Such U.S. Pledgor shall, within 60 days (or such longer period as may be agreed by the ABL Collateral Agent in its sole discretion) following the date of this Agreement (or on such later date upon which it becomes a party hereto pursuant to subsection 9.15 ), deliver to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, all Pledged Notes then held by such U.S. Pledgor, endorsed in blank or, at the request of the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, endorsed to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement. Furthermore, within ten Business Days (or such longer period as may be agreed by the ABL Collateral Agent in its sole discretion) after any U.S. Pledgor obtains a Pledged Note, such U.S. Pledgor shall cause such Pledged Note to be delivered to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, endorsed in blank or, at the request of the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, endorsed to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement.
5.3.4 Maintenance of Security Interest .
(a) Such U.S. Pledgor shall maintain the security interest created by this Agreement in such U.S. Pledgor’s Pledged Collateral as a security interest having at least the perfection and priority described in subsection 4.3.4 or subsection 4.3.5 , as applicable and shall defend such security interest against the claims and demands of all Persons whomsoever. At any time and from time to time, upon the written request of the ABL Collateral Agent and at the sole expense of such U.S. Pledgor, such U.S. Pledgor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the ABL Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such U.S. Pledgor; provided , that notwithstanding
 
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any other provision of this Agreement or any other Loan Documents, neither the Parent Borrower nor any other U.S. Pledgor will be required to ( i ) take any action in any jurisdiction other than the United States of America, or required by the laws of any such non-U.S. jurisdiction, or enter into any security agreement or pledge agreement governed by the laws of any such non-U.S. jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of the United States of America or to perfect any security interests (or other Liens) in any Collateral, ( ii ) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except ( A ) as required by subsection 4.16 of the ABL Credit Agreement and ( B ) in the case of Security Collateral that constitutes Capital Stock or Pledged Notes in certificated form, delivering such Capital Stock or Pledged Notes to the ABL Collateral Agent (or another Person as required under any applicable Intercreditor Agreement), ( iii ) take any action in order to perfect any security interests in any assets specifically requiring perfection through control (including cash, cash equivalents, deposit accounts or securities accounts) constituting Excluded Assets (except, in each case, to the extent consisting of proceeds perfected by the filing of a financing statement under the Code or, in the case of Pledged Stock, by being held by the ABL Collateral Agent or an Additional Agent as agent for the ABL Collateral Agent), ( iv ) deliver landlord lien waivers, estoppels or collateral access letters or ( v ) file any fixture filing with respect to any security interest in Fixtures affixed to or attached to any real property constituting Excluded Assets.
(b) The ABL Collateral Agent may grant extensions of time for the creation and perfection of security interests in, or obtaining or delivery of documents or other deliverables with respect to, particular assets of any U.S. Pledgor where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or any other Security Documents.
SECTION 6 REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Accounts .
(a) At any time and from time to time after the occurrence and during the continuance of an Event of Default, the ABL Collateral Agent shall have the right to make test verifications of the Accounts Receivable constituting Collateral in any reasonable manner and through any reasonable medium that it reasonably considers advisable, and the relevant U.S. Grantor shall furnish all such assistance and information as the ABL Collateral Agent may reasonably require in connection with such test verifications. At any time and from time to time after the occurrence and during the continuance of an Event of Default, upon the ABL Collateral Agent’s reasonable request and at the expense of the relevant U.S. Grantor, such U.S. Grantor shall cause independent public accountants or others reasonably satisfactory to the ABL Collateral Agent to furnish to the ABL Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts Receivable constituting Collateral.
(b) The ABL Collateral Agent hereby authorizes each U.S. Grantor to collect such U.S. Grantor’s Accounts Receivable and the ABL Collateral Agent may curtail or terminate said authority at any time, without limiting the ABL Collateral Agent’s rights under subsection 4.16 of the ABL Credit Agreement, after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement. If required by the ABL Collateral Agent at any time, without limiting the ABL Collateral Agent’s rights under subsection 4.16 of the ABL Credit Agreement, after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement, any Proceeds constituting payments or other cash proceeds of Accounts Receivable
 
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constituting Collateral, when collected by such U.S. Grantor (other than Holding), ( i ) shall be forthwith (and, in any event, within two Business Days of receipt by such U.S. Grantor) deposited in, or otherwise transferred by such U.S. Grantor to, the Collateral Proceeds Account, subject to withdrawal by the ABL Collateral Agent for the account of the Secured Parties only as provided in subsection 6.5 , and ( ii ) until so turned over, shall be held by such U.S. Grantor in trust for the ABL Collateral Agent and the other Secured Parties, segregated from other funds of such U.S. Grantor. All Proceeds constituting collections or other cash proceeds of Accounts Receivable constituting Collateral while held by the Collateral Account Bank (or by any U.S. Grantor in trust for the benefit of the ABL Collateral Agent and the other Secured Parties) shall continue to be collateral security for all of the Obligations and shall not constitute payment thereof until applied as hereinafter provided. At any time when an Event of Default specified in subsection 9(a) of the ABL Credit Agreement has occurred and is continuing, at the ABL Collateral Agent’s election, each of the ABL Collateral Agent and the Administrative Agent may apply all or any part of the funds on deposit in the Collateral Proceeds Account established by the relevant U.S. Grantor to the payment of the Obligations of such U.S. Grantor then due and owing, such application to be made as set forth in subsection 6.5 . So long as no Event of Default has occurred and is continuing, the funds on deposit in the Collateral Proceeds Account shall be remitted as provided in subsection 6.1(d) .
(c) At any time and from time to time after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement, at the ABL Collateral Agent’s request, each U.S. Grantor (other than Holding) shall deliver to the ABL Collateral Agent copies or, if required by the ABL Collateral Agent for the enforcement thereof or foreclosure thereon, originals of all documents held by such U.S. Grantor evidencing, and relating to, the agreements and transactions which gave rise to such U.S. Grantor’s Accounts Receivable constituting Collateral, including, without limitation, all statements relating to such U.S. Grantor’s Accounts Receivable constituting Collateral and all orders, invoices and shipping receipts related thereto.
(d) So long as no Event of Default has occurred and is continuing, the ABL Collateral Agent shall instruct the Collateral Account Bank to promptly remit any funds on deposit in each U.S. Grantor’s (other than Holding) Collateral Proceeds Account to any account designated by such U.S. Grantor, maintained in compliance with the provisions of subsection 4.16 of the ABL Credit Agreement. In the event that an Event of Default has occurred and is continuing, the ABL Collateral Agent, at its option, may require that each Collateral Proceeds Account and the Concentration Account of each U.S. Grantor (other than Holding) be established at the ABL Collateral Agent or another institution reasonably acceptable to the ABL Collateral Agent. Subject to subsection 4.16 of the ABL Credit Agreement, each U.S. Grantor shall have the right, at any time and from time to time, to withdraw such of its own funds from its own Concentration Account, and to maintain such balances in its Concentration Account, as it shall deem to be necessary or desirable.
6.2 Communications with Obligors; U.S. Grantors Remain Liable .
(a) The ABL Collateral Agent, in its own name or in the name of others, may at any time and from time to time after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement communicate with obligors under the Accounts Receivable and parties to the Contracts (in each case, to the extent constituting Collateral) to verify with them to the ABL Collateral Agent’s satisfaction the existence, amount and terms of any Accounts Receivable or Contracts.
(b) Upon the request of the ABL Collateral Agent at any time after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement, each U.S. Grantor (other than Holding) shall notify obligors on such U.S. Grantor’s Accounts Receivable and
 
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parties to such U.S. Grantor’s Contracts (in each case, to the extent constituting Collateral) that such Accounts Receivable and such Contracts have been assigned to the ABL Collateral Agent, for the benefit of the Secured Parties, and that payments in respect thereof shall be made directly to the ABL Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each U.S. Grantor shall remain liable under each of such U.S. Grantor’s Accounts Receivable to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. None of the ABL Collateral Agent, the Administrative Agent or any other Secured Party shall have any obligation or liability under any Accounts Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the ABL Collateral Agent or any other Secured Party of any payment relating thereto, nor shall the ABL Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any U.S. Grantor under or pursuant to any Accounts Receivable (or any agreement giving rise thereto) to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Stock .
(a) Unless an Event of Default shall have occurred and be continuing and the ABL Collateral Agent shall have given notice to the relevant U.S. Pledgor of the ABL Collateral Agent’s intent to exercise its corresponding rights pursuant to subsection 6.3(b) , each U.S. Pledgor shall be permitted to receive all cash dividends and distributions paid in respect of the Pledged Stock (subject to the last two sentences of subsection 5.3.1 ) and all payments made in respect of the Pledged Notes, to the extent permitted in the ABL Credit Agreement, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided , however , that no vote shall be cast or corporate right exercised or such other action taken which is prohibited by, or would result in any violation of, any provision of the ABL Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the ABL Collateral Agent shall give written notice of its intent to exercise such rights to the relevant U.S. Pledgor or U.S. Pledgors, ( i ) the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, shall have the right, except in the case of ULC Shares, to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Obligations of the relevant U.S. Pledgor as provided in the ABL Credit Agreement consistent with subsection 6.5 , and ( ii ) except in the case of ULC Shares, any or all of the Pledged Stock shall be registered in the name of the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, or the respective nominee of any thereof, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, and the ABL Collateral Agent, the Collateral Representative or any Additional Agent, or acting through its respective nominee, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, may thereafter exercise ( x ) except in the case of ULC Shares, all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and ( y ) except in the case of ULC Shares, any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock other than ULC Shares upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by the relevant
 
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U.S. Pledgor or the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, of any right, privilege or option pertaining to such Pledged Stock other than ULC Shares, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock other than ULC Shares with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, may reasonably determine), all without liability (other than for its gross negligence or willful misconduct) except to account for property actually received by it, but the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, shall have no duty to any U.S. Pledgor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing, provided that the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, shall not exercise any voting or other consensual rights pertaining to the Pledged Stock in any way that would constitute an exercise of the remedies described in subsection 6.6 other than in accordance with subsection 6.6 .
(c) Each U.S. Pledgor hereby authorizes and instructs each Issuer or maker of any Pledged Securities pledged by such U.S. Pledgor hereunder other than ULC Shares to, subject to any applicable Intercreditor Agreement, ( i ) comply with any instruction received by it from the ABL Collateral Agent in writing with respect to Capital Stock in such Issuer that ( x ) states that an Event of Default has occurred and is continuing and ( y ) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such U.S. Pledgor, and each U.S. Pledgor agrees that each Issuer or maker shall be fully protected in so complying, and ( ii ) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Securities directly to the ABL Collateral Agent.
6.4 Proceeds to Be Turned Over to the ABL Collateral Agent . In addition to the rights of the ABL Collateral Agent specified in subsection 6.1 with respect to payments of Accounts Receivable constituting Collateral, if an Event of Default shall occur and be continuing, and the ABL Collateral Agent shall have instructed any U.S. Grantor to do so, all Proceeds of Security Collateral received by such U.S. Grantor consisting of cash, checks and other Cash Equivalent items shall be held by such U.S. Grantor in trust for the ABL Collateral Agent and the other Secured Parties hereto, any Additional Agent and the other applicable Additional Secured Parties (as defined in the applicable Intercreditor Agreement) or the applicable Collateral Representative, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, segregated from other funds of such U.S. Grantor, and shall, forthwith upon receipt by such U.S. Grantor, be turned over to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, (or their respective agents appointed for purposes of perfection) in the exact form received by such U.S. Grantor (duly indorsed by such U.S. Grantor to the ABL Collateral Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, if required). All Proceeds of Security Collateral received by the ABL Collateral Agent hereunder shall be held by the ABL Collateral Agent in the relevant Collateral Proceeds Account maintained under its sole dominion and control. All Proceeds of Security Collateral while held by the ABL Collateral Agent in such Collateral Proceeds Account (or by the relevant U.S. Grantor in trust for the ABL Collateral Agent and the other Secured Parties) shall continue to be held as collateral security for all the Obligations of such U.S. Grantor and shall not constitute payment thereof until applied as provided in subsection 6.5 and any applicable Intercreditor Agreement.
6.5 Application of Proceeds . It is agreed that if an Event of Default shall occur and be continuing, any and all Proceeds of the relevant U.S. Granting Party’s Security Collateral received by the ABL Collateral Agent (whether from the relevant U.S. Granting Party or otherwise) shall be held by the
 
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ABL Collateral Agent for the benefit of the Secured Parties as collateral security for the Obligations of the relevant U.S. Granting Party (whether matured or unmatured), and/or then or at any time thereafter may, in the sole discretion of the ABL Collateral Agent, subject to any applicable Intercreditor Agreement, be applied by the ABL Collateral Agent against the Obligations of the relevant U.S. Granting Party then due and owing in the order of priority set forth in the ABL Credit Agreement.
6.6 Code and Other Remedies . If an Event of Default shall occur and be continuing, subject to the terms of any applicable Intercreditor Agreement, the ABL Collateral Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations to the extent permitted by applicable law, all rights and remedies of a secured party under the Code and under any other applicable law and in equity. Subject to subsection 3.3(d) , without limiting the generality of the foregoing, to the extent permitted by applicable law, subject to the terms of any applicable Intercreditor Agreement, the ABL Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any U.S. Granting Party or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances, forthwith collect, receive, appropriate and realize upon the Security Collateral, or any part thereof, and/or may forthwith, subject to any existing reserved rights or licenses, sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Security Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the ABL Collateral Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. To the extent permitted by law, subject to the terms of any applicable Intercreditor Agreement, the ABL Collateral Agent or any other Secured Party shall have the right, upon any such sale or sales, to purchase the whole or any part of the Security Collateral so sold, free of any right or equity of redemption in such U.S. Granting Party, which right or equity is hereby waived and released. Each U.S. Granting Party further agrees, at the ABL Collateral Agent’s request (subject to the terms of any applicable Intercreditor Agreement), to assemble the Security Collateral and make it available to the ABL Collateral Agent at places which the ABL Collateral Agent shall reasonably select, whether at such U.S. Granting Party’s premises or elsewhere. The ABL Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 6.6 , after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Security Collateral or in any way relating to the Security Collateral or the rights of the ABL Collateral Agent and the other Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations of the relevant U.S. Granting Party then due and owing, in the order of priority specified in subsection 6.5 , and only after such application and after the payment by the ABL Collateral Agent of any other amount required by any provision of law, including, without limitation, Section 9-615(a)(3) of the Code, need the ABL Collateral Agent account for the surplus, if any, to such U.S. Granting Party. To the extent permitted by applicable law, ( i ) such U.S. Granting Party waives all claims, damages and demands it may acquire against the ABL Collateral Agent or any other Secured Party arising out of the repossession, retention or sale of the Security Collateral, other than any such claims, damages and demands that may arise from the gross negligence or willful misconduct of any of the ABL Collateral Agent or such other Secured Party, and ( ii ) if any notice of a proposed sale or other disposition of Security Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.
 
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6.7 Registration Rights .
(a) Subject to any applicable Intercreditor Agreement, if the ABL Collateral Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 6.6 , and if in the reasonable opinion of the ABL Collateral Agent it is necessary or reasonably advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant U.S. Pledgor will use its reasonable best efforts to cause the Issuer thereof to ( i ) execute and deliver, and use its reasonable best efforts to cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the reasonable opinion of the ABL Collateral Agent, necessary or advisable to register such Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, ( ii ) use its reasonable best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of not more than one year from the date of the first public offering of such Pledged Stock, or that portion thereof to be sold, and ( iii ) make all amendments thereto and/or to the related prospectus which, in the reasonable opinion of the ABL Collateral Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the SEC applicable thereto. Such U.S. Pledgor agrees to use its reasonable best efforts to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all states and the District of Columbia that the ABL Collateral Agent shall reasonably designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) that will satisfy the provisions of Section 11(a) of the Securities Act.
(b) Such U.S. Pledgor recognizes that the ABL Collateral Agent may be unable to effect a public sale of any or all such Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Such U.S. Pledgor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, to the extent permitted by applicable law, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The ABL Collateral Agent shall not be under any obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.
(c) Such U.S. Pledgor agrees to use its reasonable best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of such Pledged Stock pursuant to this subsection 6.7 valid and binding and in compliance with any and all other applicable Requirements of Law. Such U.S. Pledgor further agrees that a breach of any of the covenants contained in this subsection 6.7 will cause irreparable injury to the ABL Collateral Agent and the Lenders, that the ABL Collateral Agent and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 6.7 shall be specifically enforceable against such U.S. Pledgor, and to the extent permitted by applicable law, such U.S. Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants (except for a defense that no Event of Default has occurred or is continuing under the ABL Credit Agreement).
6.8 Waiver; Deficiency . Each U.S. Granting Party shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Security Collateral are insufficient to pay in full, the Loans, Reimbursement Obligations constituting Obligations of such U.S. Granting Party and, to the
 
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extent then due and owing, all other Obligations of such U.S. Granting Party and the reasonable fees and disbursements of any attorneys employed by the ABL Collateral Agent or any other Secured Party to collect such deficiency.
SECTION 7 THE ABL COLLATERAL AGENT
7.1 ABL Collateral Agent’s Appointment as Attorney-in-Fact, etc.
(a) Each U.S. Granting Party hereby irrevocably constitutes and appoints the ABL Collateral Agent and any authorized officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such U.S. Granting Party and in the name of such U.S. Granting Party or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be reasonably necessary or desirable to accomplish the purposes of this Agreement to the extent permitted by applicable law, provided that the ABL Collateral Agent agrees not to exercise such power except upon the occurrence and during the continuance of any Event of Default, and in accordance with and subject to each applicable Intercreditor Agreement. Without limiting the generality of the foregoing, at any time when an Event of Default has occurred and is continuing (in each case to the extent permitted by applicable law and subject to each applicable Intercreditor Agreement), ( x ) each U.S. Pledgor hereby gives the ABL Collateral Agent the power and right, on behalf of such U.S. Pledgor, without notice or assent by such U.S. Pledgor, to execute, in connection with any sale provided for in subsection 6.6 or 6.7 , any endorsements, assessments or other instruments of conveyance or transfer with respect to such U.S. Pledgor’s Pledged Collateral and ( y ) each U.S. Grantor hereby gives the ABL Collateral Agent the power and right, on behalf of such U.S. Grantor, without notice to or assent by such U.S. Grantor, to do any or all of the following:
(i) in the name of such U.S. Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Accounts Receivable of such U.S. Grantor that constitutes Collateral or with respect to any other Collateral of such U.S. Grantor and file any claim or take any other action or institute any proceeding in any court of law or equity or otherwise deemed appropriate by the ABL Collateral Agent for the purpose of collecting any and all such moneys due under any Accounts Receivable of such U.S. Grantor that constitutes Collateral or with respect to any other Collateral of such U.S. Grantor whenever payable;
(ii) in the case of any Copyright, Patent or Trademark constituting Collateral of such U.S. Grantor, execute and deliver any and all agreements, instruments, documents and papers as the ABL Collateral Agent may reasonably request to such U.S. Grantor to evidence the ABL Collateral Agent’s and the Lenders’ security interest in such Copyright, Patent or Trademark and the goodwill and general intangibles of such U.S. Grantor relating thereto or represented thereby, and such U.S. Grantor hereby consents to the non-exclusive royalty free use by the ABL Collateral Agent of any Copyright, Patent or Trademark owned by such U.S. Grantor included in the Collateral for the purposes of disposing of any Collateral;
(iii) pay or discharge taxes and Liens, other than Liens permitted under this Agreement or the other Loan Documents, levied or placed on the Security Collateral of such U.S. Grantor, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof; and
(iv) ( A ) direct any party liable for any payment under any of the Security Collateral of such U.S. Grantor to make payment of any and all moneys due or to become due thereunder
 
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directly to the ABL Collateral Agent or as the ABL Collateral Agent shall direct; ( B ) ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Security Collateral of such U.S. Grantor; ( C ) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Security Collateral of such U.S. Grantor; ( D ) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Security Collateral of such U.S. Grantor or any portion thereof and to enforce any other right in respect of any Security Collateral of such U.S. Grantor; ( E ) defend any suit, action or proceeding brought against such U.S. Grantor with respect to any Security Collateral of such U.S. Grantor; ( F ) settle, compromise or adjust any such suit, action or proceeding described in clause (E)  above and, in connection therewith, to give such discharges or releases as the ABL Collateral Agent may deem appropriate; ( G ) subject to any existing reserved rights or licenses, assign any Copyright, Patent or Trademark constituting Security Collateral of such U.S. Grantor (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), for such term or terms, on such conditions, and in such manner, as the ABL Collateral Agent shall in its sole discretion determine; and ( H ) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Security Collateral of such U.S. Grantor as fully and completely as though the ABL Collateral Agent were the absolute owner thereof for all purposes, and do, at the ABL Collateral Agent’s option and such U.S. Grantor’s expense, at any time, or from time to time, all acts and things which the ABL Collateral Agent deems necessary to protect, preserve or realize upon the Security Collateral of such U.S. Grantor and the ABL Collateral Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such U.S. Grantor might do.
(b) The reasonable expenses of the ABL Collateral Agent incurred in connection with actions undertaken as provided in this subsection 7.1 , together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due ABR Loans that are U.S. Facility Revolving Credit Loans or Canadian Facility Revolving Credit Loans made to a U.S. Borrower under the ABL Credit Agreement, from the date of payment by the ABL Collateral Agent to the date reimbursed by the relevant U.S. Granting Party, shall be payable by such U.S. Granting Party to the ABL Collateral Agent on demand.
(c) Each U.S. Granting Party hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable as to the relevant U.S. Granting Party until the earliest to occur of ( i ) the first date on which all the Loans and all other Borrower Obligations then due and owing, are paid in full in cash, no Letters of Credit remain outstanding (except for Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender), ( ii ) as to any U.S. Grantor, a sale or other disposition of all of the Capital Stock of such U.S. Grantor (other than to a U.S. Borrower or a U.S. Guarantor), or any other transaction or occurrence as a result of which such U.S. Grantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case, that is permitted under the ABL Credit Agreement and ( iii ) as to any U.S. Grantor, such U.S. Grantor becoming an Excluded Subsidiary.
7.2 Duty of ABL Collateral Agent . The ABL Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Security Collateral in its possession, under Section 9-207 of the Code or otherwise, shall be to deal with it in the same manner as the ABL Collateral Agent deals with similar property for its own account. None of the ABL Collateral Agent or any other Secured
 
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Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Security Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Security Collateral upon the request of any U.S. Granting Party or any other Person or, except as otherwise provided herein, to take any other action whatsoever with regard to the Security Collateral or any part thereof. The powers conferred on the ABL Collateral Agent and the other Secured Parties hereunder are solely to protect the ABL Collateral Agent’s and the other Secured Parties’ interests in the Security Collateral and shall not impose any duty upon the ABL Collateral Agent or any other Secured Party to exercise any such powers. The ABL Collateral Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and to the maximum extent permitted by applicable law, neither they nor any of their officers, directors, employees or agents shall be responsible to any U.S. Granting Party for any act or failure to act hereunder, except as otherwise provided herein or for their own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
7.3 Financing Statements . Pursuant to any applicable law, each U.S. Granting Party authorizes the ABL Collateral Agent to file or record financing statements and other filing or recording documents or instruments with respect to such U.S. Granting Party’s Security Collateral without the signature of such U.S. Granting Party in such form and in such filing offices as the ABL Collateral Agent reasonably determines appropriate to perfect the security interests of the ABL Collateral Agent under this Agreement. Each U.S. Granting Party authorizes the ABL Collateral Agent to use any collateral description reasonably determined by the ABL Collateral Agent, including, without limitation, the collateral description “all personal property now existing or hereafter acquired” or “all assets now existing or hereafter acquired” or words of similar meaning in any such financing statements, provided that any collateral description in any financing statement or other filing or recording document or instrument with respect to Holding and/or Holding’s Pledged Collateral shall be limited to an accurate and precise description of Holding’s Pledged Collateral. The ABL Collateral Agent agrees to use its commercially reasonable efforts to notify the relevant U.S. Granting Party of any financing or continuation statement filed by it, provided that any failure to give such notice shall not affect the validity or effectiveness of any such filing.
7.4 Authority of ABL Collateral Agent . Each U.S. Granting Party acknowledges that the rights and responsibilities of the ABL Collateral Agent under this Agreement with respect to any action taken by the ABL Collateral Agent or the exercise or non-exercise by the ABL Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement or any amendment, supplement or other modification of this Agreement shall, as between the ABL Collateral Agent and the Secured Parties, be governed by the ABL Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the ABL Collateral Agent and the U.S. Granting Parties, the ABL Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no U.S. Granting Party shall be under any obligation, or entitlement, to make any inquiry respecting such authority.
7.5 Right of Inspection . Upon reasonable written advance notice to any U.S. Grantor and as often as may reasonably be desired, or at any time and from time to time after the occurrence and during the continuation of an Event of Default, the ABL Collateral Agent shall have reasonable access during normal business hours to all the books, correspondence and records of such U.S. Grantor (other than Holding), and the ABL Collateral Agent and its representatives may examine the same, and to the extent reasonable take extracts therefrom and make photocopies thereof, and such U.S. Grantor agrees to render to the ABL Collateral Agent at such U.S. Grantor’s reasonable cost and expense, such clerical and other
 
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assistance as may be reasonably requested with regard thereto. The ABL Collateral Agent and its representatives shall also have the right, upon reasonable advance written notice to such U.S. Grantor subject to any lease restrictions, to enter during normal business hours into and upon any premises owned, leased or operated by such U.S. Grantor where any of such U.S. Grantor’s Inventory or Equipment is located for the purpose of inspecting the same, observing its use or otherwise protecting its interests therein to the extent not inconsistent with the provisions of the ABL Credit Agreement and the other Loan Documents (and subject to each applicable Intercreditor Agreement).
SECTION 8 NON-LENDER SECURED PARTIES
8.1 Rights to Collateral .
(a) The Non-Lender Secured Parties shall not have any right whatsoever to do any of the following: ( i ) exercise any rights or remedies with respect to the Collateral (such term, as used in this Section 8 , having the meaning assigned to it in the ABL Credit Agreement), or to direct the ABL Collateral Agent to do the same, including, without limitation, the right to ( A ) enforce any Liens or sell or otherwise foreclose on any portion of the Collateral, ( B ) request any action, institute any proceedings, exercise any voting rights, give any instructions, make any election, notify account debtors or make collections with respect to all or any portion of the Collateral or ( C ) release any U.S. Granting Party under this Agreement or release any Collateral from the Liens of any Security Document or consent to or otherwise approve any such release; ( ii ) demand, accept or obtain any Lien on any Collateral (except for Liens arising under, and subject to the terms of, this Agreement); ( iii ) vote in any Bankruptcy Case or similar proceeding in respect of Holding or any of its Subsidiaries (any such proceeding, for purposes of this clause (a), a “ Bankruptcy ”) with respect to, or take any other actions concerning the Collateral; ( iv ) receive any proceeds from any sale, transfer or other disposition of any of the Collateral (except in accordance with this Agreement); ( v ) oppose any sale, transfer or other disposition of the Collateral; ( vi ) object to any debtor-in-possession financing in any Bankruptcy which is provided by one or more Lenders among others (including on a priming basis under Section 364(d) of the Bankruptcy Code); ( vii ) object to the use of cash collateral in respect of the Collateral in any Bankruptcy; or ( viii ) seek, or object to the Lenders or Agents seeking on an equal and ratable basis, any adequate protection or relief from the automatic stay with respect to the Collateral in any Bankruptcy.
(b) Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, agrees that in exercising rights and remedies with respect to the Collateral, the ABL Collateral Agent and the Lenders, with the consent of the ABL Collateral Agent, may enforce the provisions of the Security Documents and exercise remedies thereunder and under any other Loan Documents (or refrain from enforcing rights and exercising remedies), all in such order and in such manner as they may determine in the exercise of their sole business judgment. Such exercise and enforcement shall include, without limitation, the rights to collect, sell, dispose of or otherwise realize upon all or any part of the Collateral, to incur expenses in connection with such collection, sale, disposition or other realization and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code as in effect from time to time in any applicable jurisdiction. The Non-Lender Secured Parties by their acceptance of the benefits of this Agreement and the other Security Documents hereby agree not to contest or otherwise challenge any such collection, sale, disposition or other realization of or upon all or any of the Collateral. Whether or not a Bankruptcy Case has been commenced, the Non-Lender Secured Parties shall be deemed to have consented to any sale or other disposition of any property, business or assets of Holding or any of its Subsidiaries and the release of any or all of the Collateral from the Liens of any Security Document in connection therewith.
 
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(c) Notwithstanding any provision of this subsection 8.1 , the Non-Lender Secured Parties shall be entitled subject to each applicable Intercreditor Agreement to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleadings ( A ) in order to prevent any Person from seeking to foreclose on the Collateral or supersede the Non-Lender Secured Parties’ claim thereto or ( B ) in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Non-Lender Secured Parties. Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement, agrees to be bound by and to comply with each applicable Intercreditor Agreement and authorizes the ABL Collateral Agent to enter into each Intercreditor Agreement on its behalf.
(d) Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement, agrees that the ABL Collateral Agent and the Lenders may deal with the Collateral, including any exchange, taking or release of Collateral, may change or increase the amount of the Borrower Obligations and/or the Guarantor Obligations, and may release any U.S. Granting Party from its Obligations hereunder, all without any liability or obligation (except as may be otherwise expressly provided herein) to the Non-Lender Secured Parties.
8.2 Appointment of Agent . Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, shall be deemed irrevocably to make, constitute and appoint the ABL Collateral Agent, as agent under the ABL Credit Agreement (and all officers, employees or agents designated by the ABL Collateral Agent) as such Person’s true and lawful agent and attorney-in-fact, and in such capacity, the ABL Collateral Agent shall have the right, with power of substitution for the Non-Lender Secured Parties and in each such Person’s name or otherwise, to effectuate any sale, transfer or other disposition of the Collateral. It is understood and agreed that the appointment of the ABL Collateral Agent as the agent and attorney-in-fact of the Non-Lender Secured Parties for the purposes set forth herein is coupled with an interest and is irrevocable. It is understood and agreed that the ABL Collateral Agent has appointed the Administrative Agent as its agent for purposes of perfecting certain of the security interests created hereunder and for otherwise carrying out certain of its obligations hereunder.
8.3 Waiver of Claims . To the maximum extent permitted by law, each Non-Lender Secured Party waives any claim it might have against the ABL Collateral Agent or the Lenders with respect to, or arising out of, any action or failure to act or any error of judgment, negligence, or mistake or oversight whatsoever on the part of the ABL Collateral Agent or the Lenders or their respective directors, officers, employees or agents with respect to any exercise of rights or remedies under the Loan Documents or any transaction relating to the Collateral (including, without limitation, any such exercise described in subsection 8.1(b) ), except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person. To the maximum extent permitted by applicable law, none of the ABL Collateral Agent or any Lender or any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Holding, any Subsidiary of Holding, any Non-Lender Secured Party or any other Person or to take any other action or forbear from doing so whatsoever with regard to the Collateral or any part thereof, except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person.
8.4 Designation of Non-Lender Secured Parties . The Parent Borrower may from time to time designate a Person as a “Bank Products Affiliate” or a “Hedging Affiliate” hereunder by written notice to the ABL Collateral Agent in accordance with the terms of the ABL Credit Agreement. Upon being so designated by the Parent Borrower, such Bank Products Affiliate or Hedging Affiliate (as the case may be) shall be a Non-Lender Secured Party for the purposes of this Agreement for as long as so
 
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designated by the Parent Borrower; provided that, at the time of the Parent Borrower’s designation of such Non-Lender Secured Party, the obligations of the relevant U.S. Granting Party under the applicable Hedging Agreement or Bank Products Agreement (as the case may be) have not been designated as Additional Obligations.
SECTION 9 MISCELLANEOUS
9.1 Amendments in Writing . None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by each affected U.S. Granting Party and the ABL Collateral Agent, provided that ( a ) any provision of this Agreement imposing obligations on any U.S. Granting Party may be waived by the ABL Collateral Agent in a written instrument executed by the ABL Collateral Agent and ( b ) if separately agreed in writing between the Parent Borrower and any Non-Lender Secured Party (and such Non-Lender Secured Party has been designated in writing by the Parent Borrower to the ABL Collateral Agent for purposes of this sentence, for so long as so designated), no such waiver and no such amendment or modification shall amend, modify or waive subsection 6.5 (or the definition of “Non-Lender Secured Party” or “Secured Party” to the extent relating thereto) if such waiver, amendment, supplement or modification would directly and adversely affect a Non-Lender Secured Party without the written consent of such affected Non-Lender Secured Party. For the avoidance of doubt, it is understood and agreed that any amendment, amendment and restatement, waiver, supplement or other modification of or to any Intercreditor Agreement that would have the effect, directly or indirectly, through any reference herein to any Intercreditor Agreement or otherwise, of waiving, amending, supplementing or otherwise modifying this Agreement, or any term or provision hereof, or any right or obligation of any U.S. Granting Party hereunder or in respect hereof, shall not be given such effect except pursuant to a written instrument executed by each affected U.S. Granting Party and the ABL Collateral Agent in accordance with this subsection 9.1 .
9.2 Notices . All notices, requests and demands to or upon the ABL Collateral Agent or any U.S. Granting Party hereunder shall be effected in the manner provided for in subsection 11.2 of the ABL Credit Agreement; provided that any such notice, request or demand to or upon any U.S. Guarantor shall be addressed to such U.S. Guarantor at its notice address set forth on Schedule 1 , unless and until such U.S. Guarantor shall change such address by notice to the ABL Collateral Agent and the Administrative Agent given in accordance with subsection 11.2 of the ABL Credit Agreement.
9.3 No Waiver by Course of Conduct; Cumulative Remedies . None of the ABL Collateral Agent or any other Secured Party shall by any act (except by a written instrument pursuant to subsection 9.1 ), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the ABL Collateral Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the ABL Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the ABL Collateral Agent or such other Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
 
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9.4 Enforcement Expenses; Indemnification .
(a) Each U.S. Guarantor jointly and severally agrees to pay or reimburse each Secured Party and the ABL Collateral Agent for all their respective reasonable costs and expenses incurred in collecting against such U.S. Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement against such U.S. Guarantor and the other Loan Documents to which such U.S. Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Secured Parties, the ABL Collateral Agent and the Administrative Agent.
(b) Each U.S. Grantor jointly and severally agrees to pay, and to save the ABL Collateral Agent, the Administrative Agent and the other Secured Parties harmless from, ( x ) any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other similar taxes which may be payable or determined to be payable with respect to any of the Security Collateral or in connection with any of the transactions contemplated by this Agreement and ( y ) any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement (collectively, the “ indemnified liabilities ”), in each case to the extent the Parent Borrower would be required to do so pursuant to subsection 11.5 of the ABL Credit Agreement, and in any event excluding any taxes or other indemnified liabilities arising from gross negligence, bad faith or willful misconduct of the ABL Collateral Agent, the Administrative Agent or any other Secured Party as determined by a court of competent jurisdiction in a final and nonappealable decision.
(c) The agreements in this subsection 9.4 shall survive repayment of the Obligations and all other amounts payable under the ABL Credit Agreement and the other Loan Documents.
9.5 Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the U.S. Granting Parties, the ABL Collateral Agent and the Secured Parties and their respective successors and assigns; provided that no Granting Party may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the ABL Collateral Agent, except as permitted hereby or by the ABL Credit Agreement.
9.6 Set-Off . Each U.S. Guarantor hereby irrevocably authorizes each of the Administrative Agent and the ABL Collateral Agent and each other Secured Party at any time and from time to time without notice to such U.S. Guarantor or any other U.S. Granting Party, any such notice being expressly waived by each U.S. Granting Party, to the extent permitted by applicable law, upon the occurrence and during the continuance of an Event of Default under subsection 9(a) of the ABL Credit Agreement so long as any amount remains unpaid after it becomes due and payable by such U.S. Guarantor hereunder, to set-off and appropriate and apply against any such amount any and all deposits (general or special, time or demand, provisional or final) (other than the Collateral Proceeds Account), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the ABL Collateral Agent, the Administrative Agent or such other Secured Party to or for the credit or the account of such U.S. Guarantor, or any part thereof in such amounts as the ABL Collateral Agent, the Administrative Agent or such other Secured Party may elect. The ABL Collateral Agent, the Administrative Agent and each other Secured Party shall notify such U.S. Guarantor promptly of any such set-off and the application made by the ABL Collateral Agent, the Administrative Agent or such other Secured Party of the proceeds thereof; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the ABL Collateral Agent, the Administrative Agent and each other Secured Party under this subsection 9.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the ABL Collateral Agent, the Administrative Agent or such other Secured Party may have.
 
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9.7 Counterparts . This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
9.8 Severability . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction; provided that, with respect to any Pledged Stock issued by a Foreign Subsidiary, all rights, powers and remedies provided in this Agreement may be exercised only to the extent that they do not violate any provision of any law, rule or regulation of any Governmental Authority applicable to any such Pledged Stock or affecting the legality, validity or enforceability of any of the provisions of this Agreement against the U.S. Pledgor (such laws, rules or regulations, “ Applicable Law ”) and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any Applicable Law.
9.9 Section Headings . The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
9.10 Integration . This Agreement and the other Loan Documents represent the entire agreement of the U.S. Granting Parties, the ABL Collateral Agent and the other Secured Parties with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the U.S. Granting Parties, the ABL Collateral Agent or any other Secured Party relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
9.12 Submission to Jurisdiction; Waivers . Each party hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party to the exclusive general jurisdiction of the Supreme Court of the State of New York for the County of New York (the “ New York Supreme Court ”), and the United States District Court for the Southern District of New York (the “ Federal District Court ” and together with the New York Supreme Court, the “ New York Courts ”) and appellate courts from either of them; provided that nothing in this Agreement shall be deemed or operate to preclude ( i ) the ABL Collateral Agent from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations (in which case any party shall be entitled to assert any claim or defense, including any claim or defense that this subsection 9.12 would otherwise require to be
 
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asserted in a legal action or proceeding in a New York Court), or to enforce a judgment or other court order in favor of the Administrative Agent or the ABL Collateral Agent, ( ii ) any party from bringing any legal action or proceeding in any jurisdiction for the recognition and enforcement of any judgment, ( iii ) if all such New York Courts decline jurisdiction over any Person, or decline (or in the case of the Federal District Court, lack) jurisdiction over any subject matter of such action or proceeding, a legal action or proceeding may be brought with respect thereto in another court having jurisdiction and ( iv ) in the event a legal action or proceeding is brought against any party hereto or involving any of its assets or property in another court (without any collusive assistance by such party or any of its Subsidiaries or Affiliates), such party from asserting a claim or defense (including any claim or defense that this subsection 9.12(a) would otherwise require to be asserted in a legal proceeding in a New York Court) in any such action or proceeding;
(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to any party at its address referred to in subsection 9.2 or at such other address of which the ABL Collateral Agent and the Administrative Agent (in the case of any other party hereto) and the Parent Borrower (in the case of the ABL Collateral Agent and the Administrative Agent) shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or (subject to clause (a)  above) shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection 9.12 any consequential or punitive damages.
9.13 Acknowledgments . Each U.S. Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;
(b) none of the ABL Collateral Agent, the Administrative Agent or any other Secured Party has any fiduciary relationship with or duty to any U.S. Guarantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the U.S. Guarantors, on the one hand, and the ABL Collateral Agent, the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the U.S. Guarantors and the Secured Parties.
9.14 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
 
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9.15 Additional U.S. Granting Parties . Each new Subsidiary of the Parent Borrower that is required to become a party to this Agreement pursuant to subsection 7.9(b) or 7.9(c) of the ABL Credit Agreement shall become a U.S. Granting Party for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement substantially in the form of Annex 2 hereto. Each existing U.S. Granting Party that is required to become a U.S. Pledgor with respect to Capital Stock of any new Subsidiary of the Parent Borrower pursuant to subsections 7.9(b) and 7.9(c) of the ABL Credit Agreement shall become a U.S. Pledgor with respect thereto upon execution and delivery by such U.S. Granting Party of a Supplemental Agreement substantially in the form of Annex 3 hereto.
9.16 Releases .
(a) At such time as the Loans, the Reimbursement Obligations and the other Obligations (other than any Obligations owing to a Non-Lender Secured Party) then due and owing shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender), all Security Collateral shall be automatically released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the ABL Collateral Agent and each U.S. Granting Party hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Security Collateral shall revert to the U.S. Granting Parties. At the request and sole expense of any U.S. Granting Party following any such termination, the ABL Collateral Agent shall deliver to such U.S. Granting Party (subject to subsection 7.2 , without recourse and without representation or warranty) any Security Collateral held by the ABL Collateral Agent hereunder, and execute, acknowledge and deliver to such U.S. Granting Party such releases, instruments or other documents (including, without limitation, UCC termination statements), and do or cause to be done all other acts, as any U.S. Granting Party shall reasonably request to evidence such termination.
(b) Upon any sale or other disposition of Security Collateral permitted by the ABL Credit Agreement (other than any sale or disposition to another U.S. Grantor), the Lien pursuant to this Agreement on such sold or disposed of Security Collateral shall be automatically released. In connection with a sale or other disposition of all of the Capital Stock of any U.S. Granting Party (other than to any U.S. Grantor (other than Holding) or any other transaction or occurrence as a result of which such U.S. Granting Party ceases to be a Restricted Subsidiary of the Parent Borrower), or the sale or other disposition of Security Collateral (other than a sale or disposition to another U.S. Grantor (other than Holding)) permitted under the ABL Credit Agreement, the ABL Collateral Agent shall, upon receipt from the Parent Borrower of a written request for the release of such U.S. Granting Party from its Guarantee or the release of the Security Collateral subject to such sale, disposition or other transaction, identifying such U.S. Granting Party or the relevant Security Collateral and the terms of the sale, disposition or other transaction in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by the Parent Borrower stating that such transaction is in compliance with the ABL Credit Agreement and the other Loan Documents, execute and deliver to the Parent Borrower or the relevant U.S. Granting Party (subject to subsection 7.2 , without recourse and without representation or warranty), at the sole cost and expense of such U.S. Granting Party, any Security Collateral of such relevant U.S. Granting Party held by the ABL Collateral Agent, or the Security Collateral subject to such sale or disposition (as applicable), and, at the sole cost and expense of such U.S. Granting Party, execute, acknowledge and deliver to such U.S. Granting Party such releases, instruments or other documents (including, without limitation, UCC termination statements), and do or cause to be done all other acts, as
 
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the Parent Borrower or such U.S. Granting Party shall reasonably request ( x ) to evidence or effect the release of such U.S. Granting Party from its Guarantee (if any) and of the Liens created hereby (if any) on such U.S. Granting Party’s Security Collateral or ( y ) to evidence the release of the Security Collateral subject to such sale or disposition.
(c) Upon any U.S. Granting Party becoming an Excluded Subsidiary in accordance with the provisions of the ABL Credit Agreement, the Lien pursuant to this Agreement on all Security Collateral of such U.S. Granting Party (if any) shall be automatically released, and the Guarantee (if any) of such U.S. Granting Party, and all obligations of such U.S. Granting Party hereunder, shall terminate, all without delivery of any instrument or performance of any act by any party, and the ABL Collateral Agent shall, upon the request of the Parent Borrower or such U.S. Granting Party, deliver to the Parent Borrower or such U.S. Granting Party (subject to subsection 7.2 , without recourse and without representation or warranty) any Security Collateral of such U.S. Granting Party held by the ABL Collateral Agent hereunder and the ABL Collateral Agent and the Administrative Agent shall execute, acknowledge and deliver to the Parent Borrower or such U.S. Granting Party (at the sole cost and expense of the Parent Borrower or such U.S. Granting Party) all releases, instruments or other documents (including, without limitation, UCC termination statements), and do or cause to be done all other acts, necessary or reasonably desirable for the release of such U.S. Granting Party from its Guarantee (if any) or the Liens created hereby (if any) on such U.S. Granting Party’s Security Collateral, as applicable, as the Parent Borrower or such U.S. Granting Party may reasonably request.
(d) Upon any Security Collateral being or becoming an Excluded Asset, the Lien pursuant to this Agreement on such Security Collateral shall be automatically released. At the request and sole expense of any U.S. Granting Party, the ABL Collateral Agent shall deliver such Security Collateral (if held by the ABL Collateral Agent) to such U.S. Granting Party and execute, acknowledge and deliver to such U.S. Granting Party such releases, instruments or other documents (including, without limitation, UCC termination statements), and do or cause to be done all other acts, as such U.S. Granting Party shall reasonably request to evidence such release.
(e) Notwithstanding any other provision of this Agreement or any other Loan Document, Holding shall have the right to transfer all of the Capital Stock of the Parent Borrower held by Holding to any Parent Entity or any Subsidiary of any Parent Entity (a “ Successor Holding Company ”) that (i) is a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and (ii) assumes all of the obligations of Holding under this Agreement and the other Loan Documents to which Holding is a party (including, for the avoidance of doubt, the requirement to deliver the Pledged Stock of the Parent Borrower in accordance with the terms of this Agreement) by executing and delivering to the ABL Collateral Agent a joinder substantially in the form of Annex 4 hereto, or one or more other documents or instruments, together with the organizational documents of such Successor Holding Company and authorizing resolutions, in addition to a financing statement in appropriate form for filing under the Uniform Commercial Code of the relevant jurisdiction, in form and substance reasonably satisfactory to the ABL Collateral Agent, upon which (x) such Successor Holding Company will succeed to, and be substituted for, and may exercise every right and power of, Holding under this Agreement and the other Loan Documents, and shall be thereafter be deemed to be “Holding” for purposes of this Agreement and the other Loan Documents, (y) Holding as predecessor to the Successor Holding Company (“ Predecessor Holding ”) shall be irrevocably and unconditionally released from its Guarantee and all other obligations hereunder and under the other Loan Documents, and (z) the Lien pursuant to this Agreement on all Security Collateral of Predecessor Holding, and any Lien pursuant to any other Loan Document on any other property or assets of Predecessor Holding, shall be automatically released (it being understood that such transfer of Capital Stock of the Parent Borrower to and assumption of rights and obligations of Holding by such Successor Holding Company shall not
 
-46-

constitute a Change of Control). At the request and the sole expense of Predecessor Holding or the Parent Borrower, the ABL Collateral Agent shall deliver to Predecessor Holding any Security Collateral and other property or assets of Predecessor Holding held by the ABL Collateral Agent that is not required to be pledged under this Agreement or any other Loan Document by Successor Holding Company (including the Capital Stock of the Parent Borrower) and execute, acknowledge and deliver to Predecessor Holding (subject to subsection 7.2 , without recourse and without representation or warranty) such releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, as Predecessor Holding or the Parent Borrower shall reasonably request to evidence or effect the release of Predecessor Holding from its Guarantee and other obligations hereunder and under the other Loan Documents, and the release of the Liens created hereby on Predecessor Holding’s Security Collateral (other than the Capital Stock of the Borrowers) and by any other Loan Document on any other property or assets of Predecessor Holding.
(f) The ABL Collateral Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Security Collateral by it in accordance with (or which the ABL Collateral Agent in good faith believes to be in accordance with) this subsection 9.16 .
9.17 Judgment .
(a) If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in one currency into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the ABL Collateral Agent could purchase the first currency with such other currency on the Business Day preceding the day on which final judgment is given.
(b) The obligations of any U.S. Guarantor in respect of this Agreement to the ABL Collateral Agent, for the benefit of each holder of Secured Obligations, shall, notwithstanding any judgment in a currency (the “ judgment currency ”) other than the currency in which the sum originally due to such holder is denominated (the “ original currency ”), be discharged only to the extent that on the Business Day following receipt by the ABL Collateral Agent of any sum adjudged to be so due in the judgment currency, the ABL Collateral Agent may in accordance with normal banking procedures purchase the original currency with the judgment currency; if the amount of the original currency so purchased is less than the sum originally due to such holder in the original currency, such U.S. Guarantor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the ABL Collateral Agent, for the benefit of such holder, against such loss, and if the amount of the original currency so purchased exceeds the sum originally due to the ABL Collateral Agent, the ABL Collateral Agent agrees to remit to the Parent Borrower, such excess. This covenant shall survive the termination of this Agreement and payment of the Obligations and all other amounts payable hereunder.
9.18 Transfer Tax Acknowledgment . Each party hereto acknowledges that the shares delivered hereunder are being transferred to and deposited with the ABL Collateral Agent (or other Person in accordance with any applicable Intercreditor Agreement) as collateral security for the Obligations and that this subsection 9.18 is intended to be the certificate of exemption from New York stock transfer taxes for the purposes of complying with Section 270.5(b) of the Tax Law of the State of New York.
[Remainder of page left blank intentionally; signature pages follow.]
 
-47-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the date first written above.

VERITIV CORPORATION	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
XPEDX INTERMEDIATE, LLC	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
XPEDX, LLC	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[Other U.S. Granting Parties]	
		
By:	 	 	
	 	Name:	
	 	Title:	
[Signature Pages to U.S. Guarantee and Collateral Agreement]

			
Acknowledged and Agreed to as ofthe date hereof by:	
	
BANK OF AMERICA, N.A.,
as Administrative Agent and ABL Collateral Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
[Signature Pages to U.S. Guarantee and Collateral Agreement]

Schedule 1
Notice Addresses of U.S. Granting Parties
A. xpedx
Veritiv Corporation (f/k/a xpedx Holding Company)
[6400 Poplar Avenue
Memphis, TN 38197]
xpedx, LLC
[6400 Poplar Avenue
Memphis, TN 38197]
xpedx International, Inc.
[6400 Poplar Avenue
Memphis, TN 38197]
xpedx Intermediate, LLC
[6400 Poplar Avenue
Memphis, TN 38197]
B. Unisource
Unisource Worldwide, Inc.
6600 Governors Lake Pkwy
Norcross, GA 30071
Unisource International Holdings, Inc.
6600 Governors Lake Pkwy
Norcross, GA 30071
Graphic Communications Holdings, Inc.
6600 Governors Lake Pkwy
Norcross, GA 30071
Paper Corporation of North America
6600 Governors Lake Pkwy
Norcross, GA 30071
Alco Realty, Inc.
6600 Governors Lake Pkwy
Norcross, GA 30071
 
3

Unisource Realty, Inc.
6600 Governors Lake Pkwy
Norcross, GA 30071
Unisource International Holdings Poland, Inc.
6600 Governors Lake Pkwy
Norcross, GA 30071
Graph Comm Holdings International, Inc.
6600 Governors Lake Pkwy
Norcross, GA 30071
Unisource International China, Inc.
6600 Governors Lake Pkwy
Norcross, GA 30071
 
4

Schedule 2
Pledged Securities
Pledged Stock
A. xpedx

Pledged Entity	  	Pledgor	  	Percentage
Ownership
Interest Pledged	 	 	Stock
Certificate
Number	 	
xpedx Intermediate, LLC	  	Veritiv Corporation (f/k/a xpedx Holding Company)	  	 	100	% 	 	 	[ —	] 	
xpedx, LLC	  	xpedx Intermediate, LLC	  	 	100	% 	 	 	[ —	] 	
xpedx International, Inc.	  	xpedx, LLC	  	 	100	% 	 	 	[ —	] 	
xpedx Holdings S.A.R.L.	  	xpedx, LLC	  	 	65	% 	 	 	[ —	] 	
B. Unisource

Pledged Entity	  	Pledgor	  	Percentage
Ownership
Interest Pledged	 	 	Stock
Certificate
Number	 	
Unisource Worldwide, Inc.	  	Veritiv Corporation (f/k/a xpedx Holding Company)	  	 	100	% 	 	 	25280	  	
Unisource International Holdings, Inc.	  	Unisource Worldwide, Inc.	  	 	100	% 	 	 	1	  	
Graphic Communications Holdings, Inc.	  	Unisource Worldwide, Inc.	  	 	100	% 	 	 	11	  	
Paper Corporation of North America	  	Unisource Worldwide, Inc.	  	 	100	% 	 	 	1	  	
Paper Corporation of North America	  	Unisource Worldwide, Inc.	  	 	100	% 	 	 	2	  	
Alco Realty, Inc.	  	Unisource Worldwide, Inc.	  	 	100	% 	 	 	R-1	  	
Unisource Realty, Inc.	  	Unisource Worldwide, Inc.	  	 	100	% 	 	 	R-1	  	
Unisource International Holdings Poland, Inc.	  	Unisource International Holdings, Inc.	  	 	100	% 	 	 	[ —	] 	
Unisource International SA, Inc.	  	Unisource International Holdings, Inc.	  	 	65	% 	 	 	[ —	] 	
Graph Comm Holdings International, Inc.	  	Graphic Communications Holdings, Inc.	  	 	100	% 	 	 	2	  	
Unisource International China, Inc.	  	Unisource International Holdings, Inc.	  	 	100	% 	 	 	[ —	] 	
Unisource Canada, Inc.	  	Paper Corporation of North America	  	 	65	% 	 	 	[C-2	] 1  	

1  	To confirm that this certificate constitutes no more than 65% of equity of Unisource Canada, Inc.	
 
5

Schedule 3
Perfection Matters
1. Existing Security Interests
A. xpedx

 	  	Debtor
(xpedx entities)	  	Search
Jurisdiction	  	Scope of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt.
File Date	  	Amdt. File #	
1.	  	(xpedx, LLC)
xpedx
PO Box 625799
Cincinnati, OH 45262
 
&
 
Technology Media Group
1208 Viceroy Drive
Dallas, TX 75247	  	New York	  	UCC Debtor Search	  	UCC 1	  	Recognition Systems, Inc.
 
30 Harbor Park Drive
 
Port Washington, NY 11050	  	Specified Equipment	  	09/25/2013	  	201309258388920	  		  		
 
6

B. Unisource

 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
1.	  	Alco Realty, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	20110966203	  		  		
2.	  	Graph Comm Holdings International, Inc.	  	California	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	11-7263485370	  		  		
 
7

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
3.	  	Graphic Communication Holdings, Inc.	  	California	  	UCC Debtor Search	  	UCC 1	  	SP III 909 Lake Carolyn Parkway, L.P.
 
c/o CB Richard Ellis
 
865 S. Figueroa, Suite 3500
 
Los Angeles, CA 90017
 
c/o CB Richard Ellis Strategic Partners
 
515 S. Flower Street, Suite 3100
 
Los Angeles, CA 90071	  	Debtor’s property situated in or upon specified premises or used within specified project	  	09/08/2006	  	06-7085203647	  	3/24/2011 (Amdt.)
 
3/24/2011 (Cont.)	  	11-72645906

11-72645907	
4.	  	Graphic Communication Holdings, Inc.	  	California	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	11-7263485754	  		  		
 
8

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
5.	  	Paper Corporation of North America	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966187	  		  		
6.	  	Unisource Canada, Inc.	  	Canada	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	08/05/2009	  	2009085898	  		  		
7.	  	Unisource Canada, Inc.	  	Canada	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/16/2011	  	2011033257	  		  		
8.	  	Unisource International Holdings, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966161	  		  		
 
9

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
9.	  	Unisource Realty	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966153	  		  		
10.	  	Unisource Worldwide, Inc.
 
133 Peachtree Street NE
 
Atlanta, GA 30303	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Crown Credit Company
 
40 S. Washington Street
 
New Bremen, OH 45869	  	Current and future Equipment leased pursuant to specified lease agreement	  	03/31/2004	  	40905432	  	3/31/2004 (Amdt.)
 
10/14/2008 (Cont.)
 
3/3/2014 (Cont.)	  	40906265

83451836

40804740	
11.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	UPS Capital Corporation
 
35 Glenlake Parkway, NE
 
Atlanta, GA 30328	  	Specified Equipment	  	01/13/2005	  	50196130	  	11/17/2009 (Cont.)	  	93680540	
12.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	UPS Capital Corporation
 
35 Glenlake Parkway, NE
 
Atlanta, GA 30328	  	Specified Equipment	  	03/18/2005	  	50985052	  	02/04/2010 (Cont.)	  	00389266	
 
10

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
13.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	UPS Capital Corporation
 
35 Glenlake Parkway, NE
 
Atlanta, GA 30328	  	Specified Equipment	  	03/22/2005	  	51001503	  	04/06/2005 (Amdt.)
 
02/04/2010 (Cont.)	  	51053892

00389316	
14.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	UPS Capital Corporation
 
35 Glenlake Parkway, NE
 
Atlanta, GA 30328	  	Specified Equipment	  	02/10/2006	  	60576876	  	01/04/2011 (Cont.)	  	10020217	
15.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Current and future Equipment leased pursuant to specified lease agreement	  	02/20/2007	  	70645845	  	1/26/2012 (Cont.)	  	20332058	
16.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Specified Equipment	  	02/20/2007	  	70646314	  	02/10/2012 (Cont.)	  	20552119	
 
11

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
17.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Specified Equipment	  	08/02/2007	  	72944667	  	10/17/2007 (Asgnmt.)
 
10/17/2007 (Amdt.)
 
08/01/2012 (Cont.)	  	73912135

73914511

22950204	
18.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Specified Equipment	  	10/30/2007	  	74110200	  	05/06/2008 (Asgnmt.)
 
05/06/2008 (Amdt.)
 
10/26/2012 (Cont.)	  	81568557

81568987

2415958	
19.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Banc of America Leasing & Capital, Inc.
 
One Financial Plaza
 
Providence, RI 02903	  	Specified Equipment	  	05/28/2008	  	81821162	  	08/21/2008 (Asgnmt.)
 
05/13/2013 (Cont.)	  	82859765

31822551	
 
12

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
20.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Leaf Funding, Inc.
 
2005 Market Street, 15 th Floor
 
Philadelphia, PA 19103	  	*All of Debtor’s right, title and interest in all agreements assigned, sold, or otherwise conveyed by Debtor to Secured Creditor (the “Chattel Paper”) and assets related to such Chattel Paper	  	07/16/2009	  	92279542	  		  		
21.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	08/19/2009	  	92664941	  		  		
 
13

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
22.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	08/19/2009	  	92664958	  		  		
23.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	08/19/2009	  	92664974	  		  		
24.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	09/18/2009	  	92997705	  		  		
 
14

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
25.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/13/2009	  	93285415	  		  		
26.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/13/2009	  	93294490	  		  		
27.	  	Unisource Worldwide
Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	11/05/2009	  	93557433	  		  		
 
15

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
28.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	12/09/2009	  	93944417	  		  		
29.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	12/16/2009	  	94026982	  		  		
30.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	12/16/2009	  	94026990	  		  		
 
16

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
31.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	02/09/2010	  	00442297	  		  		
32.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	02/09/2010	  	00442305	  		  		
33.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	05/11/2010	  	01641806	  		  		
 
17

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
34.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	05/20/2010	  	01779036	  		  		
35.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	07/01/2010	  	02313421	  		  		
36.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	08/10/2010	  	02782005	  		  		
 
18

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
37.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Toyota Motor Credit Corporation
 
P.O. Box 3457
 
Torrance, CA 90510	  	Specified Equipment	  	10/20/2010	  	03668997	  		  		
38.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/20/2010	  	03671751	  		  		
39.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/20/2010	  	03671777	  		  		
 
19

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
40.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/20/2010	  	03671785	  		  		
41.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	02/10/2011	  	10497076	  		  		
42.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Marubeni America Corp.
 
375 Lexington Avenue
 
New York, NY 10017	  	Specified Equipment	  	02/11/2011	  	10524374	  		  		
43.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966146	  		  		
 
20

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
44.	  	Unisource Worldwide, Inc.
 
&
 
Unisource Global Solutions
 
6600 Governors Lake Parkway
 
Norcross, GA 30071	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Sumitomo (SHI) Plastics Machinery (America), LLC
 
1266 Oakbrook Drive
 
Norcross, GA 30093	  	Specified Equipment	  	04/21/11	  	11500936	  		  		
45.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	04/25/2011	  	11536864	  		  		
46.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/17/2011	  	13988055	  		  		
 
21

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
47.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Specified Equipment	  	10/17/2011	  	13988063	  		  		
48.	  	Unisource Worldwide Inc.
 
2600 Commerce Way
 
Commerce, CA 90040	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Raymond Leasing Corporation
 
Corporate Headquarters P.O. Box 130
 
Greene, NY 13778	  	Financing Statement Missing	  	10/17/2011	  	13988089	  		  		
49.	  	Unisource Worldwide, Inc.
 
1090 Bailey Hill Road
 
Eugene, OR 97402	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	U.S. Bank Equipment Finance, A Division of U.S. Bank National Association
 
1310 Madrid Street
 
Marshall, MN 56258	  	Specified Equipment	  	01/12/12	  	20147076	  		  		
 
22

																					
 	  	Debtor
(Unisource
Entities)	  	Search
Jurisdiction	  	Scope
of
Search	  	Type of
Filing
Found	  	Secured
Party/Plaintiff	  	Collateral
Type	  	Original File
Date/Original
Suit Date	  	Original File
#/Status	  	Amdt. File
Date	  	Amdt. File #	
50.	  	Unisource Worldwide, Inc.
 
9001 Wyoming Avenue N
 
Brooklyn Park, MN 55445	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Robert Reiser & Co., Inc.
 
725 Dedham Street
 
Canton, MA 02021	  	Specified Equipment	  	06/29/12	  	22532663	  		  		
51.	  	Unisource Worldwide, Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Marubeni America Corp.
 
375 Lexington Avenue
 
New York, NY 10017	  	Specified Equipment	  	05/22/2013	  	31950949	  		  		
52.	  	UWW Holdings,Inc.	  	Delaware	  	UCC Debtor Search	  	UCC 1	  	Bank of America, N.A.
 
335 Madison Avenue
 
New York, NY 10017	  	All current and future assets and personal property of the Debtor	  	03/15/2011	  	10966138	  		  		
 
23

2. Closing Date UCC Filings
A. xpedx

Name of Entity	  	Jurisdiction of Organization	  	Filing Office	  	Document Filed	
xpedx Intermediate, LLC	  	DE	  	Secretary of State	  	UCC-1	
xpedx, LLC	  	NY	  	Secretary of State	  	UCC-1	
xpedx International, Inc.	  	DE	  	Secretary of State	  	UCC-1	
 
B. Unisource	  		  		  		
				
Name of Entity	  	Jurisdiction of Organization	  	Filing Office	  	Document Filed	
Unisource Worldwide, Inc.	  	DE	  	Secretary of State	  	UCC-1	
Unisource International Holdings, Inc.	  	DE	  	Secretary of State	  	UCC-1	
Graphic Communications Holdings, Inc.	  	CA	  	Secretary of State	  	UCC-1	
Paper Corporation of North America	  	DE	  	Secretary of State	  	UCC-1	
Alco Realty, Inc.	  	DE	  	Secretary of State	  	UCC-1	
Unisource Realty, Inc.	  	DE	  	Secretary of State	  	UCC-1	
Unisource International Holdings Poland, Inc.	  	DE	  	Secretary of State	  	UCC-1	
Graph Comm Holdings International, Inc.	  	CA	  	Secretary of State	  	UCC-1	
Unisource International China, Inc.	  	DE	  	Secretary of State	  	UCC-1	
3. Closing Date IP Filings
A. xpedx
a. Filings with the U.S. Patent and Trademark Office
 
 	1.	Notice and Confirmation of Security Interest in Patents by xpedx, LLC, dated as of             , 2014, in the U.S. Patent and Trademark Office	
 
 	2.	Notice and Confirmation of Security Interest in Trademarks by xpedx, LLC, dated as of             , 2014, in the U.S. Patent and Trademark Office	
 
24

b. Filings with the U.S. Copyright Office
 
 	1.	Grant of Security Interest in Copyrights by xpedx, LLC, dated as of             , 2014, in the U.S. Copyright Office	
B. Unisource
a. Filings with the U.S. Patent and Trademark Office
 
 	1.	Notice and Confirmation of Security Interest in Patents by Unisource Worldwide, Inc., dated as of             , 2014, in the U.S. Patent and Trademark Office	
 
 	2.	Notice and Confirmation of Security Interest in Trademarks by Unisource Worldwide, Inc., dated as of             , 2014, in the U.S. Patent and Trademark Office	
b. Filings with the U.S. Copyright Office
 
 	1.	Grant of Security Interest in Copyrights by Unisource Worldwide, Inc., dated as of             , 2014, in the U.S. Copyright Office	
 
25

Schedule 4A
Financing Statements
[UCC-1 filings to be attached]
 
26

Schedule 4B
Granting Party Information
A. xpedx

Name of Entity	  	Type of Organization	  	Jurisdiction of
Organization	  	Organizational
Identification Number	  	Federal Tax
Identification Number	  	Chief Executive Office
Address or Preferred
Mailing Address	
Veritiv Corporation (f/k/a xpedx Holding Company)	  	Corporation	  	DE	  	5364560	  	46-3234977	  	6400 Poplar Avenue, Memphis, TN 38197	
xpedx Intermediate, LLC	  	Limited Liability Company	  	DE	  	5470768	  	46-4649319	  	6400 Poplar Avenue, Memphis, TN 38197	
xpedx, LLC	  	Limited Liability Company	  	NY	  	4518940	  	46-4663631	  	6400 Poplar Avenue, Memphis, TN 38197	
xpedx International, Inc.	  	Corporation	  	DE	  	4467116	  	26-2764720	  	6400 Poplar Avenue, Memphis, TN 38197	
B. Unisource

Name of Entity	  	Type of Organization	  	Jurisdiction of
Organization	  	Organizational
Identification
Number	  	Federal Tax
Identification Number	  	Chief Executive Officer
Address or Preferred
Mailing Address	
Unisource Worldwide, Inc.	  	Corporation	  	DE	  	0815767	  	13-5369500	  	6600 Governors Lake Pkwy, Norcross GA 30071	
Unisource International Holdings, Inc.	  	Corporation	  	DE	  	4592261	  	61-1573324	  	6600 Governors Lake Pkwy, Norcross GA 30071	
Graphic Communications Holdings, Inc.	  	Corporation	  	CA	  	C1317883	  	33-0063298	  	6600 Governors Lake Pkwy, Norcross GA 30071	
Paper Corporation of North America	  	Corporation	  	DE	  	2272606	  	51-0336097	  	6600 Governors Lake Pkwy, Norcross GA 30071	
Alco Realty, Inc. 	  	Corporation	  	DE	  	2109750	  	23-2437926	  	6600 Governors Lake Pkwy, Norcross GA 30071	
Unisource Realty, Inc.	  	Corporation	  	DE	  	2498625	  	23-2827171	  	6600 Governors Lake Pkwy, Norcross GA 30071	
 
27

											
Name of Entity	  	Type of Organization	  	Jurisdiction of
Organization	  	Organizational
Identification Number	  	Federal Tax
Identification Number	  	Chief Executive Officer
Address or Preferred
Mailing Address	
Unisource International Holdings Poland, Inc.	  	Corporation	  	DE	  	4954550	  	80-0703210	  	6600 Governors Lake Pkwy, Norcross GA 30071	
Graph Comm Holdings International, Inc.	  	Corporation	  	CA	  	C2223306	  	33-0898789	  	6600 Governors Lake Pkwy, Norcross GA 30071	
Unisource International China, Inc.	  	Corporation	  	DE	  	5386583	  	32-0418485	  	6600 Governors Lake Pkwy, Norcross GA 30071	
 
28

Schedule 5
Intellectual Property
Patents, Copyrights, and Trademarks
 
1.	Patents	
Unisource Worldwide, Inc.
Pending Patent Applications

Jurisdiction	  	Title	  	Patent #	  	Issue Date	  	Appl. #	  	Appl. Date	  	Comments	  	Owner	
US	  	Bottle Packaging System	  	N/A	  	N/A	  	61/840,168	  	6/27/2013	  	Pending	  	Unisource Worldwide, Inc.	
xpedx
Issued Patents

Jurisdiction	  	Title	  	Patent #	  	Issue Date	  	Appl. #	  	Appl. Date	  	Comments	  	Owner	
US	  	Cartridge Insert which Fits Into a Box	  	6685025	  	03-Feb-2004	  	09/921091	  	02-Aug-2001	  		  	xpedx, LLC	
US	  	Reclosable Folded Container with Bellows Corner Panels	  	6729533	  	04-May-2004	  	10/411489	  	10-Apr-2003	  		  	xpedx, LLC	
US	  	Cartridge Insert which Fits Into a Box	  	7021024	  	04-Apr-2006	  	10/689802	  	21-Oct-2003	  		  	xpedx, LLC	
US	  	Tool with Protective Sheath	  	7082864	  	01-Aug-2006	  	11/111425	  	21-Apr-2005	  		  	xpedx, LLC	
US	  	Cartridge Insert which Fits Into a Box	  	7278249	  	09-Oct-2007	  	11/299443	  	15-Dec-2005	  		  	xpedx, LLC	
US	  	Insert for Protecting a Product within a Box	  	7648031	  	19-Jan-2010	  	11/299978	  	12-Dec-2005	  		  	xpedx, LLC	
US	  	Merchandising Package	  	D601887	  	13-Oct-2009	  	29/330855	  	15-Jan-2009	  	Design patent	  	xpedx, LLC	
US	  	Ramp	  	D671003	  	20-Nov-2012	  	29/415220	  	08-Mar-2012	  	Design Patent	  	xpedx, LLC	
US	  	Carton	  	D689360	  	10-Sept-2013	  	29/414836	  	05-Mar-2012	  	Design Patent	  	xpedx, LLC	
US	  	A Retractable Container with Support Legs	  	8668133	  	11-Mar-2014	  	13190711	  	26-Jul-2011	  		  	xpedx, LLC	
 
29

Pending Patent Applications

Jurisdiction	  	Title	  	Patent #	  	Issue Date	  	Appl. #	  	Appl. Date	  	Comments	  	Owner	
US	  	Collapsible Bulk Bin Container	  		  		  	13/111552	  	19-May-2011	  	Pub #: 20110308993	  	xpedx, LLC	
US	  	Shipping and Display Container	  		  		  	13/477149	  	22-May-2012	  		  	xpedx, LLC	
 
2.	Trademarks	
Unisource Worldwide, Inc.
Registered Trademarks
United States Trademarks

Trademark	  	Serial Number	  	Current Status	  	Registration Number	  	Registration Date	  	Country
Name	  	Owner	
AD-BRITE OPALINE*	  	78/218962	  	Registered	  	2804999	  	Jan 13, 2004	  	US	  	Unisource Worldwide, Inc.	
ALL STAR	  	74/004919	  	Registered	  	1636612	  	Mar 5, 1991	  	US	  	Unisource Worldwide, Inc.	
AVENGER	  	85/716773	  	Allowed	  	N/A	  	Oct 2, 2013	  	US	  	Unisource Worldwide, Inc.	
BLOT THAT SPOT	  	77/183670	  	Registered	  	3372334	  	Jan 22, 2008	  	US	  	Unisource Worldwide, Inc.	
BRAND EFFICIENCY	  	85/898225	  	Allowed	  	N/A	  	Apr 8, 2013	  	US	  	Unisource Worldwide, Inc.	
CHEMTROL	  	77/007341	  	Registered	  	3259858	  	Jul 10, 2007	  	US	  	Unisource Worldwide, Inc.	
CHEMTROL	  	77/007393	  	Registered	  	3259859	  	Jul 10, 2007	  	US	  	Unisource Worldwide, Inc.	
CHEMTROLMINI	  	77/007422	  	Registered	  	3259860	  	Jul 10, 2007	  	US	  	Unisource Worldwide, Inc.	
CHEMTROLMINI	  	77/007436	  	Registered	  	3259861	  	Jul 10, 2007	  	US	  	Unisource Worldwide, Inc.	
COLORSOURCE	  	74/233538	  	Registered	  	1729297	  	Nov 3, 1992	  	US	  	Unisource Worldwide, Inc.	
COMET 92	  	85/637312	  	Registered	  	4250216	  	Nov 27, 2012	  	US	  	Unisource Worldwide, Inc.	
COMET HI-BRITE	  	85/637272	  	Registered	  	4250214	  	Nov 27, 2012	  	US	  	Unisource Worldwide, Inc.	
 
30

													
Trademark	  	Serial Number	  	Current Status	  	Registration Number	  	Registration Date	  	Country
Name	  	Owner	
COMET OPAQUE	  	77/298215	  	Registered	  	3481966	  	Aug 5, 2008	  	US	  	Unisource Worldwide, Inc.	
COMET XEROCOPY	  	77/579682	  	Registered	  	3670803	  	Aug 18, 2009	  	US	  	Unisource Worldwide, Inc.	
COPY SAVER	  	77/438659	  	Registered	  	3599913	  	Mar 31, 2009	  	US	  	Unisource Worldwide, Inc.	
COPYSOURCE	  	73/240019	  	Registered	  	1209177	  	Sep 14, 1982	  	US	  	Unisource Worldwide, Inc.	
DECATHLON	  	78/107980	  	Registered	  	2739130	  	Jul 15, 2003	  	US	  	Unisource Worldwide, Inc.	
DEFENDER	  	85/464457	  	Registered	  	4142792	  	May 15, 2012	  	US	  	Unisource Worldwide, Inc.	
DEFENDER COLORS	  	85/464572	  	Registered	  	4142794	  	May 15, 2012	  	US	  	Unisource Worldwide, Inc.	
DEFIANCE	  	85/464433	  	Registered	  	4142791	  	May 15, 2012	  	US	  	Unisource Worldwide, Inc.	
EARTHSHIELD	  	85/484949	  	Allowed	  	N/A	  	Jul 3, 2013	  	US	  	Unisource Worldwide, Inc.	
EARTHSHIELD RECYCLED	  	85/484963	  	Allowed	  	N/A	  	Jul 17, 2013	  	US	  	Unisource Worldwide, Inc.	
ECOLOGICARD	  	77/883501	  	Registered	  	3941610	  	Apr 5, 2011	  	US	  	Unisource Worldwide, Inc.	
ECONOSOURCE	  	73/534846	  	Registered	  	1365576	  	Oct 15, 1985	  	US	  	Unisource Worldwide, Inc.	
EFFICIENCY REIMAGINED	  	85/746756	  	Registered	  	4495724	  	Mar 11, 2014	  	US	  	Unisource Worldwide, Inc.	
FREEDOM	  	85/432593	  	Registered	  	4142685	  	May 15, 2012	  	US	  	Unisource Worldwide, Inc.	
GALAXY OFFSET	  	78/250060	  	Registered	  	2823551	  	Mar 16, 2004	  	US	  	Unisource Worldwide, Inc.	
GALAXY OFFSET	  	78/250070	  	Registered	  	2853735	  	Jun 15, 2004	  	US	  	Unisource Worldwide, Inc.	
 
31

													
Trademark	  	Serial Number	  	Current Status	  	Registration Number	  	Registration Date	  	Country
Name	  	Owner	
GALAXY PLUS	  	77/035019	  	Registered	  	3281856	  	Aug 21, 2007	  	US	  	Unisource Worldwide, Inc.	
GC	  	77/034917	  	Registered	  	3407853	  	Apr 8, 2008	  	US	  	Unisource Worldwide, Inc.	
GC BRITE	  	77/386890	  	Registered	  	3596219	  	Mar 24, 2009	  	US	  	Unisource Worldwide, Inc.	
GC BRITE PLUS	  	77/386902	  	Registered	  	3596220	  	Mar 24, 2009	  	US	  	Unisource Worldwide, Inc.	
GOLD CREST	  	74/024850	  	Registered	  	1618773	  	Oct 23, 1990	  	US	  	Unisource Worldwide, Inc.	
GRAPHIC COMMUNICATIONS	  	77/034907	  	Registered	  	3429226	  	May 20, 2008	  	US	  	Unisource Worldwide, Inc.	
HANDI-PAK*	  	85/716743	  	Allowed	  	N/A	  	Oct 2, 2013	  	US	  	Unisource Worldwide, Inc.	
JFD JUST FOUR DISTRIBUTION	  	78/355017	  	Registered	  	2915410	  	Dec 28, 2004	  	US	  	Unisource Worldwide, Inc.	
JFD JUST FOUR DISTRIBUTION	  	78/355125	  	Registered	  	2915411	  	Dec 28, 2004	  	US	  	Unisource Worldwide, Inc.	
JUST FOUR DISTRIBUTION	  	78/328241	  	Registered	  	2915403	  	Dec 28, 2004	  	US	  	Unisource Worldwide, Inc.	
LEAP	  	85/971868	  	Allowed	  		  	Jun 27, 2013	  	US	  	Unisource Worldwide, Inc.	
LIBERTY	  	85/428598	  	Registered	  	4199993	  	Aug 28, 2012	  	US	  	Unisource Worldwide, Inc.	
LIQUI-TERGE	  	77/007566	  	Registered	  	3284329	  	Aug 28, 2007	  	US	  	Unisource Worldwide, Inc.	
MR. CLICK	  	78/534717	  	Registered	  	3379322	  	Feb 5, 2008	  	US	  	Unisource Worldwide, Inc.	
NORDIC	  	74/523984	  	Registered	  	2000251	  	Sep 10, 1996	  	US	  	Unisource Worldwide, Inc.	
 
32

													
Trademark	  	Serial Number	  	Current Status	  	Registration Number	  	Registration Date	  	Country
Name	  	Owner	
NORDIC PLUS	  	78/966096	  	Registered	  	3324671	  	Oct 30, 2007	  	US	  	Unisource Worldwide, Inc.	
NORDIC+	  	78/966084	  	Registered	  	3261054	  	Jul 10, 2007	  	US	  	Unisource Worldwide, Inc.	
ONE COAT	  	77/183651	  	Registered	  	3438503	  	May 27, 2008	  	US	  	Unisource Worldwide, Inc.	
PAPER CORPORATION OF UNITED STATES P.C. OF US	  	74/208618	  	Registered	  	1708662	  	Aug 18, 1992	  	US	  	Unisource Worldwide, Inc.	
PAPER PLUS	  	73/095321	  	Registered	  	1072911	  	Sep 6, 1977	  	US	  	Unisource Worldwide, Inc.	
PINE-O-DIS	  	77/220727	  	Registered	  	3388511	  	Feb 26, 2008	  	US	  	Unisource Worldwide, Inc.	
PKG	  	77/913212	  	Registered	  	3909212	  	Jan 18, 2011	  	US	  	Unisource Worldwide, Inc.	
PORCELAIN	  	74/070155	  	Registered	  	1695319	  	Jun 16, 1992	  	US	  	Unisource Worldwide, Inc.	
PORCELAIN ECO	  	77/861191	  	Registered	  	3929609	  	Mar 8, 2011	  	US	  	Unisource Worldwide, Inc.	
PRESSMASTER	  	72/087714	  	Registered	  	718947	  	Jul 25, 1961	  	US	  	Unisource Worldwide, Inc.	
REVERENCE	  	85/720503	  	Allowed	  	N/A	  	Oct 2, 2013	  	US	  	Unisource Worldwide, Inc.	
REVERENCE Q	  	85/720506	  	Allowed	  	N/A	  	Oct 2, 2013	  	US	  	Unisource Worldwide, Inc.	
ROLLSOURCE	  	76/144987	  	Registered	  	2494361	  	Oct 2, 2001	  	US	  	Unisource Worldwide, Inc.	
SCUM CLEAN	  	76/053030	  	Registered	  	2516758	  	Dec 11, 2001	  	US	  	Unisource Worldwide, Inc.	
SELECTSOURCE	  	85/867269	  	Allowed	  	N/A	  	Mar 5, 2013	  	US	  	Unisource Worldwide, Inc.	
SELECTSOURCE	  	85/867318	  	Allowed	  	N/A	  	Mar 5, 2013	  	US	  	Unisource Worldwide, Inc.	
SENTRY	  	85/464400	  	Registered	  	4142790	  	May 15, 2012	  	US	  	Unisource Worldwide, Inc.	
 
33

													
Trademark	  	Serial Number	  	Current Status	  	Registration Number	  	Registration Date	  	Country
Name	  	Owner	
SIGNET	  	74/271513	  	Registered	  	1805267	  	Nov 16, 1993	  	US	  	Unisource Worldwide, Inc.	
SPHINX	  	72/190756	  	Registered	  	0780344	  	Nov 17, 1964	  	US	  	Unisource Worldwide, Inc.	
SPHINX	  	72/190757	  	Registered	  	780345	  	Nov 17, 1964	  	US	  	Unisource Worldwide, Inc.	
SPHINX	  	73/280018	  	Registered	  	1187283	  	Jan 26, 1982	  	US	  	Unisource Worldwide, Inc.	
SPHINX	  	74/034017	  	Registered	  	1625966	  	Dec 4, 1990	  	US	  	Unisource Worldwide, Inc.	
STARBRITE	  	72/026728	  	Registered	  	672502	  	Jan 13, 1959	  	US	  	Unisource Worldwide, Inc.	
STEALTH	  	85/716800	  	Allowed	  	N/A	  	Oct 2, 2013	  	US	  	Unisource Worldwide, Inc.	
STELLAR GLOSS	  	85/790821	  	Allowed	  	N/A	  	Oct 2, 2013	  	US	  	Unisource Worldwide, Inc.	
STELLAR GLOSS	  	85/790799	  	Allowed	  	N/A	  	Oct 2, 2013	  	US	  	Unisource Worldwide, Inc.	
STELLAR MATTE	  	85/790755	  	Allowed	  	N/A	  	Oct 2, 2013	  	US	  	Unisource Worldwide, Inc.	
STELLAR MATTE	  	85/790738	  	Allowed	  	N/A	  	Oct 2, 2013	  	US	  	Unisource Worldwide, Inc.	
STINGER	  	77/007697	  	Registered	  	3284331	  	Aug 28, 2007	  	US	  	Unisource Worldwide, Inc.	
SUD N’ KLEEN	  	77/255582	  	Registered	  	3422052	  	May 6, 2008	  	US	  	Unisource Worldwide, Inc.	
TECHNISOURCE	  	77/071838	  	Registered	  	3271439	  	Jul 31, 2007	  	US	  	Unisource Worldwide, Inc.	
TRIATHLON	  	78/440174	  	Registered	  	3101825	  	Jun 6, 2006	  	US	  	Unisource Worldwide, Inc.	
U	  	78/590660	  	Registered	  	3206797	  	Feb 6, 2007	  	US	  	Unisource Worldwide, Inc.	
U UNISOURCE	  	78/268159	  	Registered	  	2953498	  	May 17, 2005	  	US	  	Unisource Worldwide, Inc.	
U UNISOURCE	  	74/191164	  	Registered	  	1710597	  	Aug 25, 1992	  	US	  	Unisource Worldwide, Inc.	
 
34

													
Trademark	  	Serial Number	  	Current Status	  	Registration
Number	  	Registration Date	  	Country Name	  	Owner	
U UNISOURCE	  	78/268166	  	Registered	  	3325554	  	Oct 30, 2007	  	US	  	Unisource Worldwide, Inc.	
U UNISOURCE	  	74/477113	  	Registered	  	1974039	  	May 14, 1996	  	US	  	Unisource Worldwide, Inc.	
U UNISOURCE	  	85/422862	  	Registered	  	4138962	  	May 8, 2012	  	US	  	Unisource Worldwide, Inc.	
U UNISOURCE CUSTOMER SOLUTIONS IN A GLOBAL MARKET	  	85/537148	  	Registered	  	4186892	  	Aug 7, 2012	  	US	  	Unisource Worldwide, Inc.	
U UNISOURCE CUSTOMER SOLUTIONS IN A GLOBAL MARKET	  	85/537174	  	Registered	  	4186893	  	Aug 7, 2012	  	US	  	Unisource Worldwide, Inc.	
U UNISOURCE ENGINEERED SOLUTIONS INNOVATORS IN PACKAGING INCH CM	  	85/150792	  	Registered	  	4013929	  	Aug 16, 2011	  	US	  	Unisource Worldwide, Inc.	
 U UNISOURCE R	  	77/937305	  	Registered	  	3855006	  	Sep 28, 2010	  	US	  	Unisource Worldwide, Inc.	
uADVANTAGE	  	85/008673	  	Registered	  	4050120	  	Nov 1, 2011	  	US	  	Unisource Worldwide, Inc.	
uBRAND	  	77/183913	  	Registered	  	3470407	  	Jul 22, 2008	  	US	  	Unisource Worldwide, Inc.	
uDIGITAL	  	77/264909	  	Registered	  	3496835	  	Sep 2, 2008	  	US	  	Unisource Worldwide, Inc.	
uGLOSS	  	77/261616	  	Registered	  	3481899	  	Aug 5, 2008	  	US	  	Unisource Worldwide, Inc.	
UGS A DIVISION OF UNISOURCE WORLDWIDE, INC.	  	85/626673	  	Allowed	  	N/A	  	Nov 6, 2013	  	US	  	Unisource Worldwide, Inc.	
UGS A DIVISION OF UNISOURCE WORLDWIDE, INC.	  	85/627272	  	Allowed	  	N/A	  	Nov 6, 2013	  	US	  	Unisource Worldwide, Inc.	
 
35

													
Trademark	  	Serial Number	  	Current Status	  	Registration
Number	  	Registration Date	  	Country Name	  	Owner	
UGS A DIVISION OF UNISOURCE WORLDWIDE, INC. PRODUCTS & PACKAGING IN HARMONY	  	85/627238	  	Allowed	  	N/A	  	Nov 6, 2013	  	US	  	Unisource Worldwide, Inc.	
 UGS A DIVISION OF UNISOURCE WORLDWIDE, INC. PRODUCTS & PACKAGING IN HARMONY	  	85/589860	  	Allowed	  	N/A	  	Nov 6, 2013	  	US	  	Unisource Worldwide, Inc.	
 uLABEL	  	77/264890	  	Registered	  	3481909	  	Aug 5, 2008	  	US	  	Unisource Worldwide, Inc.	
UNISOURCE	  	78/268151	  	Registered	  	3344969	  	Nov 27, 2007	  	US	  	Unisource Worldwide, Inc.	
UNISOURCE	  	77/006945	  	Registered	  	3443464	  	Jun 10, 2008	  	US	  	Unisource Worldwide, Inc.	
UNISOURCE	  	85/589289	  	Registered	  	4241868	  	Nov 13, 2012	  	US	  	Unisource Worldwide, Inc.	
UNISOURCE CONSULTING*	  	85/730643	  	Allowed	  	N/A	  	Nov 7, 2013	  	US	  	Unisource Worldwide, Inc.	
UNISOURCE GLOBAL SOLUTIONS	  	77/807782	  	Registered	  	3791505	  	May 18, 2010	  	US	  	Unisource Worldwide, Inc.	
UNISOURCE GLOSS	  	78/242911	  	Registered	  	2883286	  	Sep 7, 2004	  	US	  	Unisource Worldwide, Inc.	
UNISOURCE LOGISTICS SOLUTIONS	  	85/008605	  	Registered	  	3902214	  	Jan 4, 2011	  	US	  	Unisource Worldwide, Inc.	
UNISOURCE U	  	73/551098	  	Registered	  	1381377	  	Feb 4, 1986	  	US	  	Unisource Worldwide, Inc.	
UNISOURCEDIRECT	  	78/114577	  	Registered	  	2851836	  	Jun 8, 2004	  	US	  	Unisource Worldwide, Inc.	
UNISOURCEDIRECT.COM	  	77/704601	  	Registered	  	3894616	  	Dec 21, 2010	  	US	  	Unisource Worldwide, Inc.	
UNISOURCEDIRECT.COM	  	77/704563	  	Registered	  	3797186	  	Jun 1, 2010	  	US	  	Unisource Worldwide, Inc.	
 
36

													
Trademark	  	Serial Number	  	Current Status	  	Registration
Number	  	Registration Date	  	Country Name	  	Owner	
UNISOURCEGREENFINDER	  	77/757557	  	Registered	  	3698953	  	Oct 20, 2009	  	US	  	Unisource Worldwide, Inc.	
USOURCE	  	85/536765	  	Registered	  	4179526	  	Jul 24, 2012	  	US	  	Unisource Worldwide, Inc.	
uVELVET	  	77/261878	  	Registered	  	3496830	  	Sep 2, 2008	  	US	  	Unisource Worldwide, Inc.	
VERTICIDE	  	77/007713	  	Registered	  	3273419	  	Aug 7, 2007	  	US	  	Unisource Worldwide, Inc.	
WEBSOURCE	  	73/433643	  	Registered	  	1295163	  	Sep 11, 1984	  	US	  	Unisource Worldwide, Inc.	
WORLD BOND	  	73/599004	  	Registered	  	1421022	  	Dec 16, 1986	  	US	  	Unisource Worldwide, Inc.	
 
*	Mark is currently registered but Unisource intends to abandon.	
State Trademarks

Trademark	  	Current Status	  	Registration
Number	  	Registration
Date	  	Jurisdiction	  	Owner	
ACRATHANE	  	Registered	  	56079	  	Apr 29, 1977	  	California, U.S.	  	Unisource Worldwide, Inc.	
CHEMTROL	  	Registered	  	076637	  	Apr 10, 1985	  	California, U.S.	  	Unisource Worldwide, Inc.	
CRETE TREAT	  	Registered	  	56078	  	Apr 29, 1977	  	California, U.S.	  	Unisource Worldwide, Inc.	
GENTLE SCRUB PLUS	  	Registered	  	113301	  	Jun 18, 2008	  	California, U.S.	  	Unisource Worldwide, Inc.	
GUARD ALL	  	Registered	  	102282	  	Mar 5, 1997	  	California, U.S.	  	Unisource Worldwide, Inc.	
JOHN	  	Registered	  	56084	  	Apr 29, 1977	  	California, U.S.	  	Unisource Worldwide, Inc.	
LEM.O.QUAT	  	Registered	  	100584	  	Oct 23, 1995	  	California, U.S.	  	Unisource Worldwide, Inc.	
MALGON	  	Registered	  	100145	  	Jun 2, 1995	  	California, U.S.	  	Unisource Worldwide, Inc.	
 
37

											
Trademark	  	Current Status	  	Registration
Number	  	Registration
Date	  	Jurisdiction	  	Owner	
MINT-O-QUAT	  	Registered	  	100585	  	Oct 23, 1995	  	California, U.S.	  	Unisource Worldwide, Inc.	
NICE ‘N’ SOFT	  	Registered	  	56086	  	Apr 29, 1977	  	California, U.S.	  	Unisource Worldwide, Inc.	
ONE COAT	  	Registered	  	55417	  	Dec 7, 1976	  	California, U.S.	  	Unisource Worldwide, Inc.	
PINE-O-QUAT	  	Registered	  	100582	  	Oct 23, 1995	  	California, U.S.	  	Unisource Worldwide, Inc.	
PINK VELVET	  	Registered	  	55418	  	Dec 7, 1976	  	California, U.S.	  	Unisource Worldwide, Inc.	
REBOUND	  	Registered	  	78037	  	Aug 1, 1985	  	California, U.S.	  	Unisource Worldwide, Inc.	
RIM	  	Registered	  	56082	  	Apr 29, 1977	  	California, U.S.	  	Unisource Worldwide, Inc.	
SANI-BRITE	  	Registered	  	102359	  	Mar 25, 1997	  	California, U.S.	  	Unisource Worldwide, Inc.	
SANI-SORB BITS	  	Registered	  	56085	  	Apr 29, 1977	  	California, U.S.	  	Unisource Worldwide, Inc.	
SCUM CLEAN	  	Registered	  	102278	  	Mar 5, 1997	  	California, U.S.	  	Unisource Worldwide, Inc.	
SEPTOPHENE	  	Registered	  	55419	  	Dec 7, 1976	  	California, U.S.	  	Unisource Worldwide, Inc.	
xpedx
Registered Trademarks
United States Trademarks

Trademark	  	Appl. #	  	Status	  	Reg. #	  	File
Date	  	Reg.
Date	  	Jurisdiction	  	Owner	
3-D box design (Fidelity Container)	  	73/144274	  	Registered	  	1107248	  	11-Oct-1977	  	28-Nov-1978	  	United States	  	xpedx, LLC	
AIRWAVES	  	77/528983	  	Registered	  	3729393	  	23-Jul-2008	  	22-Dec-2009	  	United States	  	xpedx, LLC	
ARVEY	  	77/551166	  	Registered	  	3580436	  	20-Aug-2008	  	24-Feb-2009	  	United States	  	xpedx, LLC	
BALBOA	  	73/566693	  	Registered	  	1395689	  	4-Nov-1985	  	3-Jun-1986	  	United States	  	xpedx, LLC	
 
38

															
Trademark	  	Appl. #	  	Status	  	Reg. #	  	File
Date	  	Reg.
Date	  	Jurisdiction	  	Owner	
BEYOND DISTRIBUTION	  	85/022701	  	Registered	  	4035835	  	26-Apr-2010	  	4-Oct-2011	  	United States	  	xpedx, LLC	
BULKLEY DUNTON	  	77/533608	  	Registered	  	3580382	  	29-Jul-2008	  	24-Feb-2009	  	United States	  	xpedx, LLC	
CENTRAL LEWMAR	  	77/420699	  	Registered	  	3790702	  	13-Mar-2008	  	18-May-2010	  	United States	  	xpedx, LLC	
CENTRAL MARQUARDT	  	77/678964	  	Registered	  	3948301	  	26-Feb-2009	  	19-Apr-2011	  	United States	  	xpedx, LLC	
COPY CALIFORNIA & design	  	77/449242	  	Registered	  	3677396	  	16-Apr-2008	  	1-Sep-2009	  	United States	  	xpedx, LLC	
DISCOVER	  	77/318920	  	Registered	  	3457602	  	1-Nov-2007	  	1-Jul-2008	  	United States	  	xpedx, LLC	
DISTRIBUTION EXCELLENCE	  	85/539657	  	Registered	  	4348260	  	12-Feb-2012	  	4-Jun-2013	  	United States	  	xpedx, LLC	
ENDURANCE	  	78/919592	  	Registered	  	3304713	  	29-Jun-2006	  	2-Oct-2007	  	United States	  	xpedx, LLC	
GLOBAL REACH. LOCAL EXPERTISE.	  	85/418506	  	Registered	  	4343238	  	9-Sep-2011	  	28-May-2013	  	United States	  	xpedx, LLC	
HEALTHCARE FACILITY ADVISOR	  	85/7669196	  	Registered	  	4303089	  	1-Nov-2012	  	12-Mar-2013	  	United States	  	xpedx, LLC	
HEALTHY BUILDINGS. HEALTHY PEOPLE.	  	85/022714	  	Registered	  	3963409	  	26-Apr-2010	  	17-May-2011	  	United States	  	xpedx, LLC	
HEALTHY CAMPUS. HEALTHY STUDENTS.	  	85/022722	  	Registered	  	3959599	  	26-Apr-2010	  	10-May-2011	  	United States	  	xpedx, LLC	
HEALTHY FACILITY. HEALTHY PEOPLE.	  	85/71616	  	Registered	  	4342682	  	5-Nov-2012	  	28-May-2013	  	United States	  	xpedx, LLC	
IF IT’S PAPER	  	77/551171	  	Registered	  	3580437	  	20-Aug-2008	  	24-Feb-2009	  	United States	  	xpedx, LLC	
JEFFERSON	  	73/628435	  	Registered	  	1435118	  	4-Nov-1986	  	31-Mar-1987	  	United States	  	xpedx, LLC	
JET TASK	  	85/704161	  	Registered	  	4289172	  	15-Aug-2012	  	12-Feb-2013	  	United States	  	xpedx, LLC	
KEEPS ON RUNNING	  	78/505722	  	Registered	  	3245386	  	26-Oct-2004	  	22-May-2007	  	United States	  	xpedx, LLC	
KNOW TO GROW	  	85/305756	  	Registered	  	4250803	  	27-Apr-2011	  	27-Nov-2012	  	United States	  	xpedx, LLC	
Making Not-for-Resale Good for Retail	  	78/433612	  	Registered	  	3074601	  	11-Jun-2004	  	28-Mar-2006	  	United States	  	xpedx, LLC	
MATRIX	  	74/312524	  	Registered	  	1772970	  	10-Sep-1992	  	25-May-1993	  	United States	  	xpedx, LLC	
MATRIX & design	  	73/685618	  	Registered	  	1491118	  	11-Sep-1987	  	7-Jun-1988	  	United States	  	xpedx, LLC	
 
39

															
Trademark	  	Appl. #	  	Status	  	Reg. #	  	File
Date	  	Reg.
Date	  	Jurisdiction	  	Owner	
MSDSONFILE	  	78/919569	  	Registered	  	3383619	  	29-Jun-2006	  	12-Feb-2008	  	United States	  	xpedx, LLC	
NATIONWIDE PAPERS	  	78/278452	  	Registered (but not maintained)	  	2865197	  	24-Jul-2003	  	20-Jul-2004	  	United States	  	xpedx, LLC	
PACKAGING EXPERTISE	  	85/022707	  	Registered	  	4068078	  	26-Apr-2010	  	6-Dec-2011	  	United States	  	xpedx, LLC	
PARK AVENUE	  	75/359069	  	Registered	  	2287030	  	18-Sep-1997	  	19-Oct-1999	  	United States	  	xpedx, LLC	
PLAN TO GROW	  	85/523778	  	Registered	  	4427081	  	24-Jan-2012	  	19-Nov-2013	  	United States	  	xpedx, LLC	
PREPSCHOOL	  	78/517685	  	Registered (but not used)	  	3254138	  	16-Nov-2004	  	19-Jun-2007	  	United States	  	xpedx, LLC	
PROCESS FOR PROFIT	  	85/461116	  	Registered	  	4121986	  	25-Aug-2010	  	3-Apr-2012	  	United States	  	xpedx, LLC	
REDISTRIBUTING SUCCESS	  	77/533294	  	Registered	  	3580379	  	29-Jul-2008	  	24-Feb-2009	  	United States	  	xpedx, LLC	
REGENCY	  	73/267111	  	Registered	  	1194567	  	20-Jun-1980	  	4-May-1982	  	United States	  	xpedx, LLC	
REGENCY	  	74/576634	  	Registered	  	2044282	  	22-Sep-1994	  	11-Mar-1997	  	United States	  	xpedx, LLC	
RELIABLE	  	74/434346	  	Registered	  	1857660	  	9-Sep-1993	  	11-Oct-1994	  	United States	  	xpedx, LLC	
RELIABLE	  	75/406663	  	Registered	  	2258069	  	17-Dec-1997	  	29-Jun-1999	  	United States	  	xpedx, LLC	
RESPONSIBLE EFFORTS SUSTAINABLE RESULTS	  	85/308027	  	Registered	  	4090175	  	29-Apr-2011	  	24-Jan-2012	  	United States	  	xpedx, LLC	
ROOM TO GROW	  	85/305815	  	Registered	  	4250804	  	27-Apr-2011	  	27-Nov-2012	  	United States	  	xpedx, LLC	
SAALFELD	  	77/533249	  	Registered	  	3662836	  	29-Jul-2008	  	4-Aug-2009	  	United States	  	xpedx, LLC	
SAALFELD REDISTRIBUTION	  	78/121036	  	Registered	  	2721432	  	11-Apr-2002	  	3-Jun-2003	  	United States	  	xpedx, LLC	
SAALFELD & logo	  	77/533278	  	Registered	  	3580378	  	29-Jul-2008	  	24-Feb-2009	  	United States	  	xpedx, LLC	
SELECT SUPPLIES	  	77/389661	  	Registered	  	3613484	  	6-Feb-2008	  	28-Apr-2009	  	United States	  	xpedx, LLC	
SEVILLE	  	75/103700	  	Registered	  	2126228	  	14-May-1996	  	30-Dec-1997	  	United States	  	xpedx, LLC	
SPRING GROVE	  	77/891106	  	Registered	  	3821616	  	11-Dec-2009	  	20-Jul-2010	  	United States	  	xpedx, LLC	
SPRING GROVE	  	85/126694	  	Registered	  	4180018	  	10-Sep-2010	  	24-Jul-2012	  	United States	  	xpedx, LLC	
STRATEGIC PAPER GROUP	  	77/420879	  	Registered	  	3793721	  	13-Mar-2008	  	25-May-2010	  	United States	  	xpedx, LLC	
TOWER	  	77/421100	  	Registered	  	3815010	  	13-Mar-2008	  	6-Jul-2010	  	United States	  	xpedx, LLC	
 
40

															
Trademark	  	Appl. #	  	Status	  	Reg. #	  	File
Date	  	Reg.
Date	  	Jurisdiction	  	Owner	
TOWER	  	77/421128	  	Registered	  	3815011	  	13-Mar-2008	  	6-Jul-2010	  	United States	  	xpedx, LLC	
TUFFLEX	  	73/729823	  	Registered	  	1559007	  	20-May-1988	  	3-Oct-1989	  	United States	  	xpedx, LLC	
TUFFLEX	  	78/092357	  	Registered	  	2931532	  	8-Nov-2001	  	8-Mar-2005	  	United States	  	xpedx, LLC	
VAST	  	78/844306	  	Registered	  	3459556	  	23-Mar-2006	  	1-Jul-2008	  	United States	  	xpedx, LLC	
VECTOR	  	77/192790	  	Registered	  	3603233	  	30-May-2007	  	7-Apr-2009	  	United States	  	xpedx, LLC	
WHITEMAN TOWER	  	77/420925	  	Registered	  	3796254	  	13-Mar-2008	  	1-Jun-2010	  	United States	  	xpedx, LLC	
xpedx	  	75/338647	  	Registered	  	2302556	  	11-Aug-1997	  	21-Dec-1999	  	United States	  	xpedx, LLC	
xpedx	  	77/148115	  	Registered	  	3544289	  	4-Apr-2007	  	9-Dec-2008	  	United States	  	xpedx, LLC	
xpedx (stylized)	  	75/385302	  	Registered	  	2366730	  	3-Nov-1997	  	11-Jul-2000	  	United States	  	xpedx, LLC	
xpedx (stylized)	  	77/148101	  	Registered	  	3544739	  	4-Apr-2007	  	30-Dec-2008	  	United States	  	xpedx, LLC	
xpedx (stylized)	  	77/192826	  	Registered	  	3544371	  	30-May-2007	  	9-Dec-2008	  	United States	  	xpedx, LLC	
xpedx.com & circle design	  	77/192871	  	Registered	  	3550962	  	30-May-2007	  	23-Dec-2008	  	United States	  	xpedx, LLC	
Z ZELLERBACH (design)	  	78/152601	  	Registered	  	2879118	  	9-Aug-2002	  	31-Aug-2004	  	United States	  	xpedx, LLC	
ZELLERBACH	  	73/761563	  	Registered	  	1554218	  	2-Nov-1988	  	29-Aug-1989	  	United States	  	xpedx, LLC	
State Trademarks

Trademark	  	Appl. #	  	Status	  	Reg. #	  	File
Date	  	Reg. Date	  	Jurisdiction	  	Owner	
SAALFELD REDISTRIBUTION COMPANY	  		  	Registered (as a trade name)	  	10688500	  		  	29-Feb-2004	  	State of North Dakota	  	xpedx, LLC	
SAALFELD REDISTRIBUTION COMPANY	  		  	Registered (as a trade name)	  	2004-462658	  		  	25-Feb-2004	  	State of Wyoming	  	xpedx, LLC	
xpedx	  		  	Registered (as a trade name)	  	10073389	  		  	06-Jul-2005	  	State of Nebraska	  	xpedx, LLC	
xpedx	  		  	Registered (as a trade name)	  	13228300	  		  	27-Mar-2003	  	State of North Dakota	  	xpedx, LLC	
ZELLERBACH	  		  	Registered (as a trade name)	  	2005-00494725	  		  	16-Jun-2005	  	State of Wyoming	  	xpedx, LLC	
 
41

Trademark Applications
United States Trademarks

Trademark	  	Appl. #	  	Status	  	Reg. #	  	File Date	  	Reg. Date	  	Jurisdiction	  	Owner	
BE WELL	  	86/104420	  	Pending	  		  	29-Oct-2013	  		  	United States	  	xpedx, LLC	
MAKE PRINT HAPPEN	  	86/104384	  	Pending	  		  	29-Oct-2013	  		  	United States	  	xpedx, LLC	
RELIABLE	  	86/094165	  	Pending	  		  	17-Oct-2013	  		  	United States	  	xpedx, LLC	
RELIABLE	  	86/162553	  	Pending	  		  	10-Jan-2014	  		  	United States	  	xpedx, LLC	
SPRING GROVE	  	86/158869	  	Pending	  		  	7-Jan-2014	  		  	United States	  	xpedx, LLC	
TUFFLEX	  	86/104464	  	Pending	  		  	29-Oct-2013	  		  	United States	  	xpedx, LLC	
WHAT TO GROW	  	85/733016	  	Pending	  		  	19-Sep-2012	  		  	United States	  	xpedx, LLC	
VERITIV	  	86/281798	  	Pending	  		  	15-May-2014	  		  	United States	  	xpedx, LLC	
VERITIV	  	86/281807	  	Pending	  		  	15-May-2014	  		  	United States	  	xpedx, LLC	
VERITIV	  	86/281822	  	Pending	  		  	15-May-2014	  		  	United States	  	xpedx, LLC	
VERITIV	  	86/281828	  	Pending	  		  	15-May-2014	  		  	United States	  	xpedx, LLC	
VERITIV	  	86/281833	  	Pending	  		  	15-May-2014	  		  	United States	  	xpedx, LLC	
VERITIV	  	86/281841	  	Pending	  		  	15-May-2014	  		  	United States	  	xpedx, LLC	
VERITIV	  	86/281849	  	Pending	  		  	15-May-2014	  		  	United States	  	xpedx, LLC	
VERITIV	  	86/281853	  	Pending	  		  	15-May-2014	  		  	United States	  	xpedx, LLC	
Common Law Trademarks

Trademark	  	Appl. #	  	Status	  	Reg. #	  	File Date	  	Reg. Date	  	Jurisdiction	  	Owner	
MAKING BUSINESS BETTER	  		  	Common Law	  		  		  		  	United States	  	xpedx, LLC	
PACKAGE DESIGN AND ENGINEERING	  		  	Common Law	  		  		  		  	United States	  	xpedx, LLC	
SHOWCASE	  		  	Common Law	  		  		  		  	United States	  	xpedx, LLC	
THE PERFECT ORDER	  		  	Common Law	  		  		  		  	United States	  	xpedx, LLC	
 
42

3.	Copyrights	
Unisource Worldwide, Inc.

Country	  	Title	  	Registration
No.	  	Registration
Date	  	Current Owner	
U.S.	  	Our destination : deliver the best value every time	  	TX0006505943	  	9/5/2006	  	Unisource Worldwide, Inc.	
U.S.	  	Unisource transportation expense and asset management system (TEAM)	  	Txu001110740	  	5/22/2003	  	Unisource Worldwide, Inc.	
U.S.	  	Unisource … annual report	  	TX0004443349	  	1/2/1997	  	Unisource Worldwide, Inc.	
U.S.	  	SMART program : source code	  	TXu000754655	  	8/15/1996	  	Unisource Worldwide, Inc.	
U.S.	  	Dashboard measurements : owner’s manual for operational excellence	  	TXu001029956	  	6/11/2001	  	Unisource Worldwide, Inc.	
U.S.	  	INTEG.PRG / O. Palumbo, Jr., & R. Milazzo	  	TX0004786394	  	4/27/1998	  	Unisource Worldwide, Inc.	
U.S.	  	Welcome to Unisource Worldwide, Inc.	  	TX0004688089	  	12/23/1997	  	Unisource Worldwide, Inc.	
U.S.	  	Websource web finder.	  	TXu000239444	  	5/19/1986	  	Paper Corporation of America *	
U.S.	  	RourkeEno direct connect.	  	TX0003470690	  	7/6/1992	  	Paper Corporation of America *	
U.S.	  	Dictionary of graphic arts terms / [compiled and designed by Kathleen M. Jackson].	  	TX0001832041	  	3/18/1986	  	Paper Corporation of America *	
 
*	To be updated in U.S. Copyright Office. Paper Corporation of America is a prior name of Unisource Worldwide, Inc.	
xpedx

Country	  	Title	  	Registration
No.	  	Registration
Date	  	Publication Date/ Year of
Creation	  	Owner	
U.S.	  	xpedx Supplier Scorecard Analysis	  	TX0007543216	  	5/21/2012	  	3/31/2012	  	xpedx, LLC	
U.S.	  	xpedx Supplier Sustainability Report	  	TX0007543219	  	5/21/2012	  	3/31/2012	  	xpedx, LLC	
 
43

Material Registered Patent, Copyright, and Trademark Licenses
 
1.	Material Patent Licenses	
Unisource Worldwide, Inc.
 
•	 	Amended and Restated License Agreement dated August 1, 2012 between Smart Planet Technologies, Inc. and Unisource Worldwide, Inc. regarding use of EarthBoard and related marks and patented technology.	
 
•	 	Sublicense Agreement dated May 21, 2012 between Quickbox, LLC and Unisource Worldwide, Inc. regarding use of certain patent rights.	
 
•	 	Patent License Agreement dated September 1, 2011 between Webvention LLC and Unisource Worldwide, Inc. regarding use of certain patent rights.	
 
•	 	Settlement & License Agreement dated August 23, 2001 between Georgia-Pacific Corporation and Lemelson Medical, Education and Research Foundation Limited Partnership (“ Lemelson ”) wherein Georgia-Pacific Corporation has a non-exclusive license agreement with Lemelson covering use of “machine version” and “auto identification” equipment. The agreement permits Georgia-Pacific Corporation to provide rights to entities it divests.	
 
•	 	Patent Sublicense Agreement dated November 2002 between Unisource Worldwide, Inc. and Georgia-Pacific Corporation regarding sublicense of Lemelson Medical, Education and Research Foundation Limited Partnership U.S. patents covering use of “machine vision” and “auto identification” equipment.	
 
•	 	Patent Settlement Agreement dated June 22, 2012 between Lantech.com, LLC, Arpac, L.P. and Unisource Worldwide, Inc. regarding infringement of Lantech patents on certain stretch wrapping-related devices.	
 
•	 	License Agreement dated January 1, 2004 between Unisource Worldwide, Inc. and Unisource Canada, Inc. regarding intercompany license of intellectual property rights.	
xpedx
None.
 
2.	Material Trademark Licenses	
Unisource Worldwide, Inc.
 
•	 	Letter of Understanding dated May 20, 2013 between Domtar and Unisource regarding Whitehall brand.	
 
•	 	Letter of Understanding dated May 20, 2013 between Domtar and Unisource regarding Starbrite Opaque brand.	
 
•	 	License Agreement dated August 30, 2011 between TerraChoice Group Inc. and Unisource Worldwide, Inc. regarding use of EcoLogo marks on certain products.	
 
44

•	 	Various private brand supplier agreements in which Unisource contracts for the manufacture of products bearing Unisource trademarks.	
 
•	 	Other agreements related to third party certification marks used in connection with certain products – i.e., FSC.	
 
•	 	Trademark Agreement dated May 6, 2005 between Buckeye International, Inc. and Unisource Worldwide, Inc. regarding phase out of LIBERATE by Unisource Worldwide, Inc. for use with a degreaser product.	
 
•	 	Consent Agreement dated as of April 27, 2005 among BRT, Inc., Unisource Worldwide, Inc., Unisource Canada, Inc. and Nordic Paper AS limiting use of NORDICPAPER by Nordic Paper AS for grease proof paper products, and related notice dated June 2, 2005 from the United States Patent and Trademark Office.	
 
•	 	Settlement agreement dated October 26, 1999 between BRT, Inc. and Grupo Unisource et al. pertaining to title and use of the mark UNISOURCE, wherein Grupo Unisource ceased using the mark.	
 
•	 	Settlement Agreement dated March 26, 1999 between Unisource Worldwide, Inc. et al. and Unisource Business Products, Inc. (“UBP”) et al. concerning UBP’s use of the mark UNISOURCE.	
 
•	 	Settlement Agreement dated November 12, 1998 between Ashland Chemicals Co. (“Ashland”) and Unisource Worldwide, Inc. and BRT, Inc. concerning Ashland’s use of ONE SOURCE, MANY SOLUTIONS.	
 
•	 	Agreement dated August 3, 1994 between Unisource Inc. (“UI”) and Unisource Worldwide, Inc. (“UWW”) corresponding to a preliminary injunction granted in Cause No. 94-CV-01235 (USDC E. Missouri) to UWW against UI ordering UI to cease use of the name UNISOURCE.	
 
•	 	Final Judgment Upon Consent dated April 17, 2000 permanently enjoining David Pressley d/b/a Paperplus from further use of “ www.paperplus.com ” website.	
 
•	 	License Agreement dated January 1, 2004 between Unisource Worldwide, Inc. and Unisource Canada, Inc. regarding intercompany license of intellectual property rights.	
xpedx
 
•	 	Exclusive license of ARVEY trademark and arveystores.com and arveystores.net domain names to TJMJ, Inc.	
 
3.	Material Copyright Licenses	
Unisource Worldwide, Inc.
 
•	 	Letter Agreement between Georgia-Pacific Corporation and Unisource Worldwide, Inc., dated February 25, 2005 regarding use of copyrighted materials known as the Leased Systems Cost and Use Calculator.	
 
45

•	 	Source Code License Agreement dated June 8, 2006 between Unisource Worldwide, Inc. and Syngistix, Inc. (for purchase of customized source code to SFD/Unibuy warehouse management application).	
 
•	 	Source Code License Option Exercise and Transition Services Agreement effective February 12, 2013 between Unisource and Donachie Fenton & Associates, Inc. (for purchase of customized source code to the DLOC+/WMS warehouse management application).	
 
•	 	Oracle Corp., Software License and Services Agreement dated June 26, 1997 (as amended and supplemented via ordering documents) for Oracle Database Enterprise Edition, Partitioning, and Discoverer Desktop Edition, and Hyperion (ERP).	
 
•	 	Salesforce.com, Inc. - Master Subscription Agreement effective February 1, 2009, as amended and supplemented via ordering documents).	
 
•	 	License Agreement dated January 1, 2004 between Unisource Worldwide, Inc. and Unisource Canada, Inc. regarding intercompany license of intellectual property rights.	
 
•	 	Microsoft Enterprise Agreement, Enterprise Enrollment (Direct), and Enterprise Amendment, effective February 1, 2013, agreement number E1936030.	
xpedx
None.
 
46

Schedule 6
Commercial Tort Claims
None.
 
47

Schedule 7
Letter-of-Credit Rights
None.
 
1

Annex 1 to
U.S. Guarantee and Collateral Agreement
ACKNOWLEDGEMENT AND CONSENT 2
The undersigned hereby acknowledges receipt of a copy of the U.S. Guarantee and Collateral Agreement, dated as of July [ — ], 2014 (the “ Agreement ”; capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Agreement or the ABL Credit Agreement referred to therein, as the case may be), made by the U.S. Granting Parties party thereto in favor of Bank of America, N.A., as Administrative Agent and ABL Collateral Agent. The undersigned agrees for the benefit of the Administrative Agent and the Lenders as follows:
The undersigned will be bound by the terms of the Agreement applicable to it as an Issuer (as defined in the Agreement) and will comply with such terms insofar as such terms are applicable to the undersigned as an Issuer.
The undersigned will notify the ABL Collateral Agent promptly in writing of the occurrence of any of the events described in subsection 5.3.1 of the Agreement.
The terms of subsections 6.3(c) and 6.7 of the Agreement shall apply to it, mutatis mutandis , with respect to all actions that may be required of it pursuant to subsection 6.3(c) or 6.7 of the Agreement.

[NAME OF ISSUER]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
Address for Notices:	

 	

2  	This consent is necessary only with respect to any Issuer that is not also a U.S. Granting Party.	
 
Annex 1-1

Annex 2 to
U.S. Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT, dated as of [            ] [    ], 20[    ], made by [                                        ], a [                    ] corporation (the “ Additional U.S. Granting Party ”), in favor of BANK OF AMERICA, N.A., as collateral agent (in such capacity, the “ ABL Collateral Agent ”) and as administrative agent (in such capacity, the “ Administrative Agent ”) for the banks and other financial institutions from time to time party to the ABL Credit Agreement referred to below and the other Secured Parties (as defined in the U.S. Guarantee and Collateral Agreement). All capitalized terms not defined herein shall have the meaning ascribed to them in such U.S. Guarantee and Collateral Agreement referred to below, or if not defined therein, in the ABL Credit Agreement.
W I T N E S S E T H :
WHEREAS, XPEDX INTERMEDIATE, LLC, a Delaware limited liability company (together with its successors and assigns, the “ Parent Borrower ”), XPEDX, LLC, a New York limited liability company, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), the Administrative Agent, the ABL Collateral Agent, and the other parties thereto are parties to an ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”);
WHEREAS, in connection with the ABL Credit Agreement, VERITIV CORPORATION, a Delaware corporation (“ Holding ”), the Parent Borrower, and certain of the Parent Borrower’s Subsidiaries are, or are to become, parties to the U.S. Guarantee and Collateral Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ U.S. Guarantee and Collateral Agreement ”), in favor of the ABL Collateral Agent, for the benefit of the Secured Parties (as defined in the U.S. Guarantee and Collateral Agreement);
WHEREAS, the Additional U.S. Granting Party is a member of an affiliated group of companies that includes the Parent Borrower and each other U.S. Granting Party; the proceeds of the extensions of credit under the ABL Credit Agreement will be used in part to enable the Parent Borrower to make valuable transfers to one or more of the other U.S. Granting Parties (including the Additional U.S. Granting Party) in connection with the operation of their respective businesses; and the Parent Borrower and the other U.S. Granting Parties (including the Additional U.S. Granting Party) are engaged in related businesses, and each such U.S. Granting Party (including the Additional U.S. Granting Party) will derive substantial direct and indirect benefit from the making of the extensions of credit under the ABL Credit Agreement;
WHEREAS, the ABL Credit Agreement requires the Additional U.S. Granting Party to become a party to the U.S. Guarantee and Collateral Agreement; and
WHEREAS, the Additional U.S. Granting Party has agreed to execute and deliver this Assumption Agreement in order to become a party to the U.S. Guarantee and Collateral Agreement;
 
Annex 2-1

NOW, THEREFORE, IT IS AGREED:
1. U.S. Guarantee and Collateral Agreement . By executing and delivering this Assumption Agreement, the Additional U.S. Granting Party, as provided in subsection 9.15 of the U.S. Guarantee and Collateral Agreement, hereby becomes a party to the U.S. Guarantee and Collateral Agreement as a U.S. Granting Party thereunder with the same force and effect as if originally named therein as a [U.S. Guarantor] [U.S. Grantor and U.S. Pledgor] [and U.S. Grantor] [and U.S. Pledgor] 3 and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a [U.S. Guarantor] [U.S. Grantor and U.S. Pledgor] [and U.S. Grantor] [and U.S. Pledgor] 4 thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules [                    ] to the U.S. Guarantee and Collateral Agreement, and such Schedules are hereby amended and modified to include such information. The Additional U.S. Granting Party hereby represents and warrants that each of the representations and warranties of such Additional U.S. Granting Party, in its capacities as a [U.S. Guarantor] [U.S. Grantor and U.S. Pledgor] [and U.S. Grantor] [and U.S. Pledgor], 5 contained in Section 4 of the U.S. Guarantee and Collateral Agreement is true and correct in all material respects on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. Each Additional U.S. Granting Party hereby grants, as and to the same extent as provided in the U.S. Guarantee and Collateral Agreement, to the ABL Collateral Agent, for the benefit of the Secured Parties, a continuing security interest in the [Collateral (as such term is defined in subsection 3.1 of the U.S. Guarantee and Collateral Agreement) of such Additional U.S. Granting Party] [and] [the Pledged Collateral (as such term is defined in the U.S. Guarantee and Collateral Agreement) of such Additional U.S. Granting Party, except as provided in subsection 3.3 of the U.S. Guarantee and Collateral Agreement].
2. GOVERNING LAW . THIS ASSUMPTION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

3  	Indicate the capacities in which the Additional U.S. Granting Party is becoming a U.S. Grantor.	
4  	Indicate the capacities in which the Additional U.S. Granting Party is becoming a U.S. Grantor.	
5  	Indicate the capacities in which the Additional U.S. Granting Party is becoming a U.S. Grantor.	
 
Annex 2-2

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL U.S. GRANTING PARTY]	
		
By:	 	 	
	 	Name:	
	 	Title:	

Acknowledged and Agreed to as of the date hereof by:	
	
BANK OF AMERICA, N.A.,
as ABL Collateral Agent and Administrative Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
Annex 2-3

Annex 3 to
U.S. Guarantee and Collateral Agreement
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT, dated as of [            ] [    ], 20[    ], made by [                                        ], a [                    ] corporation (the “ Additional U.S. Pledgor ”), in favor of BANK OF AMERICA, N.A., as collateral agent (in such capacity, the “ ABL Collateral Agent ”) and as administrative agent (in such capacity, the “ Administrative Agent ”) for the banks and other financial institutions from time to time party to the ABL Credit Agreement referred to below and the other Secured Parties (as defined in the U.S. Guarantee and Collateral Agreement). All capitalized terms not defined herein shall have the meaning ascribed to them in such U.S. Guarantee and Collateral Agreement referred to below, or if not defined therein, in the ABL Credit Agreement.
W I T N E S S E T H :
WHEREAS, XPEDX INTERMEDIATE, LLC a Delaware limited liability company (together with its successors and assigns, the “ Parent Borrower ”), XPEDX, LLC, a New York limited liability company, the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), the Administrative Agent, the Collateral Agent, and the other parties thereto are parties to an ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”);
WHEREAS, in connection with the ABL Credit Agreement, VERITIV CORPORATION, a Delaware corporation (“ Holding ”), the Parent Borrower and certain of the Parent Borrower’s Subsidiaries are, or are to become, parties to the U.S. Guarantee and Collateral Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ U.S. Guarantee and Collateral Agreement ”), in favor of the ABL Collateral Agent, for the benefit of the Secured Parties (as defined in the U.S. Guarantee and Collateral Agreement);
WHEREAS, the ABL Credit Agreement requires the Additional U.S. Pledgor to become a U.S. Pledgor under the U.S. Guarantee and Collateral Agreement with respect to Capital Stock of certain new Subsidiaries of the Additional U.S. Pledgor; and
WHEREAS, the Additional U.S. Pledgor has agreed to execute and deliver this Supplemental Agreement in order to become such a U.S. Pledgor under the U.S. Guarantee and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. U.S. Guarantee and Collateral Agreement . By executing and delivering this Supplemental Agreement, the Additional U.S. Pledgor, as provided in subsection 9.15 of the U.S. Guarantee and Collateral Agreement, hereby becomes a U.S. Pledgor under the U.S. Guarantee and Collateral Agreement with respect to the shares of Capital Stock of the Subsidiary of the Additional U.S. Pledgor listed in Annex 1-A hereto, and will be bound by all terms, conditions and duties applicable to a U.S. Pledgor under the U.S. Guarantee and Collateral Agreement, as a U.S. Pledgor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedule 2 to the U.S. Guarantee and Collateral Agreement, and such Schedule 2 is hereby amended and modified to include such information.
 
1-A-1 to Annex 3

2. GOVERNING LAW . THIS SUPPLEMENTAL AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
 
1-A-2 to Annex 3

IN WITNESS WHEREOF, the undersigned has caused this Supplemental Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL U.S. PLEDGOR]	
		
By:	 	 	
	 	Name:	
	 	Title:	

Acknowledged and Agreed to as of the date hereof by:
 
BANK OF AMERICA, N.A.,
as ABL Collateral Agent and Administrative Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
1-A-3 to Annex 3

Annex 4 to
U.S. Guarantee and Collateral Agreement
JOINDER AND RELEASE
JOINDER AND RELEASE, dated as of [                 ], [        ] (this “ Joinder ”) by and among [                    ] (“ Assignor ”), [                    ] (“ Assignee ”) and BANK OF AMERICA, N.A., as collateral agent (in such capacity, the “ ABL Collateral Agent ”) and as administrative agent (in such capacity, the “ Administrative Agent ”) for the banks and other financial institutions from time to time parties to the Credit Agreement referred to below and for the other Secured Parties (as defined below). All capitalized terms not defined herein shall have the meanings ascribed to them in the U.S. Guarantee and Collateral Agreement referred to below.
W I T N E S S E T H :
WHEREAS, XPEDX INTERMEDIATE, LLC a Delaware limited liability company (together with its successors and assigns, the “ Parent Borrower ”), XPEDX, LLC, a New York limited liability company (together with its successors and assigns, the “ OpCo Borrower ”), the several banks and other financial institutions from time to time party thereto (the “ Lenders ”), the Administrative Agent, the ABL Collateral Agent, and the other parties thereto are parties to an ABL Credit Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”);
WHEREAS, in connection with the ABL Credit Agreement, Assignor (as the direct parent of the Parent Borrower), the Parent Borrower and certain other subsidiaries of the Parent Borrower entered into the U.S. Guarantee and Collateral Agreement, dated as of July [ — ], 2014 (the “ U.S. Guarantee and Collateral Agreement ”) by and among Assignor, the Parent Borrower, certain of the Parent Borrower’s Subsidiaries and the ABL Collateral Agent, pursuant to which, among other things, they agreed to jointly and severally, unconditionally and irrevocably, guarantee all of the obligations of the Parent Borrower under the ABL Credit Agreement and grant security interests in and pledge property and assets, including the Pledged Collateral, in favor of the ABL Collateral Agent, for the benefit of the Secured Parties;
WHEREAS, Assignee is acquiring from Assignor all of the Capital Stock of the Parent Borrower;
WHEREAS, in connection therewith, subsection 9.16(e) of the U.S. Guarantee and Collateral Agreement requires Assignee to assume all of the obligations of Assignor under the U.S. Guarantee and Collateral Agreement and the other Loan Documents to which Assignor is a party; and
WHEREAS, upon the assumption of Assignor’s obligations by Assignee, the Assignor shall be automatically released from its obligations under the U.S. Guarantee and Collateral Agreement and any other instrument or document furnished pursuant thereto, and pursuant to subsection 9.16(e) of the U.S. Guarantee and Collateral Agreement the ABL Collateral Agent shall, among other things, take such actions as may be reasonably requested to evidence such release.
 
Annex 4-1

NOW, THEREFORE, IT IS AGREED:
 
4.	By executing and delivering this Joinder, Assignee hereby expressly assumes all of the obligations of Assignor under the U.S. Guarantee and Collateral Agreement and each other Loan Document to which Assignor is a party and agrees that it will be bound by the provisions of the U.S. Guarantee and Collateral Agreement and such other Loan Documents. Pursuant to subsection 9.16(e) of the U.S. Guarantee and Collateral Agreement, Assignee hereby succeeds to, and is substituted for, and shall exercise every right and power of, Assignor under the U.S. Guarantee and Collateral Agreement and the other Loan Documents to which Assignor is a party, and shall be thereafter be deemed to be “Holding” for purposes of the U.S. Guarantee and Collateral Agreement and the other Loan Documents and a “U.S. Guarantor,” “U.S. Granting Party” and “U.S. Pledgor” for purposes of the U.S. Guarantee and Collateral Agreement as if originally named therein and the Assignor is hereby expressly, irrevocably and unconditionally discharged from all debts, obligations, covenants and agreements under the U.S. Guarantee and Collateral Agreement and the other Loan Documents to which it is a party. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules [            ] to the U.S. Guarantee and Collateral Agreement, and such Schedules are hereby amended and modified to include such information.	
 
5.	The ABL Collateral Agent hereby confirms and acknowledges the release of Assignor from its Guarantee and all other obligations under the U.S. Guarantee and Collateral Agreement and all other obligations thereunder and under the other Loan Documents.	
 
6.	The ABL Collateral Agent hereby confirms and acknowledges that the Lien pursuant to the U.S. Guarantee and Collateral Agreement on all Security Collateral of Assignor, and any Lien pursuant to any other Loan Document on the property or assets of Assignor, has been automatically released.	
 
7.	Assignee hereby represents and warrants that each of the representations and warranties made by Assignee, in its capacity as a U.S. Guarantor, U.S. Grantor and U.S. Pledgor, in each case solely with respect to the representations and warranties made by Holding, contained in Section 4 of the U.S. Guarantee and Collateral Agreement is true and correct in all material respects on and as the date hereof (after giving effect to this Joinder Agreement) as if made on and as of such date. Assignee hereby grants, as and to the same extent as provided in the U.S. Guarantee and Collateral Agreement, to the ABL Collateral Agent, for the benefit of the Secured Parties, a continuing security interest in the Pledged Collateral (as such term is defined in the U.S. Guarantee and Collateral Agreement) of Assignee, except as provided in subsection 3.3 of the U.S. Guarantee and Collateral Agreement and with the limitations as applicable to Holding.	
 
8.	GOVERNING LAW . THIS JOINDER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.	
 
Annex 4-2

IN WITNESS WHEREOF, the undersigned has caused this Joinder to be duly executed and delivered as of the date first above written.

[ASSIGNOR]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[ASSIGNEE]	
		
By:	 	 	
	 	Name:	
	 	Title:	
		
	 	Acknowledged and Agreed to as of the date hereof by:	
		
	 	BANK OF AMERICA, N.A.
as ABL Collateral Agent and Administrative Agent	
			
	 	By:	 	 	
	 		 	Name:	
	 		 	Title:	
 
Annex 4-3

Exhibit 10.10
VERITIV CORPORATION
DIRECTOR INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of this     day of             , 2014, by and between Veritiv Corporation, a Delaware corporation (the “Corporation”), and                      (“Indemnitee”).
RECITALS:
The Corporation and Indemnitee recognize the substantial increase in corporate litigation in general, subjecting corporate directors to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited. The Corporation desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve as directors of the Corporation and to indemnify its directors so as to provide them with the maximum protection permitted by law.
The Corporation and Indemnitee, intending to be legally bound, hereby agree as follows:
Section 1. Limitation of Liability.
(a) To the fullest extent permitted by the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”) as it now exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader exculpation rights than permitted prior thereto), Indemnitee shall not be liable to the Corporation or its stockholders for monetary damages arising from a breach of fiduciary duty as a director.
(b) Any repeal or modification of subparagraph (a) of this Section 1 of this Agreement shall not adversely affect any right or protection of a director existing hereunder with respect to any act or omission occurring at or prior to the time of such repeal or modification.
Section 2. Right to Indemnification.
(a) In the event that Indemnitee was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (whether threatened or actual, hereinafter a “Proceeding”), by reason of the fact: (i) that Indemnitee or a person of whom Indemnitee is the legal representative is or was or has agreed to become a director of the Corporation, including service with respect to an employee benefit plan (including any settlor capacity), (ii) that Indemnitee is or was a director or officer of International Paper Company, a New York corporation (“International Paper”) or UWW Holdings, Inc., a Delaware corporation (“UWWH”) or any of their respective subsidiaries, in each case acting on behalf of or for the benefit of the Corporation, including service with respect to an employee benefit plan (including any settlor capacity) or (iii) Indemnitee is or was

serving or has agreed to serve at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such Proceeding is action alleged to have been taken or omitted in an official capacity as a director or officer, or in any other capacity while serving or having agreed to serve as a director, officer, employee, agent or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by this Agreement and the DGCL in effect on the date hereof or as amended to increase the scope of permitted indemnification, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 4 of this Agreement with respect to Proceedings to enforce rights to indemnification, the Corporation shall indemnify Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the board of directors of the Corporation (“Board of Directors”). For avoidance of doubt and solely for purposes of the preceding clause (ii) of this Section 2, “Corporation” shall specifically include Indemnitee’s service to International Paper and any of its affiliates engaged in the business segment referred to in International Paper’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 as “xpedx”.
(b) Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for a portion of any expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) incurred by Indemnitee, but not for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for such portion.
Section 3. Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 2 of this Agreement, an Indemnitee shall to the fullest extent not prohibited by the DGCL in effect on the date hereof or as amended to increase the scope of permitted advancement, have the right to be paid by the Corporation the expenses (including attorneys’ fees) incurred in defending any such Proceeding in advance of its final disposition and without regard to whether Indemnitee will ultimately be entitled to be indemnified for such expenses (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement of expenses shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 3 of this Agreement or otherwise.
 
2

Section 4. Procedure for Indemnification.
(a) Any claim for indemnification or advancement of expenses (including attorneys’ fees, costs and charges) under Sections 2 and 3 of this Agreement shall be made promptly, and in any event within forty-five days (or, in the case of an advance of expenses, twenty days, provided that the undertaking contemplated by Section 3 of this Agreement, if required, has been delivered to the Corporation), upon the written request of the Indemnitee. If any claim for indemnification is not paid in full within 45 days or any claim for advancement of expenses is not paid in full within 20 days, the Indemnitee shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of the claim in the Court of Chancery (as defined in Section 13 of this Agreement). Such Indemnitee’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any action by an Indemnitee for indemnification or the advance of expenses (other than an action brought to enforce a claim for the advance of expenses where the undertaking required pursuant to Section 3 of this Agreement, if any, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because such person has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall create a presumption that the claimant has not met the applicable standard of conduct.
(b) Determination. In no event shall a determination be required in connection with advancement of expenses pursuant to Section 3 or in connection with indemnification for expenses incurred as a witness or incurred in connection with any Proceeding or portion thereof with respect to which Indemnitee has been successful on the merits or otherwise. In the event that any action, claim or Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or Proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or Proceeding.
(c) Presumptions; Burden of Proof. In connection with any determination, or any review of any determination, by any person, including a court:
(i) It shall be a presumption that Indemnitee has met the applicable standard of conduct and that indemnification of Indemnitee is proper in the circumstances.
 
3

(ii) The burden of proof shall be on the Corporation to overcome the presumptions set forth in the preceding clause (i) and such presumptions shall only be overcome if the Corporation establishes that there is no reasonable basis to support them.
(iii) The termination of any Proceeding by judgment, order, finding, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that indemnification is not proper or that Indemnitee did not meet the applicable standard of conduct or that a court has determined that indemnification is not permitted by this Agreement or otherwise.
Section 5. Other Indemnification and Insurance/Priority of Payments. The Corporation acknowledges that Indemnitee has certain rights to: (i) indemnification and/or advancement of expenses provided by International Paper and/or certain of its affiliates or UWWH, and/or certain of its affiliates and/or (ii) insurance provided to International Paper and/or certain of its affiliates or UWWH and/or certain of its affiliates (collectively, the “Other Indemnitors”). The Corporation hereby agrees that, solely with respect to actions related to the Corporation, (A) it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Other Indemnitors to advance expenses or to provide indemnification or insurance for the same expenses or liabilities incurred by Indemnitee are secondary), (B) it shall be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement, without regard to any rights Indemnitee may have against the Other Indemnitors, and (C) it irrevocably waives, relinquishes and releases the Other Indemnitors from any and all claims against the Other Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Corporation further agrees that no advancement or payment by the Other Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Corporation shall affect the foregoing and the Other Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Corporation.
Section 6. Insurance. The Corporation may purchase and maintain insurance on its own behalf and on behalf of Indemnitee in the Indemnitee’s capacity as a director, officer, employee or agent, including for the benefit of Indemnitee if Indemnitee is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust, association or other enterprise against any expense, liability or loss asserted against Indemnitee and incurred by Indemnitee in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify Indemnitee against such expenses, liability or loss under the DGCL.
Section 7. Service for Subsidiaries. Any Indemnitee serving, or who has served, as a director, officer, trustee or employee of another corporation or of a partnership, joint venture, limited liability company, trust, association or other enterprise, at least 50% of
 
4

whose equity interests or assets are owned, directly or indirectly, by the Corporation (a “subsidiary” under this Agreement) shall be conclusively presumed to be, or to have been, serving in such capacity at the request of the Corporation.
Section 8. Reliance. Indemnitee shall be conclusively presumed to have relied on the rights to indemnity, advancement of expenses and other rights contained in this Agreement in entering into or continuing such service. The rights to indemnification and to the advance of expenses conferred in this Agreement shall apply to claims made against an Indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.
Section 9. Nature of Rights. The rights conferred upon Indemnitee in this Agreement shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer or trustee and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.
Section 10. Nonexclusivity. The provisions of this Agreement shall be in addition to and not in limitation of any other rights, indemnities, or limitations of liability to which Indemnitee may now or in the future be entitled, as a matter of law or under the Corporation’s Certificate of Incorporation, any by-law, agreement, vote of stockholders or disinterested directors or otherwise. All rights to indemnification under this Agreement shall be deemed to be a contract between the Corporation and Indemnitee.
Section 11. Savings Clause. If this Agreement or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and advance expenses to Indemnitee as to all expense, liability and loss (including attorneys’ fees and related disbursements, judgments, fines, ERISA excise taxes and penalties, penalties and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such person and for which indemnification or advancement of expenses is available to such person pursuant to this Agreement to the fullest extent permitted by any applicable portion of this Agreement that shall not have been invalidated.
Section 12. Definition. For purposes of this Agreement, references to the “Corporation” shall include, in addition to the Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger, including without limitation, prior to (or, in the case of an entity specifically designated in a resolution of the Board of Directors, after) the effective date of this Agreement and which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Agreement with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
 
5

Section 13. Jurisdiction. The Court of Chancery of the State of Delaware (the “Court of Chancery”) shall have exclusive jurisdiction to hear and determine all actions for indemnification or advancement of expenses brought with respect to this Agreement, and the Court of Chancery may summarily determine the Corporation’s obligation to advance expenses (including attorneys’ fees) under this Agreement.
Section 14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original. Any facsimile copies hereof or signature hereon shall, for all purposes, be deemed originals.
Section 15. Successors and Assigns. This Agreement shall be binding upon the Corporation and its successors and assigns, including without limitation any acquiror of all or substantially all of the Corporation’s assets or business and any survivor of any merger or consolidation to which the Corporation is party, and shall inure to the benefit of the Indemnitee and shall inure to the benefit of Indemnitee and Indemnitee’s estate, spouses, heirs, executors, personal or legal representatives, administrators and assigns. The Corporation shall require and cause any such successor or assignee, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement as if it were named as the Corporation herein, and the Corporation shall not permit any such purchase of assets or business, acquisition of securities or merger or consolidation to occur until such written agreement has been executed and delivered. No such assumption and agreement shall relieve the Corporation of any of its obligations hereunder, and this Agreement shall not otherwise be assignable by the Corporation.
Section 16. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if given by overnight courier or personal delivery, on the date of receipt or (ii) if sent by telecopier (with receipt confirmed), on the date of such receipt. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice and in the case of notices to the Corporation shall be marked for the attention of the General Counsel.
Section 17. Choice of Law. This Agreement shall be construed in accordance with and governed by the internal laws of the State of Delaware applicable to contracts executed and fully performed within the State of Delaware, without regard to the conflict of law principles thereof.
Section 18. Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by all the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.
 
6

Section 19. Non-Circumvention. The Corporation shall not seek or agree to any order of any court or other governmental authority that would prohibit or otherwise interfere, and shall not take or fail to take any other action if such action or failure would reasonably be expected to have the effect of prohibiting or otherwise interfering, with the performance of the Corporation’s indemnification, advancement or other obligations under this Agreement.
Section 20. Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto, provided that the provisions hereof shall not supersede the provisions of the Corporation’s Certificate of Incorporation, Bylaws or other organizational agreement or instrument, any other agreement, any vote of stockholders or directors, the DGCL or other applicable law, to the extent any such provisions shall be more favorable to Indemnitee than the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

Veritiv Corporation	
		
By:	 	 	
Name:	 		
Title:	 		
		
Address:	 		

AGREED TO AND ACCEPTED:	
INDEMNITEE:	

Name:	
Address:	
 
7

Exhibit 10.11

 
FORM OF
CANADIAN GUARANTEE AND COLLATERAL AGREEMENT
made by
UNISOURCE CANADA, INC.
and
the Canadian Guarantors,
in favour of
BANK OF AMERICA, N.A.,
as Administrative Agent and as ABL Collateral Agent
Dated as of July [ — ], 2014

 

TABLE OF CONTENTS

 	 	 	  	Page	 	
			
SECTION 1	 	DEFINED TERMS	  	 	2	  	
1.1	 	Definitions .	  	 	2	  	
1.2	 	Other Definitional Provisions .	  	 	9	  	
			
SECTION 2	 	GUARANTEE	  	 	10	  	
2.1	 	Guarantee .	  	 	10	  	
2.2	 	Right of Contribution .	  	 	11	  	
2.3	 	No Subrogation .	  	 	11	  	
2.4	 	Amendments, etc. with Respect to the Obligations .	  	 	12	  	
2.5	 	Guarantee Absolute and Unconditional .	  	 	12	  	
2.6	 	Reinstatement .	  	 	14	  	
2.7	 	Payments .	  	 	14	  	
			
SECTION 3	 	GRANT OF SECURITY INTEREST	  	 	14	  	
3.1	 	Grant .	  	 	14	  	
3.2	 	Pledged Collateral .	  	 	15	  	
3.3	 	Certain Limited Exceptions .	  	 	15	  	
			
SECTION 4	 	REPRESENTATIONS AND WARRANTIES	  	 	18	  	
4.1	 	Representations and Warranties of Each Canadian Guarantor .	  	 	18	  	
4.2	 	Representations and Warranties of Each Canadian Grantor .	  	 	19	  	
4.3	 	Representations and Warranties of Each Canadian Pledgor .	  	 	22	  	
4.4	 	Representations and Warranties of Each Canadian Granting Party .	  	 	23	  	
			
SECTION 5	 	COVENANTS	  	 	23	  	
5.1	 	Covenants of Each Canadian Guarantor .	  	 	23	  	
5.2	 	Covenants of Each Canadian Grantor .	  	 	23	  	
5.3	 	Covenants of Each Canadian Pledgor .	  	 	27	  	
			
SECTION 6	 	REMEDIAL PROVISIONS	  	 	29	  	
6.1	 	Certain Matters Relating to Accounts .	  	 	29	  	
6.2	 	Communications with Obligors; Canadian Grantors Remain Liable .	  	 	30	  	
6.3	 	Pledged Stock .	  	 	31	  	
6.4	 	Proceeds to Be Turned Over to the ABL Collateral Agent .	  	 	32	  	
6.5	 	Application of Proceeds .	  	 	32	  	
6.6	 	PPSA and Other Remedies .	  	 	32	  	
6.7	 	Registration Rights .	  	 	34	  	
6.8	 	Waiver; Deficiency .	  	 	35	  	
			
SECTION 7	 	THE ABL COLLATERAL AGENT	  	 	35	  	
7.1	 	ABL Collateral Agent’s Appointment as Attorney-in-Fact, etc.	  	 	35	  	
7.2	 	Duty of ABL Collateral Agent .	  	 	37	  	
7.3	 	Financing Statements .	  	 	37	  	
7.4	 	Authority of ABL Collateral Agent .	  	 	38	  	
7.5	 	Right of Inspection .	  	 	38	  	
 
-i-

							
 	 	 	  	Page	 	
			
SECTION 8	 	NON-LENDER SECURED PARTIES	  	 	38	  	
8.1	 	Rights to Collateral .	  	 	38	  	
8.2	 	Appointment of Agent .	  	 	39	  	
8.3	 	Waiver of Claims .	  	 	40	  	
8.4	 	Designation of Non-Lender Secured Parties .	  	 	40	  	
			
SECTION 9	 	MISCELLANEOUS	  	 	40	  	
9.1	 	Amendments in Writing .	  	 	40	  	
9.2	 	Notices .	  	 	41	  	
9.3	 	No Waiver by Course of Conduct; Cumulative Remedies .	  	 	41	  	
9.4	 	Enforcement Expenses; Indemnification .	  	 	41	  	
9.5	 	Successors and Assigns .	  	 	42	  	
9.6	 	Set-Off .	  	 	42	  	
9.7	 	Counterparts .	  	 	42	  	
9.8	 	Severability .	  	 	42	  	
9.9	 	Section Headings .	  	 	42	  	
9.10	 	Integration .	  	 	43	  	
9.11	 	GOVERNING LAW .	  	 	43	  	
9.12	 	Submission to Jurisdiction; Waivers .	  	 	43	  	
9.13	 	Acknowledgments .	  	 	44	  	
9.14	 	WAIVER OF JURY TRIAL .	  	 	44	  	
9.15	 	Additional Canadian Granting Parties .	  	 	44	  	
9.16	 	Releases .	  	 	44	  	
9.17	 	Judgment .	  	 	46	  	
9.18	 	Canadian Amalgamation .	  	 	46	  	
9.19	 	Language .	  	 	46	  	
9.20	 	No Implicit Subordination .	  	 	47	  	
9.21	 	Paramountcy .	  	 	47	  	
SCHEDULES
 
1	Notice Addresses of Canadian Granting Parties	
2	Pledged Securities	
3	Perfection Matters	
4A	Financing Statement Jurisdictions	
4B	Granting Party Information	
5	Intellectual Property	
ANNEXES
 
1	Acknowledgment and Consent of Issuers who are not Canadian Granting Parties	
2	Assumption Agreement	
3	Supplemental Agreement	
 
-ii-

CANADIAN GUARANTEE AND COLLATERAL AGREEMENT
CANADIAN GUARANTEE AND COLLATERAL AGREEMENT, dated as of July [ — ], 2014, made by UNISOURCE CANADA, INC., a Canadian amalgamated corporation (the “ Canadian Borrower ”) and certain Canadian Subsidiaries of the Parent Borrower (as described below) from time to time party hereto (the “ Canadian Guarantors ”), in favour of BANK OF AMERICA, N.A., as ABL Collateral Agent (in such capacity, the “ ABL Collateral Agent ”) and administrative agent (in such capacity, the “ Administrative Agent ”) for the banks and other financial institutions from time to time party to the ABL Credit Agreement (as described below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain ABL Credit Agreement, dated as of the date hereof (as amended, waived, supplemented or otherwise modified from time to time, together with any agreement extending the maturity of, or restructuring, refunding, refinancing or increasing the Indebtedness under such agreement or any successor agreements, the “ ABL Credit Agreement ”), among xpedx Intermediate, LLC (the “ Parent Borrower ”), xpedx, LLC (the “ OpCo Borrower ”), the several Subsidiary Borrowers that are or may become parties thereto, including the Canadian Borrower (together with the Parent Borrower and the OpCo Borrower, the “ Borrowers ”), the Administrative Agent and the ABL Collateral Agent and the other parties party thereto, the Lenders (as defined in subsection 1.1 ) have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the conditions set forth therein;
WHEREAS, the Canadian Borrower is a member of an affiliated group of companies that includes the Canadian Borrower and the Parent Borrower’s other Canadian Subsidiaries that are party hereto and any other Canadian Subsidiaries of the Parent Borrower (other than any Excluded Subsidiary (as defined in the ABL Credit Agreement)) that becomes a party hereto from time to time after the date hereof (such Canadian Subsidiaries together with the Canadian Borrower, collectively, the “ Canadian Granting Parties ”);
WHEREAS, the proceeds of the extensions of credit under the ABL Credit Agreement will be used in part to enable the Canadian Borrower to make valuable transfers to one or more of the other Canadian Granting Parties in connection with the operation of their respective businesses;
WHEREAS, the Canadian Borrower and the other Canadian Granting Parties are engaged in related businesses, and each such Canadian Granting Party will derive substantial direct and indirect benefit from the making of the extensions of credit under the ABL Credit Agreement; and
WHEREAS, it is a condition to the obligation of the Lenders to make their respective extensions of credit under the ABL Credit Agreement that the Canadian Granting Parties shall execute and deliver this Agreement to the ABL Collateral Agent for the benefit of the Secured Parties.

NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent, the ABL Collateral Agent and the Lenders to enter into the ABL Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Canadian Borrower thereunder, each Canadian Granting Party hereby agrees with the Administrative Agent and the ABL Collateral Agent, for the benefit of the Secured Parties (as defined herein), as follows:
SECTION 1 DEFINED TERMS
1.1 Definitions .
(a) Unless otherwise defined herein, terms defined in the ABL Credit Agreement and used herein shall have the meanings given to them in the ABL Credit Agreement, and the following terms that are defined in the PPSA (as defined below and in effect on the date hereof) are used herein as so defined: Certificated Security, Chattel Paper, Consumer Goods, Document of Title, Equipment, Goods, Intangibles, Investment Property, Money, Proceeds, Securities Account, Securities Intermediary, Security, Security Certificate, Security Entitlement and Uncertificated Security.
(b) The following terms shall have the following meanings:
“ ABL Collateral Agent ”: as defined in the preamble hereto.
“ ABL Credit Agreement ”: as defined in the recitals hereto.
“ Accounts ”: all accounts (as defined in the PPSA) of each Canadian Grantor, including, without limitation, all Accounts (as defined in the ABL Credit Agreement) and Accounts Receivable of such Canadian Grantor.
“ Accounts Receivable ”: any right to payment, whether or not earned by performance, for goods sold, leased, licensed, assigned or otherwise disposed, or for services rendered or to be rendered, which is not evidenced by an Instrument or Chattel Paper.
“ Additional Agent ”: any administrative agent, collateral agent, security agent, trustee or other representative, in each case including any successor thereto, for or of any one or more secured parties in respect of any Incurrence of Indebtedness (including under subsection 8.1(a) of the ABL Credit Agreement) that is permitted by the ABL Credit Agreement to be secured by a Lien on the Security Collateral.
“ Adjusted Net Worth ”: of any Canadian Guarantor at any time, the greater of ( x ) $0 and ( y ) the amount by which the fair saleable value of such Canadian Guarantor’s assets on the date of the respective payment hereunder exceeds its debts and other liabilities (including contingent liabilities, but without giving effect to any of its obligations under this Agreement or any other Loan Document).
“ Administrative Agent ”: as defined in the preamble hereto.
“ Agreement ”: this Canadian Guarantee and Collateral Agreement, as the same may be amended, supplemented, waived or otherwise modified from time to time.
“ Applicable Law ”: as defined in subsection 9.8 .
“ Bank Products Affiliate ”: shall mean any Person who ( i ) has entered into a Bank Products Agreement with a Canadian Grantor with the obligations of such Canadian Grantor thereunder being secured by one or more Loan Documents, ( ii ) was an Agent, a Lender or an Affiliate or branch of a Lender on the date hereof, or at the time of entry into such Bank Products Agreement, or on the date hereof, or at the time of the designation referred to in the following clause (iii)  and ( iii ) has been designated by the Parent Borrower for and on behalf of the Canadian Borrower in accordance with subsection 8.4 .
 
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“ Bank Products Agreement ”: any agreement pursuant to which a bank or other financial institution agrees to provide ( i ) treasury services, ( ii ) credit card, merchant card, purchasing card or stored value card services (including, without limitation, processing and other administrative services with respect thereto), ( iii ) cash management services (including, without limitation, controlled disbursements, credit cards, credit card processing services, automated clearinghouse transactions, return items, netting, overdrafts, depository, lockbox, stop payment, electronic funds transfer, information reporting, wire transfer and interstate depository network services) and ( iv ) other similar banking products or services as may be requested by any Canadian Grantor (other than letters of credit and other than loans except indebtedness arising from services described in clauses ( i ) through ( iii ) of this definition).
“ Bankruptcy Case ”: ( i ) Holding or any of its Subsidiaries commencing any case, proceeding or other action ( A ) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship, arrangement or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or ( B ) seeking appointment of a receiver, trustee, custodian, conservator, interim receiver, monitor or other similar official for it or for all or any substantial part of its assets, or Holding or any of its Subsidiaries making a general assignment for the benefit of its creditors; or ( ii ) there being commenced against Holding or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i)  above which ( A ) results in the entry of an order for relief or any such adjudication or appointment or ( B ) remains undismissed, undischarged or unbonded for a period of 60 days.
“ Borrower ”: as defined in the recitals hereto.
“ Borrower Obligations ”: with respect to the Canadian Borrower, the collective reference to all obligations and liabilities of the Canadian Borrower in respect of the unpaid principal of and interest on (including, without limitation, interest and fees accruing after the maturity of the Canadian Facility Revolving Credit Loans and Reimbursement Obligations with respect to Canadian Facility Letters of Credit and interest and fees accruing after (or that would accrue but for) the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Canadian Borrower, whether or not a claim for post-filing or post-petition interest or fees is allowed in such proceeding) the Canadian Facility Revolving Credit Loans and Reimbursement Obligations with respect to Canadian Facility Letters of Credit, and all other obligations and liabilities of the Canadian Borrower to the Secured Parties, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the ABL Credit Agreement, the Canadian Facility Revolving Credit Loans, the Canadian Facility Letters of Credit, this Agreement, the other Loan Documents, any Hedging Agreement entered into with any Hedging Affiliate or any Bank Products Agreement entered into with any Bank Products Affiliate, in each case whether on account of principal, interest, reimbursement obligations, amounts payable in connection with any such Bank Products Agreement or termination of any transaction entered into pursuant to any such Interest Rate Agreement, fees, indemnities, costs, expenses or otherwise (including, without limitation, all reasonable fees, expenses and disbursements of counsel to the Administrative Agent or any other Secured Party that are required to be paid by the Canadian Borrower pursuant to the terms of the ABL Credit Agreement or any other Loan Document). With respect to any Canadian Guarantor, if and to the extent, under the Commodity Exchange Act or any rule, regulation or order of the CFTC (or the application or official interpretation of any thereof), all or a portion of the guarantee of such Canadian Guarantor of, or the grant by such Canadian Guarantor of a security interest for, the obligation (the “ Excluded Borrower Obligation ”) to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act (or the analogous term or section in any amended or successor statute) is or becomes illegal, the Borrower Obligations guaranteed by such Canadian Guarantor shall not include any such Excluded Borrower Obligation.
 
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“ Canadian Borrower ”: as defined in the preamble hereto.
“ Canadian Granting Parties ”: as defined in the recitals hereto.
“ Canadian Grantor ”: the Canadian Borrower and any other Canadian Subsidiary of the Parent Borrower (other than any Excluded Subsidiary) that becomes a party hereto from time to time after the date hereof.
“ Canadian Guarantors ”: the collective reference to each Canadian Subsidiary from time to time party hereto.
“ Canadian Pledgor ”: Each Canadian Granting Party (with respect to Pledged Securities held by such Canadian Granting Party and all other Pledged Collateral of such Canadian Granting Party).
“ CFTC ”: the Commodity Futures Trading Commission or any successor to the Commodity Futures Trading Commission.
“ Collateral ”: as defined in subsection 3.1 ; provided that, for purposes of subsection 6.5 and Section 8 , “Collateral” shall have the meaning assigned to such term in the ABL Credit Agreement.
“ Collateral Account Bank ”: any bank or an Affiliate or branch thereof which at all times is the ABL Collateral Agent or a Lender or an Affiliate thereof as selected by the relevant Canadian Grantor and consented to in writing by the ABL Collateral Agent (such consent not to be unreasonably withheld or delayed).
“ Collateral Proceeds Account ”: a non-interest bearing cash collateral account established and maintained by the relevant Canadian Grantor at an office of the Collateral Account Bank in the name, and in the sole dominion and control of, the ABL Collateral Agent for the benefit of the Secured Parties.
“ Commitments ”: collective reference to ( i ) each Canadian Facility Lender’s obligation to make Canadian Facility Revolving Credit Loans pursuant to the ABL Credit Agreement and ( ii ) the obligation of the Canadian Facility Issuing Lender to issue Canadian Facility Letters of Credit to the Canadian Borrower pursuant to subsection 3.1 of the ABL Credit Agreement.
“ Concentration Account ”: as defined in the ABL Credit Agreement.
“ Contracts ”: with respect to any Canadian Grantor, all contracts, agreements, instruments and indentures in any form and portions thereof, to which such Canadian Grantor is a party or under which such Canadian Grantor or any property of such Canadian Grantor is subject, as the same may from time to time be amended, supplemented, waived or otherwise modified, and all rights of such Canadian Grantor thereunder, including, without limitation, ( i ) all rights of such Canadian Grantor to receive moneys due and to become due to it thereunder or in connection therewith, ( ii ) all rights of such Canadian Grantor to damages arising thereunder and ( iii ) all rights of such Canadian Grantor to perform and to exercise all remedies thereunder.
“ Copyright Licenses ”: with respect to any Canadian Grantor, all Canadian written license agreements of such Canadian Grantor providing for the grant by or to such Canadian Grantor of any right under
 
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any Copyright of such Canadian Grantor, other than agreements with any Person that is an Affiliate or a Subsidiary of the Parent Borrower or such Canadian Grantor, including, without limitation, any license agreements listed on Schedule 5 , subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Copyrights ”: with respect to any Canadian Grantor, all of such Canadian Grantor’s right, title and interest in and to all Canadian copyrights, whether or not the underlying works of authorship have been published or registered, all Canadian and United States copyright registrations and copyright applications, including, without limitation, any copyright registrations and copyright applications listed on Schedule 5 , and ( i ) all renewals thereof, ( ii ) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof and ( iii ) the right to sue or otherwise recover for past, present and future infringements and misappropriations thereof.
“ Deposit Account ”: any demand, time, savings, passbook or like account now or hereafter maintained by any Canadian Grantor with a depositary institution, and, in any event, shall include, but shall not be limited to all DDAs, all Concentration Accounts and the Canadian Core Concentration Account.
“ Excluded Assets ”: as defined in subsection 3.3 .
“ first priority ”: with respect to any Lien purported to be created by this Agreement, that such Lien is the most senior Lien to which such Collateral is subject.
“ Foreign Intellectual Property ”: any right, title or interest in or to any copyrights, copyright licenses, patents, patent applications, patent licenses, trade secrets, trade secret licenses, trade-marks, service marks, trade-mark and service mark applications, trade names, trade dress, trade-mark licenses, technology, know-how and processes or any other intellectual property governed by or arising or existing under, pursuant to or by virtue of the laws of any jurisdiction other than Canada or any province, territory and other political subdivision thereof.
“ Foreign Subsidiary ”: for the purposes of this Agreement, ( i ) any Restricted Subsidiary of the Parent Borrower that is not organized under the laws of Canada, including all provinces, territories and political subdivisions thereof and ( ii ) any Foreign Subsidiary Holdco.
“ Guarantor Obligations ”: with respect to any Canadian Guarantor, the collective reference to ( i ) the Obligations guaranteed by such Canadian Guarantor pursuant to Section 2 and ( ii ) all obligations and liabilities of such Canadian Guarantor that may arise under or in connection with this Agreement or any other Loan Document to which such Canadian Guarantor is a party, any Hedging Agreement entered into with any Hedging Affiliate or any Bank Products Agreement entered into with any Bank Products Affiliate, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all reasonable fees, expenses and disbursements of counsel to the Administrative Agent or to any other Secured Party that are required to be paid by such Canadian Guarantor pursuant to the terms of this Agreement or any other Loan Document and interest and fees accruing after (or that would accrue but for) the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Canadian Guarantor, whether or not a claim for post-filing or post-petition interest or fees is allowed in such proceeding). With respect to any Canadian Guarantor, if and to the extent, under the Commodity Exchange Act or any rule, regulation or order of the CFTC (or the application or official interpretation of any thereof),
 
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all or a portion of the guarantee of such Canadian Guarantor of, or the grant by such Canadian Guarantor of a security interest for, the obligation (together with the Excluded Borrower Obligation, the “ Excluded Obligation ”) to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act (or the analogous term or section in any amended or successor statute) is or becomes illegal, the Guarantor Obligations of such Canadian Guarantor shall not include any such Excluded Obligation.
“ Hedging Affiliate ”: any Person who ( i ) has entered into a Hedging Agreement with any Canadian Grantor with the obligations of such Canadian Grantor thereunder being secured by one or more Loan Documents, ( ii ) was an Agent, a Lender or an Affiliate of a Lender on the date hereof, or at the time of entry into such Agreement, or at the time of the designation referred to in the following clause (iii) , and ( iii ) has been designated by the Parent Borrower for and on behalf of the Canadian Borrower in accordance with subsection 8.4 .
“ Hedging Agreement ”: any Interest Rate Agreement, Commodities Agreement, Currency Agreement or any other credit or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity, credit or equity values or creditworthiness (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.
“ Industrial Design Licenses ”: with respect to any Canadian Grantor, all written agreements of such Canadian Grantor providing for the grant by or to such Canadian Grantor of any right under any Industrial Design, other than agreements with any Person that is an Affiliate or a Subsidiary of the Parent Borrower or such Canadian Grantor, including, without limitation, the license agreements listed on Schedule 5 , subject, in each case to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Industrial Designs ”: with respect to any Canadian Grantor, all of such Canadian Grantor’s right, title and interest in and to ( a ) all industrial designs, including, without limitation all industrial designs identified on Schedule 5 and all renewals and extensions thereof, ( b ) all registrations and recordings thereof and all applications that have been or shall be made or filed in Canada or any other country or political subdivision thereof and all records thereof and all reissues, extensions or renewals thereof, and ( c ) all Canadian common law and other rights in the above.
“ Instruments ”: as defined in the PPSA but excluding Pledged Securities.
“ Intellectual Property ”: with respect to any Canadian Grantor, the collective reference to such Canadian Grantor’s Copyrights, Copyright Licenses, Patents, Patent Licenses, Trade Secrets, Trade Secret Licenses, Trade-marks, Trade-mark Licenses Industrial Designs and Industrial Design Licenses.
“ Intercompany Note ”: with respect to any Canadian Grantor, any promissory note in a principal amount in excess of $5,000,000 evidencing loans made by such Canadian Grantor to the Parent Borrower or any of its Subsidiaries.
“ Inventory ”: with respect to any Canadian Grantor, all inventory (as defined in the PPSA) of such Canadian Grantor, including, without limitation, all Inventory (as defined in the ABL Credit Agreement) of such Canadian Grantor.
“ Issuer ”: as defined in the STA.
 
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“ Lender Secured Parties ”: the collective reference to ( i ) the Administrative Agent, the ABL Collateral Agent and each Other Representative, ( ii ) the Canadian Facility Lenders and the Canadian Facility Issuing Lender, and ( iii ) each of their respective successors and assigns and their permitted transferees and endorsees.
“ Non-Lender Secured Parties ”: the collective reference to all Bank Products Affiliates and Hedging Affiliates and their respective successors, assigns, transferees and replacements thereof, in each case in their capacity as such.
“ Obligations ”: ( i ) in the case of the Canadian Borrower, its Borrower Obligations and ( ii ) in the case of each Canadian Guarantor, its Guarantor Obligations.
“ Parent Borrower ”: as defined in the recitals hereto.
“ Patent Licenses ”: with respect to any Canadian Grantor, all Canadian written license agreements of such Canadian Grantor providing for the grant by or to such Canadian Grantor of any right under any Patent, patent application, or patentable invention other than agreements with any Person who is an Affiliate or a Subsidiary of the Parent Borrower or such Canadian Grantor, including, without limitation, the license agreements listed on Schedule 5 , subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Patents ”: with respect to any Canadian Grantor, all of such Canadian Grantor’s right, title and interest in and to all Canadian patents, patent applications and patentable inventions and all reissues and extensions thereof, including, without limitation, all patents and patent applications identified in Schedule 5 , and including, without limitation, ( i ) all inventions and improvements described and claimed therein, ( ii ) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, ( iii ) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof), and ( iv ) all other rights corresponding thereto in Canada and all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon, and all other rights of any kind whatsoever of such Canadian Grantor accruing thereunder or pertaining thereto.
“ Pledged Collateral ”: as to any Canadian Pledgor, the Pledged Securities now owned or at any time hereafter acquired by such Canadian Pledgor, and any Proceeds thereof.
“ Pledged Notes ”: with respect to any Canadian Pledgor, all Intercompany Notes at any time issued to, or held or owned by, such Canadian Pledgor.
“ Pledged Securities ”: the collective reference to the Pledged Notes and the Pledged Stock.
“ Pledged Stock ”: with respect to any Canadian Pledgor, the shares of Capital Stock listed on Schedule 2 as held by such Canadian Pledgor, together with any other shares of Capital Stock of any Subsidiary of such Canadian Pledgor required to be pledged by such Canadian Pledgor pursuant to subsection 7.9 of the ABL Credit Agreement, as well as any other shares, stock, unit or other similar certificates, options or rights of any nature whatsoever in respect of any Capital Stock of any Issuer that may be issued or granted to, or held by, such Canadian Pledgor while this Agreement is in effect; provided that in no event shall there be pledged, nor shall any Canadian Pledgor be required to pledge, directly or indirectly, ( i ) any of the Capital Stock of a Foreign Subsidiary, ( ii )  de minimis shares of a Foreign Subsidiary held by
 
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any Canadian Pledgor as a nominee or in a similar capacity, ( iii ) any Capital Stock of any Captive Insurance Subsidiary, ( iv ) Capital Stock of any Subsidiary that is not a Loan Party, or of any joint venture, in each case that is prohibited (for so long as such restriction or any replacement or renewal thereof is in effect) by any applicable Contractual Obligation or Requirement of Law from being pledged to secure the Obligations or that would require governmental (including regulatory) consent, approval, license or authorization to be pledged unless such consent, approval, license or authorization has been received and ( v ) without duplication, any Excluded Assets.
“ PPSA ”: the Personal Property Security Act (Ontario), as such legislation may be amended, renamed or replaced from time to time, and includes all regulations from time to time made under such legislation, provided that, if perfection or the effect of perfection or non-perfection or the priority of any Lien created hereunder on the Collateral is governed by the personal property security legislation or other applicable legislation with respect to personal property security as in effect in a jurisdiction other than Ontario, “PPSA” means the Personal Property Security Act, or the Civil Code of Quebec , or such other applicable legislation as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
“ Restrictive Agreements ”: as defined in subsection 3.3(a) .
“ Secured Parties ”: the collective reference to the Lender Secured Parties and the Non-Lender Secured Parties.
“ Security Collateral ”: with respect to any Canadian Granting Party, collectively, the Collateral (if any) and the Pledged Collateral (if any) of such Canadian Granting Party.
“ Specified Assets ”: as defined in subsection 4.2.2(b) .
“ STA ”: the Securities Transfer Act, 2006 (Ontario), as such legislation may be amended, renamed or replaced from time to time, and includes all regulations from time to time made under such legislation; provided that, if perfection or the effect of perfection or non-perfection or the priority of any Lien created hereunder on the Collateral that is Investment Property is governed by the laws in effect in any province or territory of Canada other than Ontario in which there is in force legislation substantially the same as the Securities Transfer Act, 2006 (Ontario) (an “ Other STA Province ”), then “STA” shall mean such other legislation as in effect from time to time in such Other STA Province for purposes of the provisions hereof referring to or incorporating by reference provisions of the STA.
“ Trade Secret Licenses ”: with respect to any Canadian Grantor, all Canadian written license agreements of such Canadian Grantor providing for the grant by or to such Canadian Grantor of any right under any Trade Secrets, including, without limitation, know-how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, other than agreements with any Person that is an Affiliate or a Subsidiary of the Parent Borrower or such Canadian Grantor, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Trade Secrets ”: with respect to any Canadian Grantor, all of such Canadian Grantor’s right, title and interest in and to all Canadian trade secrets, including, without limitation, know-how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, including, without limitation, ( i ) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including,
 
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without limitation, payments under all licenses, non-disclosure agreements and memoranda of understanding entered into in connection therewith, and damages and payments for past or future misappropriations thereof, and ( ii ) the right to sue or otherwise recover for past, present or future misappropriations thereof.
“ Trade-mark Licenses ”: with respect to any Canadian Grantor, all Canadian written license agreements of such Canadian Grantor providing for the grant by or to such Canadian Grantor of any right under any Trade-marks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, other than agreements with any Person that is an Affiliate or a Subsidiary of the Parent Borrower or such Canadian Grantor, including, without limitation, the license agreements listed on Schedule 5 , subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
“ Trade-marks ”: with respect to any Canadian Grantor, all of such Canadian Grantor’s right, title and interest in and to all Canadian trade-marks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, trade-mark and service mark registrations, and applications for trade-mark or service mark registrations (except for “intent to use” applications for Trade-mark or service mark registrations) and any renewals thereof, including, without limitation, each registration and application identified in Schedule 5 , and including, without limitation, ( i ) the right to sue or otherwise recover for any and all past, present and future infringements or dilutions thereof, ( ii ) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof), and ( iii ) all other rights corresponding thereto in Canada and all other rights of any kind whatsoever of such Canadian Grantor accruing thereunder or pertaining thereto in Canada, together in each case with the goodwill of the business connected with the use of, and symbolized by, each such trade-mark, service mark, trade name, trade dress or other indicia of trade origin or business identifiers.
“ ULC ”: an Issuer that is an unlimited company, unlimited liability corporation or unlimited liability company.
“ ULC Laws ”: the Companies Act (Nova Scotia), the Business Corporations Act (British Columbia), the Business Corporations Act (Alberta) and all laws of Nova Scotia, British Columbia, Alberta or any other province or territory of Canada related to ULCs.
“ ULC Shares ”: shares or other equity interests in the Capital Stock of a ULC.
“ Vehicles ”: all cars, trucks, trailers, construction and earth moving equipment and other vehicles covered by a certificate of title law of any province or territory and all tires and other appurtenances to any of the foregoing.
1.2 Other Definitional Provisions .
(a) The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Annex references are to this Agreement unless otherwise specified. The words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.”
 
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(b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral, Pledged Collateral or Security Collateral or any part thereof, when used in relation to a Canadian Granting Party shall refer to such Canadian Granting Party’s Collateral, Pledged Collateral or Security Collateral or the relevant part thereof.
(d) All references in this Agreement to any of the property described in the definition of the term “Collateral,” “Pledged Collateral” or “Security Collateral,” or to any Proceeds thereof, shall be deemed to be references thereto only to the extent the same constitute Collateral, Pledged Collateral or Security Collateral, respectively.
SECTION 2 GUARANTEE
2.1 Guarantee .
(a) Each of the Canadian Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the benefit of the Secured Parties, the prompt and complete payment and performance by the Canadian Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of the Borrower Obligations of the Canadian Borrower owed to the Secured Parties.
(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Canadian Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount that can be guaranteed by such Canadian Guarantor under applicable law, including applicable federal or provincial laws relating to the insolvency of debtors; provided that, to the maximum extent permitted under applicable law, it is the intent of the parties hereto that the rights of contribution of each Canadian Guarantor provided in subsection 2.2 be included as an asset of the respective Canadian Guarantor in determining the maximum liability of such Canadian Guarantor hereunder.
(c) Each Canadian Guarantor agrees that the Borrower Obligations guaranteed by it hereunder may at any time and from time to time exceed the amount of the liability of such Canadian Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Administrative Agent or any other Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in full force and effect until the earliest to occur of ( i ) the first date on which all the Canadian Facility Revolving Credit Loans, any Reimbursement Obligations with respect to Canadian Facility Letters of Credit, all other Borrower Obligations then due and owing, and the obligations of each Canadian Guarantor under the guarantee contained in this Section 2 then due and owing shall have been satisfied by payment in full in cash, no Canadian Facility Letter of Credit shall be outstanding (except for Canadian Facility Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments shall be terminated, notwithstanding that from time to time during the term of the ABL Credit Agreement the Canadian Borrower may be free from any Borrower Obligations, ( ii ) as to any Canadian Guarantor, the sale or other disposition of all of the Capital Stock of such Canadian Guarantor (to a Person other than the Canadian Borrower or a Canadian Guarantor), or any other transaction or occurrence as a result of which such Canadian Guarantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the ABL Credit Agreement and ( iii ) as to any Canadian Guarantor, such Canadian Guarantor becoming an Excluded Subsidiary.
 
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(e) No payment made by the Canadian Borrower, any of the Canadian Guarantors, any other Canadian Guarantor or any other Person or received or collected by the Administrative Agent or any other Secured Party from the Canadian Borrower, any of the Canadian Guarantors, any other Canadian Guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of any of the Borrower Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Canadian Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Canadian Guarantor in respect of the Borrower Obligations or any payment received or collected from such Canadian Guarantor in respect of any of the Borrower Obligations), remain liable for the Borrower Obligations of the Canadian Borrower guaranteed by it hereunder up to the maximum liability of such Canadian Guarantor hereunder until the earliest to occur of ( i ) the first date on which all the Canadian Facility Revolving Credit Loans, any Reimbursement Obligations with respect to Canadian Facility Letters of Credit and all other Borrower Obligations then due and owing, are paid in full in cash, no Canadian Facility Letter of Credit shall be outstanding (except for Canadian Facility Letters of Credit that have been cash collateralized ,backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments are terminated, ( ii ) as to any Canadian Guarantor, a sale or other disposition of all of the Capital Stock of such Canadian Guarantor (other than to the Canadian Borrower or a Canadian Guarantor), or any other transaction or occurrence as a result of which such Canadian Guarantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case, that is permitted under the ABL Credit Agreement and ( iii ) as to any Canadian Guarantor, such Canadian Guarantor becoming an Excluded Subsidiary.
2.2 Right of Contribution . Each Canadian Guarantor hereby agrees that to the extent that a Canadian Guarantor shall have paid more than its proportionate share (based, to the maximum extent permitted by law, on the respective Adjusted Net Worths of the Canadian Guarantors on the date the respective payment is made) of any payment made hereunder, such Canadian Guarantor shall be entitled to seek and receive contribution from and against any other Canadian Guarantor hereunder that has not paid its proportionate share of such payment. Each Canadian Guarantor’s right of contribution shall be subject to the terms and conditions of subsection 2.3 . The provisions of this subsection 2.2 shall in no respect limit the obligations and liabilities of any Canadian Guarantor to the Administrative Agent and the other Secured Parties, and each Canadian Guarantor shall remain liable to the Administrative Agent and the other Secured Parties for the full amount guaranteed by such Canadian Guarantor hereunder.
2.3 No Subrogation . Notwithstanding any payment made by any Canadian Guarantor hereunder or any set-off or application of funds of any Canadian Guarantor by the ABL Collateral Agent or any other Secured Party, no Canadian Guarantor shall be entitled to be subrogated to any of the rights of the ABL Collateral Agent or any other Secured Party against the Canadian Borrower or any other Canadian Guarantor or any collateral security or guarantee or right of offset held by the ABL Collateral Agent or any other Secured Party for the payment of the Borrower Obligations, nor shall any Canadian Guarantor seek or be entitled to seek any contribution or reimbursement from the Canadian Borrower or any other Canadian Guarantor in respect of payments made by such Canadian Guarantor hereunder, until all amounts owing to the ABL Collateral Agent and the other Secured Parties by the Canadian Borrower on account of the Borrower Obligations are paid in full in cash, no Canadian Facility Letter of Credit shall be outstanding (except for Canadian Facility Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments are terminated. If any amount shall be paid to any Canadian
 
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Guarantor on account of such subrogation rights at any time when all of the Borrower Obligations shall not have been paid in full in cash or any Canadian Facility Letter of Credit shall remain outstanding (except for Canadian Facility Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) or any of the Commitments shall remain in effect, such amount shall be held by such Canadian Guarantor in trust for the ABL Collateral Agent and the other Secured Parties, segregated from other funds of such Canadian Guarantor, and shall, forthwith upon receipt by such Canadian Guarantor, be turned over to the ABL Collateral Agent in the exact form received by such Canadian Guarantor (duly endorsed by such Canadian Guarantor to the ABL Collateral Agent, if required), to be held as collateral security for all of the Borrower Obligations (whether matured or unmatured) guaranteed by such Canadian Guarantor and/or then or at any time thereafter may be applied against any Borrower Obligations, whether matured or unmatured, in such order as the ABL Collateral Agent may determine.
2.4 Amendments, etc. with Respect to the Obligations . To the maximum extent permitted by law, each Canadian Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Canadian Guarantor and without notice to or further assent by any Canadian Guarantor, any demand for payment of any of the Borrower Obligations made by the ABL Collateral Agent, the Administrative Agent or any other Secured Party may be rescinded by the ABL Collateral Agent, the Administrative Agent or such other Secured Party and any of the Borrower Obligations continued, and the Borrower Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, waived, modified, accelerated, compromised, subordinated, waived, surrendered or released by the ABL Collateral Agent, the Administrative Agent or any other Secured Party, and the ABL Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, waived, modified, supplemented or terminated, in whole or in part, as the ABL Collateral Agent or the Administrative Agent (or the Required Lenders or the applicable Lender(s), as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the ABL Collateral Agent, the Administrative Agent or any other Secured Party for the payment of any of the Borrower Obligations may be sold, exchanged, waived, surrendered or released. None of the ABL Collateral Agent, the Administrative Agent and each other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for any of the Borrower Obligations or for the guarantee contained in this Section 2 or any property subject thereto, except to the extent required by applicable law.
2.5 Guarantee Absolute and Unconditional . Each Canadian Guarantor waives, to the maximum extent permitted by applicable law, any and all notice of the creation, renewal, extension or accrual of any of the Borrower Obligations and notice of or proof of reliance by the ABL Collateral Agent, the Administrative Agent or any other Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2 ; each of the Borrower Obligations, and any obligation contained therein, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2 ; and all dealings between the Canadian Borrower and any of the Canadian Guarantors, on the one hand, and the ABL Collateral Agent, the Administrative Agent and the other Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2 . Each Canadian Guarantor waives, to the maximum extent permitted by applicable law, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Canadian Borrower or any of the other Canadian Guarantors with respect to any of the Borrower Obligations. Each Canadian Guarantor understands and agrees, to the extent permitted by law,
 
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that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and not of collection. Each Canadian Guarantor hereby waives, to the maximum extent permitted by applicable law, any and all defenses (other than any claim alleging breach of a contractual provision of any of the Loan Documents) that it may have arising out of or in connection with any and all of the following: ( a ) the validity or enforceability of the ABL Credit Agreement or any other Loan Document, any of the Borrower Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the ABL Collateral Agent, the Administrative Agent or any other Secured Party, ( b ) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by the Canadian Borrower against the ABL Collateral Agent, the Administrative Agent or any other Secured Party, ( c ) any change in the time, place, manner or place of payment, amendment, or waiver or increase in any of the Obligations, ( d ) any exchange, non-perfection, taking, or release of Collateral, ( e ) any change in the structure or existence of the Canadian Borrower, ( f ) any application of Collateral to any of the Obligations, ( g ) any law, regulation or order of any jurisdiction, or any other event, affecting any term of any Obligation or the rights of the ABL Collateral Agent, the Administrative Agent or any other Secured Party with respect thereto, including, without limitation, ( i ) the application of any such law, regulation, decree or order, including any prior approval, which would prevent the exchange of any currency (other than Dollars) for Dollars or the remittance of funds outside of such jurisdiction or the unavailability of Dollars in any legal exchange market in such jurisdiction in accordance with normal commercial practice, ( ii ) a declaration of banking moratorium or any suspension of payments by banks in such jurisdiction or the imposition by such jurisdiction or any Governmental Authority thereof of any moratorium on, the required rescheduling or restructuring of, or required approval of payments on, any indebtedness in such jurisdiction, ( iii ) any expropriation, confiscation, nationalization or requisition by such country or any Governmental Authority that directly or indirectly deprives the Canadian Borrower or any Canadian Guarantor of any assets or their use, or of the ability to operate its business or a material part thereof, or ( iv ) any war (whether or not declared), insurrection, revolution, hostile act, civil strife or similar events occurring in such jurisdiction which has the same effect as the events described in clause (i) , (ii)  or (iii)  above (in each of the cases contemplated in clauses (i)  through (iv)  above, to the extent occurring or existing on or at any time after the date of this Agreement), or ( h ) any other circumstance whatsoever (other than payment in full in cash of the Borrower Obligations guaranteed by it hereunder) (with or without notice to or knowledge of the Canadian Borrower or such Canadian Guarantor) or any existence of or reliance on any representation by the Secured Parties that constitutes, or might be construed to constitute, an equitable or legal discharge of the Canadian Borrower for the Borrower Obligations, or of such Canadian Guarantor under the guarantee contained in this Section 2 , in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Canadian Guarantor, the ABL Collateral Agent, the Administrative Agent and any other Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Canadian Borrower, any other Canadian Guarantor or any other Person or against any collateral security or guarantee for the Borrower Obligations guaranteed by such Canadian Guarantor hereunder or any right of offset with respect thereto, and any failure by the ABL Collateral Agent, the Administrative Agent or any other Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Canadian Borrower, any other Canadian Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Canadian Borrower, any other Canadian Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Canadian Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the ABL Collateral Agent, the Administrative Agent or any other Secured Party against any Canadian Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.
 
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2.6 Reinstatement . The guarantee of any Canadian Guarantor contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Borrower Obligations guaranteed by such Canadian Guarantor hereunder is rescinded or must otherwise be restored or returned by the ABL Collateral Agent, the Administrative Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Canadian Borrower or any Canadian Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Canadian Borrower or any Canadian Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.
2.7 Payments . Each Canadian Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim, in Canadian Dollars (or in the case of any amount required to be paid in any other currency pursuant to the requirements of the ABL Credit Agreement or other agreement relating to the respective Obligations, such other currency), at the Administrative Agent’s office specified in subsection 11.2 of the ABL Credit Agreement or such other address as may be designated in writing by the Administrative Agent to such Canadian Guarantor from time to time in accordance with subsection 11.2 of the ABL Credit Agreement.
2.8 Remedies . The Administrative Agent and the Secured Parties need not seek or exhaust their recourse against the Canadian Borrower or any other Person or realize on any security interest they may hold in respect of the Borrower Obligations or the Guarantor Obligations before being entitled to (a) enforce payment and performance under this Agreement, or (b) pursue any other remedy against a Canadian Guarantor. Should the Administrative Agent or the Secured Parties elect to realize on any security interest they hold, either before, concurrently with, or after demand for payment under this Agreement, such Canadian Guarantor renounces the benefits of division or discussion.
SECTION 3 GRANT OF SECURITY INTEREST
3.1 Grant . Each Canadian Grantor hereby grants, assigns, hypothecates and pledges all of its present and after acquired personal property to the ABL Collateral Agent, for the benefit of the Secured Parties, including, without limitation, a security interest in all of the Collateral of such Canadian Grantor, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations of such Canadian Grantor, except as provided in subsection 3.3 and subject to existing licenses to use the Copyrights, Patents, Trade-marks, Trade Secrets and Industrial Designs granted by such Canadian Grantor in the ordinary course of business and described on Schedule 3 hereto. The term “ Collateral ,” as to any Canadian Grantor, means all present and after acquired personal property of such Canadian Grantor, including the following property (wherever located) now owned or at any time hereafter acquired by such Canadian Grantor or in which such Canadian Grantor now has or at any time in the future may acquire any right, title or interest, except as provided in subsection 3.3 :
(a) all Accounts;
(b) all Money (including all cash);
(c) all Cash Equivalents;
 
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(d) all Chattel Paper;
(e) all Contracts;
(f) all Deposit Accounts;
(g) all Documents of Title;
(h) all Equipment and Goods;
(i) all Intangibles;
(j) all Instruments;
(k) all Intellectual Property;
(l) all Inventory;
(m) all Investment Property;
(n) all books and records relating to the foregoing;
(o) the Collateral Proceeds Account; and
(p) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;
provided that, Collateral shall not include any Pledged Collateral, Excluded Assets or any property or assets described in the proviso to the definition of Pledged Stock.
3.2 Pledged Collateral . Each Canadian Granting Party that is a Canadian Pledgor hereby grants to the ABL Collateral Agent, for the benefit of the Secured Parties, a security interest in all of the Pledged Collateral of such Canadian Pledgor now owned or at any time hereafter acquired by such Canadian Pledgor, including any Proceeds thereof, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations of such Canadian Pledgor, except as provided in subsection 3.3 .
3.3 Certain Limited Exceptions . No security interest is or will be granted pursuant to this Agreement or any other Security Document in any right, title or interest of any Canadian Granting Party under or in, and “Collateral” and “Pledged Collateral” shall not include the following (collectively, the “ Excluded Assets ”):
(a) any Instruments, Contracts, Chattel Paper, Intangibles, Copyright Licenses, Patent Licenses, Trade-mark Licenses, Trade Secret Licenses, Industrial Design Licenses or other contracts or agreements with or issued by Persons other than Holding, a Subsidiary of Holding, the Parent Borrower, a Restricted Subsidiary or an Affiliate thereof (collectively, “ Restrictive Agreements ”) that would otherwise be included in the Security Collateral (and such Restrictive Agreements shall not be deemed to constitute a part of the Security Collateral) for so long as, and to the extent that, the granting of such a security interest pursuant hereto would result in a breach,
 
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default or termination of such Restrictive Agreements (in each case, except to the extent that, pursuant to the PPSA and any other applicable law, the granting of security interests therein can be made without resulting in a breach, default or termination of such Restrictive Agreements);
(b) any Equipment or other property that would otherwise be included in the Security Collateral (and such Equipment or other property shall not be deemed to constitute a part of the Security Collateral) if such Equipment or other property ( x ) is subject to a Lien described in subsection 8.2 (e) (with respect to Purchase Money Obligations or Capitalized Lease Obligations) or 8.2(n) of the ABL Credit Agreement (with respect to such Liens described in such subsection 8.2(d) of the ABL Credit Agreement) to the extent that the agreements governing such Purchase Money Obligations or Capitalized Lease Obligations prohibit the granting of a security interest to the ABL Collateral Agent hereunder (but in each case only for so long as such Liens are in place) or ( y ) is subject to any Lien in respect of Hedging Obligations permitted by subsection 8.2(d) that do not constitute Secured Bank Product Obligations of the ABL Credit Agreement to the extent that the agreements governing such Hedging Obligations prohibit the granting of a security interest to the ABL Collateral Agent hereunder (but in each case only for so long as such Liens are in place), and, in the case of such other property, such other property consists solely of ( i ) cash, Cash Equivalents or Temporary Cash Investments, together with proceeds, dividends and distributions in respect thereof, ( ii ) any assets relating to such assets, proceeds, dividends or distributions, or to such Hedging Obligations, and/or ( iii ) any other assets consisting of, relating to or arising under or in connection with ( 1 ) any Hedging Obligations or ( 2 ) any other agreements, instruments or documents related to any such Hedging Obligations or to any of the assets referred to in any of clauses (i) through (iii) of this clause (y);
(c) any property that ( A ) would otherwise be included in the Security Collateral (and such property shall not be deemed to constitute a part of the Security Collateral) if such property has been sold or otherwise transferred in connection with a Sale and Leaseback Transaction or ( B ) is subject to any Liens permitted under subsection 8.2 of the ABL Credit Agreement which relates to property subject to any such Sale and Leaseback Transaction or Intangibles related thereto (but only for so long as such Liens are in place), provided that, notwithstanding the foregoing, a security interest of the Collateral Agent shall attach to any money, securities or other consideration received by any Canadian Grantor as consideration for the sale or other disposition of such property as and to the extent such consideration would otherwise constitute Security Collateral;
(d) each Canadian Pledgor acknowledges that certain of the Pledged Collateral of such Canadian Pledgor may now or in the future consist of ULC Shares, and that it is the intention of the ABL Collateral Agent and each Canadian Pledgor that neither the ABL Collateral Agent nor any other Secured Party should under any circumstances prior to realization be held to be a “member” or “shareholder,” as applicable, of a ULC for the purposes of any ULC Laws. Therefore, notwithstanding any provisions to the contrary contained in this Agreement, the ABL Credit Agreement or any other Loan Document, where a Canadian Pledgor is the registered and beneficial owner of ULC Shares which are Pledged Collateral of such Canadian Pledgor, such Canadian Pledgor will remain the sole registered and beneficial owner of such ULC Shares until such time as such ULC Shares are effectively transferred into the name of the ABL Collateral Agent, any other Secured Party, or any other Person on the books and records of the applicable ULC. Accordingly, each Canadian Pledgor shall be entitled to receive and retain for its own account any dividend or other distribution, if any, in respect of such ULC Shares (except for any dividend or distribution comprised of Certificated Securities representing Pledged Collateral,
 
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which shall be delivered to the ABL Collateral Agent to hold as Pledged Collateral hereunder) and shall have the right to vote such ULC Shares and to control the direction, management and policies of the applicable ULC to the same extent as such Canadian Pledgor would if such ULC Shares were not pledged to the ABL Collateral Agent pursuant hereto. Nothing in this Agreement, the ABL Credit Agreement or any other Loan Document is intended to, and nothing in this Agreement, the ABL Credit Agreement or any other Loan Document shall, constitute the ABL Collateral Agent, any other Secured Party, or any other Person other than the applicable Canadian Pledgor, a member or shareholder of a ULC for the purposes of any ULC Laws (whether listed or unlisted, registered or beneficial), until such time as notice is given to such Canadian Pledgor and further steps are taken pursuant hereto or thereto so as to register the ABL Collateral Agent, any other Secured Party, or such other Person, as specified in such notice, as the holder of the ULC Shares. To the extent any provision hereof would have the effect of constituting the ABL Collateral Agent or any other Secured Party as a member or a shareholder, as applicable, of any ULC prior to such time, such provision shall be severed herefrom and shall be ineffective with respect to ULC Shares which are Pledged Collateral of any Canadian Pledgor, without otherwise invalidating or rendering unenforceable this Agreement or invalidating or rendering unenforceable such provision insofar as it relates to Pledged Collateral of any Canadian Pledgor which is not ULC Shares. Except upon the exercise of rights of the ABL Collateral Agent to sell, transfer or otherwise dispose of ULC Shares in accordance with this Agreement, each Canadian Pledgor shall not cause or permit, or enable an Issuer that is a ULC to cause or permit, the ABL Collateral Agent or any other Secured Party to: ( a ) be registered as a shareholder or member of such Issuer; ( b ) have any notation entered in their favour in the share register of such Issuer; ( c ) be held out as shareholders or members of such Issuer; ( d ) receive, directly or indirectly, any dividends, property or other distributions from such Issuer by reason of the ABL Collateral Agent holding the security interests over the ULC Shares; or ( e ) act as a shareholder of such Issuer, or exercise any rights of a shareholder including the right to attend a meeting of shareholders of such Issuer or to vote its ULC Shares;
(e) Capital Stock which is described in the proviso to the definition of Pledged Stock;
(f) any interest in leased real property (including fixtures related thereto) (and there shall be no requirement to deliver landlord lien waivers, estoppels or collateral access letters);
(g) any fee interest in owned real property (including fixtures related thereto) if the fair market value of such fee interest is less than the Dollar Equivalent of $25,000,000 individually;
(h) any Vehicles;
(i) assets to the extent the granting or perfecting of a security interest in such assets would result in costs or other consequences to Holding or any of its Subsidiaries as reasonably determined in writing by the Parent Borrower, the Administrative Agent and, to the extent such assets would otherwise constitute Collateral, the ABL Collateral Agent, that are excessive in view of the benefits that would be obtained by the Secured Parties;
(j) those assets over which the granting of security interests in such assets would be prohibited by contract permitted under the ABL Credit Agreement, applicable law or regulation or the organizational or joint venture documents of any non-wholly owned Subsidiary (after giving effect to the applicable anti-assignment provisions of the PPSA, or any other applicable law
 
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or principles of equity as in effect in any relevant jurisdiction), or to the extent that such security interests would result in material adverse tax consequences to the Parent Borrower or any one or more of its Subsidiaries as reasonably determined in writing by the Parent Borrower and consented to in writing by the ABL Collateral Agent (it being understood that the Lenders shall not require the Canadian Borrower or any of its subsidiaries to enter into any security agreements or pledge agreements governed by foreign law);
(k) Foreign Intellectual Property; and
(l) any aircraft, airframes, aircraft engines, helicopters, vessels or rolling stock or any Equipment or other assets constituting a part thereof.
3.3.1 The Collateral shall not include the last day of the term of any lease or agreement therefor but upon the enforcement of the security interest granted hereby in the Collateral, the Canadian Grantors or any of them shall stand possessed of such last day in trust to assign the same to any person acquiring such term.
3.3.2 The term “Goods” when used in this Agreement shall not include Consumer Goods of any Canadian Grantor.
3.3.3 Notwithstanding subsection 3.1 , any Canadian Grantor’s grant of security in Trade-marks under this Agreement shall be limited to a grant by such Canadian Grantor of a security interest in all of such Canadian Grantor’s right, title and interest in such Trade-marks.
3.3.4 Each Canadian Grantor and the ABL Collateral Agent hereby acknowledge that ( a ) value has been given in respect of the security interests granted herein; ( b ) such Canadian Grantor has rights in the Collateral in which it has granted a security interest (other than after-acquired property); ( c ) this Agreement constitutes a security agreement as that term is defined in the PPSA; ( d ) it has not agreed to postpone the time of attachment of the security interest granted hereunder; and ( e ) it has received a copy of this Agreement.
3.3.5 If the Collateral is realized upon and the security interest in the Collateral is not sufficient to satisfy all of the Borrower Obligations or Guarantor Obligations, each Canadian Grantor acknowledges and agrees that, subject to the provisions of the PPSA, such Canadian Grantor shall continue to be liable for any Borrower Obligations or Guarantor Obligations, as applicable, remaining outstanding and the ABL Collateral Agent shall be entitled to pursue full payment thereof.
SECTION 4 REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Each Canadian Guarantor . To induce the ABL Collateral Agent and the Lenders to enter into the ABL Credit Agreement and to induce the Canadian Facility Lenders to make their respective extensions of credit to the Canadian Borrower thereunder, each Canadian Guarantor hereby represents and warrants to the ABL Collateral Agent and each other Secured Party that the representations and warranties set forth in Section 5 of the ABL Credit Agreement as they relate to such Canadian Guarantor or to the Loan Documents to which such Canadian Guarantor is a party, each of which representations and warranties is hereby incorporated herein by reference, are true and correct in all material respects, and the ABL Collateral Agent and each other Secured Party shall be entitled to rely on each of such representations and warranties as if fully set forth herein; provided that each reference in each such representation and warranty to the Parent Borrower’s knowledge shall, for the purposes of this subsection 4.1 , be deemed to be a reference to such Canadian Guarantor’s knowledge.
 
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4.2 Representations and Warranties of Each Canadian Grantor . To induce the ABL Collateral Agent and the Lenders to enter into the ABL Credit Agreement and to induce the Canadian Facility Lenders to make their respective extensions of credit to the Canadian Borrower thereunder, each Canadian Grantor hereby represents and warrants to the ABL Collateral Agent and each other Secured Party that, in each case after giving effect to the Transactions:
4.2.1 Title; No Other Liens . Except for the security interests granted to the ABL Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement and the other Liens permitted to exist on such Canadian Grantor’s Security Collateral by the ABL Credit Agreement (including, without limitation, subsection 8.2 thereof), such Canadian Grantor owns each item of such Canadian Grantor’s Collateral free and clear of any and all Liens. As of the Closing Date, except as set forth on Schedule 3 , no currently effective financing statement or other similar public notice with respect to any Lien securing Indebtedness on all or any part of such Canadian Grantor’s Security Collateral is on file or of record in any public office in Canada, any province, territory or dependency thereof or the District of Columbia, except such as have been filed in favour of the ABL Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement or as are permitted by the ABL Credit Agreement (including, without limitation, subsection 8.2 thereof) or any other Loan Document or for which financing charge statements or discharges will be delivered on the Closing Date.
4.2.2 Perfected First Priority Liens .
(a) This Agreement is effective to create, as collateral security for the Obligations of such Canadian Grantor, valid and enforceable Liens on such Canadian Grantor’s Security Collateral in favour of the ABL Collateral Agent for the benefit of the Secured Parties, except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
(b) Except with regard to ( i ) Liens (if any) on Specified Assets and ( ii ) any rights in favour of the Canadian federal, provincial or territorial government as required by law (if any), upon the completion of the Filings and, with respect to Instruments, Chattel Paper and Documents of Title, upon the earlier of such Filing or the delivery to and continuing possession by the ABL Collateral Agent of all Instruments, Chattel Paper and Documents of Title a security interest in which is perfected by possession, and upon obtaining and maintenance of “control” (as defined in the STA) by the ABL Collateral Agent or any nominee of the ABL Collateral Agent with respect to Pledged Stock), the Liens created pursuant to this Agreement will constitute valid Liens on and (to the extent provided herein) perfected security interests in such Canadian Grantor’s Security Collateral in favour of the ABL Collateral Agent for the benefit of the Secured Parties, and will be prior to all other Liens of all other Persons, in each case other than Liens permitted to have priority pursuant to subsection 8.2 of the ABL Credit Agreement, and enforceable as such as against all other Persons other than Ordinary Course Transferees, except to the extent that the recording of an assignment or other transfer of title to the ABL Collateral Agent or the recording of other applicable documents in the Canadian Intellectual Property Office may be necessary for perfection or enforceability, and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganisation, moratorium and
 
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other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. As used in this subsection 4.2.2(b) , the following terms shall have the following meanings:
“ Filings ”: the filing or recording of ( i ) the Financing Statements as set forth in Schedule 3 , ( ii ) this Agreement or short form or a notice thereof with respect to Intellectual Property as set forth in Schedule 3 , and ( iii ) any filings after the Closing Date in any other jurisdiction as may be necessary under any Requirement of Law.
“ Financing Statements ”: the financing statements or financing change statements for filing in the jurisdictions listed in Schedule 4A which such schedule includes the jurisdictions where each Canadian Grantor has tangible personal property.
“ Ordinary Course Transferees ”: ( i ) with respect to Goods only, buyers in the ordinary course of business and lessees in the ordinary course of business, ( ii ) with respect to Intangibles only, licensees in the ordinary course of business and (iii) any other Person who is entitled to take free of the Lien pursuant to the PPSA as in effect from time to time in the relevant jurisdiction.
“ Specified Assets ”: the following property and assets of such Canadian Grantor:
 
 	(1)	Patents, Patent Licenses, Trade-marks, Trade-mark Licenses, Industrial Designs and Industrial Design Licenses to the extent that ( a ) Liens thereon cannot be perfected by the filing of financing statements under the PPSA or by the filing and acceptance of this Agreement or intellectual property security agreements in the Canadian Intellectual Property Office or ( b ) such Patents, Patent Licenses, Trade-marks, Trade-mark Licenses, Industrial Designs and Industrial Design Licenses are not, individually or in the aggregate, material to the business of the Parent Borrower and its Subsidiaries taken as a whole;	
 
 	(2)	Copyrights and Copyright Licenses with respect thereto and Accounts or receivables arising therefrom to the extent that the PPSA is not applicable to the creation or perfection of Liens thereon or Liens thereon cannot be perfected by filing and acceptance of intellectual property security agreements in the Canadian Intellectual Property Office;	
 
 	(3)	Collateral for which the perfection of Liens thereon requires filings in or other actions under the laws of jurisdictions outside of Canada and the United States of America (or any province, territory or state thereof, as applicable);	
 
 	(4)	Goods included in Collateral received by any Person from any Canadian Grantor for “sale or return” to the extent of claims of creditors of such Person;	
 
 	(5)	Fixtures, Vehicles, any other assets subject to certificates of title, Money and Cash Equivalents (other than Cash Equivalents constituting Investment Property to the extent a security interest therein is perfected by the filing of a financing statement under the PPSA as in effect from time to time in the relevant jurisdiction);	
 
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 	(6)	Proceeds of Accounts or Inventory which do not themselves constitute Collateral or which do not constitute identifiable cash Proceeds or which have not yet been transferred to or deposited in the Collateral Proceeds Account (if any) or the Concentration Account of a Canadian Grantor subject to the ABL Collateral Agent’s control;	
 
 	(7)	Contracts, Accounts or receivables subject to the Financial Administration Act (Canada);	
 
 	(8)	Uncertificated Securities (to the extent a security interest is not perfected by the filing of a financing statement under the PPSA as in effect from time to time in the relevant jurisdiction);	
 
 	(9)	any Goods in which a security interest is not perfected by filing a financing statement in either the applicable Canadian Grantor’s jurisdiction of organization or the jurisdiction of the location of such Goods; and	
 
 	(10)	any assets specifically requiring perfection through control agreements (including cash, cash equivalents, deposit accounts or other bank or securities accounts), other than ( i ) any assets in which a security interest is automatically perfected by filings under the PPSA, ( ii ) Pledged Stock and ( iii ) DDAs, Concentration Accounts and the Canadian Core Concentration Account (in each case only to the extent required pursuant to subsection 4.16 of the ABL Credit Agreement).	
4.2.3 Jurisdiction of Organization and Location of Collateral . On the date hereof, such Canadian Grantor’s jurisdiction of organization, location of its chief executive office and the location of its Collateral are as specified on Schedule 4B, including the books and records relating to the Collateral .
4.2.4 [ Reserved ]
4.2.5 Accounts Receivable . The amounts represented by such Canadian Grantor to the Administrative Agent or the other Secured Parties from time to time as owing by each account debtor or by all account debtors in respect of such Canadian Grantor’s Accounts Receivable constituting Collateral will at such time be the correct amount, in all material respects, actually owing by such account debtor or debtors thereunder, except to the extent that appropriate reserves therefor have been established on the books of such Canadian Grantor in accordance with GAAP. Unless otherwise indicated in writing to the Administrative Agent, each Account Receivable of such Canadian Grantor arises out of a bona fide sale and delivery of goods or rendition of services by such Canadian Grantor. Such Canadian Grantor has not given any account debtor any deduction in respect of the amount due under any such Account, except in the ordinary course of business, as otherwise permitted by the Loan Documents or as such Canadian Grantor may otherwise advise the Administrative Agent in writing.
4.2.6 Patents, Trade-marks, Copyrights and Industrial Designs . Schedule 5 lists all material Trade-marks, material Copyrights, material Patents and material Industrial Designs, in each case, registered in the Canadian Intellectual Property Office and owned by such Canadian Grantor in its own name as of the date hereof, and all material Trade-mark Licenses, all material Copyright Licenses, all material Patent Licenses and all material Industrial Design Licenses (including, without limitation, material Trade-mark Licenses for registered Trade-marks, material
 
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Copyright Licenses for registered Copyrights, material Patent Licenses for registered Patents and material Industrial Design Licenses for registered Industrial Designs but excluding licenses to commercially available “off-the-shelf” software) owned by such Canadian Grantor in its own name as of the date hereof, in each case, other than Foreign Intellectual Property.
4.2.7 [Reserved].
4.3 Representations and Warranties of Each Canadian Pledgor . To induce the ABL Collateral Agent, the Administrative Agent and the Canadian Facility Lenders to enter into the ABL Credit Agreement and to induce the Canadian Facility Lenders to make their respective extensions of credit to the Canadian Borrower thereunder, each Canadian Pledgor hereby represents and warrants to the ABL Collateral Agent and each other Secured Party that:
4.3.1 Except as provided in subsection 3.3 , the shares of Pledged Stock pledged by such Canadian Pledgor hereunder include all the issued and outstanding shares of all classes of the Capital Stock of such Subsidiary owned by such Canadian Pledgor.
4.3.2 [ Reserved ].
4.3.3 Such Canadian Pledgor is the record and beneficial owner of, and has good title to, the Pledged Securities pledged by it hereunder, free of any and all Liens securing Indebtedness owing to any other Person, except the security interest created by this Agreement and Liens permitted by subsection 8.2 of the ABL Credit Agreement.
4.3.4 Except with respect to security interests in Pledged Securities (if any) constituting Specified Assets, upon delivery to the ABL Collateral Agent of the Certificated Securities evidencing the Pledged Securities held by such Canadian Pledgor together with executed undated stock powers or other instruments of transfer, the security interest created by this Agreement in such Pledged Securities constituting Certificated Securities, assuming the continuing possession of such Pledged Securities by the ABL Collateral Agent will constitute a valid, perfected first priority security interest in such Pledged Securities to the extent provided in and governed by the PPSA enforceable in accordance with its terms against all creditors of such Canadian Pledgor and any Persons purporting to purchase such Pledged Securities from such Canadian Pledgor, in each case subject to Liens permitted by subsection 8.2 of the ABL Credit Agreement to attach to such Pledged Securities, and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
4.3.5 Except with respect to security interests in Pledged Securities (if any) constituting Specified Assets, upon the earlier of ( x ) the filing of the Financing Statements or of financing statements delivered pursuant to subsection 7.9 of the ABL Credit Agreement in the relevant jurisdiction and ( y ) the obtaining and maintenance of “control” (as described in the STA) by the ABL Collateral Agent (or its agent appointed for purposes of perfection), of all Pledged Securities that constitute Uncertificated Securities, the security interest created by this Agreement in such Pledged Securities that constitute Uncertificated Securities and upon filing of the financing statements listed on Schedule 3 , will constitute a valid, perfected (and in the case of clause (y), first priority) security interest in such Pledged Securities constituting Uncertificated Securities to the extent provided in and governed by the STA, enforceable in accordance with its
 
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terms against all creditors of such Canadian Pledgor and any persons purporting to purchase such Pledged Securities from such Canadian Pledgor, to the extent provided in and governed by the STA, in each case subject to Liens permitted by subsection 8.2 of the ABL Credit Agreement to attach to such Pledged Securities, and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
4.4 Representations and Warranties of Each Canadian Granting Party .
4.4.1 As of the Closing Date, Schedule 4B sets forth the full and exact legal name (as it appears in each respective certificate or articles of incorporation, limited liability company certificate of formation or similar organizational documents, in each case as amended to date), the type of organization, the jurisdiction of organization (or formation, as applicable), the organizational identification number and the principal place of business (or chief executive office address if such Canadian Grantor has more than one principal place of business) and the preferred mailing address (if different than chief executive office) of each Canadian Granting Party.
SECTION 5 COVENANTS
5.1 Covenants of Each Canadian Guarantor . Each Canadian Guarantor covenants and agrees with the ABL Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of ( i ) the date upon which the Canadian Facility Revolving Credit Loans, any Reimbursement Obligations with respect to Canadian Facility Letters of Credit, and all other Obligations then due and owing, shall have been paid in full in cash, no Canadian Facility Letter of Credit shall be outstanding (except for Canadian Facility Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments shall have terminated, ( ii ) as to any Canadian Guarantor, a sale or other disposition of all the Capital Stock of such Canadian Guarantor (other than to the Canadian Borrower or a Canadian Guarantor), or any other transaction or occurrence as a result of which such Canadian Guarantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the ABL Credit Agreement or ( iii ) as to any Canadian Guarantor, such Canadian Guarantor becoming an Excluded Subsidiary, such Canadian Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such Canadian Guarantor or any of its Restricted Subsidiaries.
5.2 Covenants of Each Canadian Grantor . Each Canadian Grantor covenants and agrees with the ABL Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of ( i ) the date upon which the Canadian Facility Revolving Credit Loans, any Reimbursement Obligations with respect to Canadian Facility, and all other Obligations then due and owing shall have been paid in full in cash, no Canadian Facility Letter of Credit shall be outstanding (except for Canadian Facility Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments shall have terminated, ( ii ) as to any Canadian Grantor, a sale or other disposition of all the Capital Stock of such Canadian Grantor (other than to the Canadian Borrower or a Canadian Guarantor), or any other transaction or occurrence as a result of which such Canadian Grantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the ABL Credit Agreement or ( iii ) as to any Canadian Grantor, such Canadian Grantor becoming an Excluded Subsidiary:
5.2.1 Delivery of Instruments and Chattel Paper . If any amount payable under or in connection with any of such Canadian Grantor’s Collateral shall be or become evidenced by any Instrument or Chattel Paper, such Canadian Grantor shall (except as provided in the following sentence) be entitled to retain possession of all Collateral of such Canadian Grantor evidenced by any Instrument or Chattel Paper, and shall hold all such Collateral in trust for the ABL Collateral Agent, for the benefit of the Secured Parties. In the event that an Event of Default shall have occurred and be continuing, upon the request of the ABL Collateral Agent such Instrument or Chattel Paper shall be promptly delivered to the ABL Collateral Agent, duly endorsed in a manner reasonably satisfactory to the ABL Collateral Agent, to be held as Collateral pursuant to this Agreement. Such Canadian Grantor shall not permit any other Person to possess any such Collateral at any time other than in connection with any sale or other disposition of such Collateral in a transaction permitted by the ABL Credit Agreement.
 
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5.2.2 [Reserved]
5.2.3 Payment of Obligations . Such Canadian Grantor will pay and discharge or otherwise satisfy before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon such Canadian Grantor’s Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, material claims for labour, materials and supplies) against or with respect to such Canadian Grantor’s Collateral, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of such Canadian Grantor and except to the extent that failure to do so, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
5.2.4 Maintenance of Perfected Security Interest; Further Documentation .
(a) Such Canadian Grantor shall maintain the security interest created by this Agreement in such Canadian Grantor’s Collateral as a perfected security interest as and to the extent described in subsection 4.2.2 and to defend the security interest created by this Agreement in such Canadian Grantor’s Collateral against the claims and demands of all Persons whomsoever (subject to the other provisions hereof).
(b) Such Canadian Grantor will furnish to the ABL Collateral Agent from time to time statements and schedules further identifying and describing such Canadian Grantor’s Collateral and such other reports in connection with such Canadian Grantor’s Collateral as the ABL Collateral Agent may reasonably request in writing, all in reasonable detail.
(c) At any time and from time to time, upon the written request of the ABL Collateral Agent, and at the sole expense of such Canadian Grantor, such Canadian Grantor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the ABL Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such Canadian Grantor, including, without limitation, the filing of any financing statements or financing change statements under the PPSA as in effect from time to time in any Canadian jurisdiction with respect to the security interests created hereby; provided that, notwithstanding any other provision of this Agreement or any other Loan Document, neither the Canadian Borrower nor any Canadian Grantor will be required to ( i ) take any action in any jurisdiction other than Canada, or required by the laws of any such non-Canadian jurisdiction, or enter into any security agreement
 
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or pledge agreement governed by the laws of any such non-Canadian jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of Canada or to perfect any security interests (or other Liens) in any Collateral, ( ii ) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except ( A ) as required by subsection 4.16 of the ABL Credit Agreement and ( B ) in the case of Security Collateral that constitutes Capital Stock or Intercompany Notes in certificated form, delivering such Capital Stock or Intercompany Notes to the ABL Collateral Agent (or another Person as required under any applicable Intercreditor Agreement), ( iii ) take any action in order to perfect any security interests in any assets specifically requiring perfection through control (including cash, cash equivalents, deposit accounts or securities accounts) (except, in each case ( A ) as required by subsection 4.16 of the ABL Credit Agreement and ( B ) to the extent consisting of proceeds perfected by the filing of a financing statement under the PPSA or, in the case of Pledged Stock, by being held by the ABL Collateral Agent or an Additional Agent as agent for the ABL Collateral Agent), ( iv ) deliver landlord lien waivers, estoppels or collateral access letters or ( v ) file any fixture filing with respect to any security interest in fixtures affixed to or attached to any real property constituting Excluded Assets.
(d) The ABL Collateral Agent may grant extensions of time for the creation and perfection of security interests in, or obtaining a delivery of documents or other deliverables with respect to, particular assets of any Canadian Grantor where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or any other Security Documents.
5.2.5 Changes in Name, Jurisdiction of Organization, etc . Such Canadian Grantor will give prompt written notice to the ABL Collateral Agent of any change in its name, legal form or jurisdiction of organization (whether by amalgamation or otherwise) (and in any event, within 30 days of such change); provided that, promptly after receiving a written request therefor from the ABL Collateral Agent, such Canadian Grantor shall deliver to the ABL Collateral Agent all additional financing statements or financing change statements and other documents reasonably necessary or desirable to maintain the validity, perfection and priority of the security interests created hereunder and other documents reasonably requested by the ABL Collateral Agent to maintain the validity, perfection and priority of the security interests as and to the extent provided for herein and upon receipt of such additional financing statements the ABL Collateral Agent shall either promptly file such additional financing statements or approve the filing of such additional financing statements by such Canadian Grantor. Upon any such approval such Canadian Grantor shall proceed with the filing of the additional financing statements and deliver copies (or other evidence of filing) of the additional filed financing statements to the ABL Collateral Agent.
5.2.6 Notices . Such Canadian Grantor will advise the ABL Collateral Agent promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or permitted by the ABL Credit Agreement (including Liens permitted by subsection 8.2 of the ABL Credit Agreement) on any of such Canadian Grantor’s Collateral which would materially adversely affect the ability of the ABL Collateral Agent to exercise any of its remedies hereunder; and
(b) the occurrence of any other event which would reasonably be expected to have a material adverse effect on the security interests created hereby.
 
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5.2.7 Pledged Stock . In the case of each Canadian Grantor that is an Issuer, such Issuer agrees that ( i ) it will be bound by the terms of this Agreement relating to the Pledged Stock other than ULC Shares issued by it and will comply with such terms insofar as such terms are applicable to it, ( ii ) it will notify the ABL Collateral Agent promptly in writing of the occurrence of any of the events described in subsection 5.3.1 with respect to the Pledged Stock issued by it and ( iii ) the terms of subsections 6.3(c) and 6.7 shall apply to it, mutatis mutandis , with respect to all actions that may be required of it pursuant to subsection 6.3(c) or 6.7 with respect to the Pledged Stock other than ULC Shares issued by it.
5.2.8 Accounts Receivable .
(a) With respect to Accounts Receivable, such Canadian Grantor will not, other than in the ordinary course of business or as permitted by the Loan Documents, ( i ) grant any extension of the time of payment of any of such Canadian Grantor’s Accounts Receivable, ( ii ) compromise or settle any such Account Receivable for less than the full amount thereof, ( iii ) release, wholly or partially, any Person liable for the payment of any such Account Receivable, ( iv ) allow any credit or discount whatsoever on any such Account Receivable, ( v ) amend, supplement or modify any such Account Receivable unless such extensions, compromises, settlements, releases, credits, discounts, amendments, supplements or modifications would not reasonably be expected to materially adversely affect the value of the Accounts Receivable taken as a whole or ( vi ) evidence any Accounts Receivable by an Instrument as Chattel Paper.
(b) Such Canadian Grantor will deliver to the ABL Collateral Agent a copy of each material demand, notice or document received by it from any obligor under the Accounts Receivable that disputes the validity or enforceability of more than 7.5% of the aggregate amount of the then outstanding Accounts Receivable.
5.2.9 Maintenance of Records . Such Canadian Grantor will keep and maintain at its own cost and expense reasonably satisfactory records of its Collateral, including, without limitation, a record of all payments received and all credits granted with respect to such Collateral, and shall mark such records to evidence this Agreement and the Liens and the security interests created hereby.
5.2.10 Acquisition of Intellectual Property . Concurrently with the delivery of the annual Compliance Certificate pursuant to subsection 7.2(a) of the ABL Credit Agreement, the Borrower Representative will notify the ABL Collateral Agent of any acquisition by the Canadian Grantor of ( i ) any registration of any material Copyright, Patent, Trade-mark or Industrial Design or ( ii ) any exclusive rights under a material Copyright License, Patent License, Trade-mark License or Industrial Design License constituting Collateral, and shall take such actions as may be reasonably requested by the ABL Collateral Agent (but only to the extent such actions are within such Canadian Grantor’s control) to perfect the security interest granted to the ABL Collateral Agent and the other Secured Parties therein, to the extent provided herein in respect of any Copyright, Patent, Trade-mark or Industrial Design constituting Collateral, by ( x ) the execution and delivery of an amendment or supplement to this Agreement (or amendments to any such agreement previously executed or delivered by such Canadian Grantor) and/or ( y ) the making of appropriate registrations ( I ) of financing statements under the PPSA as in effect from time to time in any applicable jurisdiction and/or ( II ) in the Canadian Intellectual Property Office, or with any other applicable Canadian governmental authority.
5.2.11 [Reserved] .
 
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5.2.12 [Reserved] .
5.2.13 Deposit Accounts; etc . Such Canadian Grantor shall take, or refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no breach of subsection 4.16 of the ABL Credit Agreement is caused by the failure to take such action or to refrain from taking such action by such Canadian Grantor or any of its Subsidiaries.
5.2.14 Protection of Trade-marks . Such Canadian Grantor shall, with respect to any Trade-marks that are material to the business of such Canadian Grantor, use commercially reasonable efforts not to cease the use of any of such Trade-marks or fail to maintain the level of the quality of products sold and services rendered under any of such Trade-marks at a level at least substantially consistent with the quality of such products and services as of the date hereof, and shall use commercially reasonable efforts to take all steps reasonably necessary to ensure that licensees of such Trade-marks use such consistent standards of quality, in each case, except as would not reasonably be expected to have a Material Adverse Effect.
5.2.15 Protection of Intellectual Property . Subject to and except as permitted by the ABL Credit Agreement, such Canadian Grantor shall use commercially reasonable efforts not to do any act or omit to do any act whereby any of the Intellectual Property that is material to the business of Canadian Grantor may lapse, expire, or become abandoned, or unenforceable, in each case, except as would not reasonably be expected to have a Material Adverse Effect.
5.2.16 Assignment of Letter-of-Credit Rights . In the case of any letters of credit not constituting Excluded Assets acquired following the Closing Date and constituting Collateral, such Canadian Grantor shall use its commercially reasonable efforts to promptly obtain the consent of the issuer thereof and any nominated person thereon to the assignment of the proceeds of the related letter of credit.
5.3 Covenants of Each Canadian Pledgor . Each Canadian Pledgor covenants and agrees with the ABL Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of ( i ) the Canadian Facility Revolving Credit Loans, any Reimbursement Obligations with respect to Canadian Facility Letters of Credit, and all other Obligations then due and owing shall have been paid in full in cash, no Canadian Facility Letter of Credit shall be outstanding (except for Canadian Facility Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender) and the Commitments shall have terminated, ( ii ) as to any Canadian Pledgor, a sale or other disposition of all the Capital Stock of such Canadian Pledgor (other than to the Canadian Borrower or a Canadian Guarantor), or any other transaction or occurrence as a result of which such Canadian Pledgor ceases to be a Restricted Subsidiary of the Parent Borrower, in each that is permitted under the ABL Credit Agreement or ( iii ) as to any Canadian Pledgor, such Canadian Pledgor becoming an Excluded Subsidiary:
5.3.1 Additional Shares . If such Canadian Pledgor shall, as a result of its ownership of its Pledged Stock, become entitled to receive or shall receive any Certificated Securities (including, without limitation, any Certificated Securities representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any Certificated Securities issued in connection with any reorganization), stock option or similar rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Canadian Pledgor shall accept the same as the agent of the ABL Collateral Agent
 
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and the other Secured Parties, hold the same in trust for the ABL Collateral Agent and the other Secured Parties and deliver the same forthwith to the ABL Collateral Agent (who will hold the same on behalf of the Secured Parties as Pledged Collateral) in the exact form received, duly endorsed by such Canadian Pledgor to the ABL Collateral Agent, as applicable, if required, together with an undated stock power covering such Certificated Securities duly executed in blank by such Canadian Grantor, to be held by the ABL Collateral Agent subject to the terms hereof, as additional collateral security for the Obligations (subject to subsection 3.3 ). Any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer (except any liquidation or dissolution of any Subsidiary of the Parent Borrower not prohibited by the ABL Credit Agreement) shall be paid over to the ABL Collateral Agent to be held by the ABL Collateral Agent subject to the terms hereof as additional collateral security for the Obligations, and, except in the case of ULC Shares, in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favour of the ABL Collateral Agent, be delivered to the ABL Collateral Agent to be held by the ABL Collateral Agent subject to the terms hereof as additional collateral security for the Obligations, in each case except as otherwise provided by the applicable Intercreditor Agreement. If any sums of money or property so paid or distributed in respect of the Pledged Stock shall be received by such Canadian Pledgor, such Canadian Pledgor shall, until such money or property is paid or delivered to the ABL Collateral Agent hold such money or property in trust for the Secured Parties, segregated from other funds of such Canadian Pledgor, as additional collateral security for the Obligations.
5.3.2 [Reserved] .
5.3.3 Pledged Notes . Such Canadian Pledgor shall, within 60 days (or such longer period as may be agreed by the ABL Collateral Agent in its sole discretion) following the date of this Agreement (or on such later date upon which it becomes a party hereto pursuant to subsection 9.15 ), deliver to the ABL Collateral Agent all Pledged Notes then held by such Canadian Pledgor endorsed in blank or, at the request of the ABL Collateral Agent, endorsed to the ABL Collateral Agent. Furthermore, within ten Business Days after any Canadian Pledgor obtains a Pledged Note, such Canadian Pledgor shall cause such Pledged Note to be delivered to the ABL Collateral Agent endorsed in blank or, at the request of the ABL Collateral Agent, endorsed to the ABL Collateral Agent.
5.3.4 Maintenance of Security Interest .
(a) Such Canadian Pledgor shall maintain the security interest created by this Agreement in such Canadian Pledgor’s Pledged Collateral as a security interest having at least the perfection and priority described in subsection 4.3.4 or subsection 4.3.5, as applicable and shall defend such security interest against the claims and demands of all Persons whomsoever. At any time and from time to time, upon the written request of the ABL Collateral Agent and at the sole expense of such Canadian Pledgor, such Canadian Pledgor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the ABL Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such Canadian Pledgor; provided , that notwithstanding any other provision of this Agreement or any other Loan Documents, neither the Parent Borrower nor any other Canadian Pledgor will be required to ( i ) take any action in any jurisdiction other Canada, or required by the laws of any such non-Canadian jurisdiction,
 
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or enter into any security agreement or pledge agreement governed by the laws of any such non-Canadian jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of Canada or to perfect any security interests (or other Liens) in any Collateral, ( ii ) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except ( A ) as required by subsection 4.16 of the ABL Credit Agreement and ( B ) in the case of Security Collateral that constitutes Capital Stock or Intercompany Notes in certificated form, delivering such Capital Stock or Intercompany Notes to the ABL Collateral Agent (or another Person as required under any applicable Intercreditor Agreement), ( iii ) take any action in order to perfect any security interests in any assets specifically requiring perfection through control (including cash, cash equivalents, deposit accounts or securities accounts) constituting Excluded Assets (except, in each case, to the extent consisting of proceeds perfected by the filing of a financing statement under the PPSA or, in the case of Pledged Stock, by being held by the ABL Collateral Agent or an Additional Agent as agent for the ABL Collateral Agent), ( iv ) deliver landlord lien waivers, estoppels or collateral access letters or ( v ) file any fixture filing with respect to any security interest in fixtures affixed to or attached to any real property constituting Excluded Assets.
(b) The ABL Collateral Agent may grant extensions of time for the creation and perfection of security interests in, or obtaining or delivery of documents or other deliverables with respect to, particular assets of any Canadian Pledgor where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or any other Security Documents.
SECTION 6 REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Accounts .
(a) At any time and from time to time after the occurrence and during the continuance of an Event of Default, the ABL Collateral Agent shall have the right to make test verifications of the Accounts Receivable constituting Collateral in any reasonable manner and through any reasonable medium that it reasonably considers advisable, and the relevant Canadian Grantor shall furnish all such assistance and information as the ABL Collateral Agent may reasonably require in connection with such test verifications. At any time and from time to time after the occurrence and during the continuance of an Event of Default upon the ABL Collateral Agent’s reasonable request and at the expense of the relevant Canadian Grantor, such Canadian Grantor shall cause independent public or chartered accountants or others reasonably satisfactory to the ABL Collateral Agent to furnish to the ABL Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts Receivable constituting Collateral.
(b) The ABL Collateral Agent hereby authorizes each Canadian Grantor to collect such Canadian Grantor’s Accounts Receivable and the ABL Collateral Agent may curtail or terminate said authority at any time, without limiting the ABL Collateral Agent’s rights under subsection 4.16 of the ABL Credit Agreement, after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement. If required by the ABL Collateral Agent at any time, without limiting the ABL Collateral Agent’s rights under subsection 4.16 of the ABL Credit Agreement, after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement any Proceeds constituting payments or other cash Proceeds of Accounts Receivable constituting Collateral, when collected by such Canadian Grantor, ( i ) shall be forthwith (and, in any event, within two Business Days of receipt by such Canadian Grantor) deposited in, or otherwise transferred by such Canadian Grantor to, the Collateral Proceeds Account, subject to withdrawal by the
 
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ABL Collateral Agent for the account of the Secured Parties only as provided in subsection 6.5 , and ( ii ) until so turned over, shall be held by such Canadian Grantor in trust for the ABL Collateral Agent and the other Secured Parties, segregated from other funds of such Canadian Grantor. All Proceeds constituting collections or other cash Proceeds of Accounts Receivable constituting Collateral while held by the Collateral Account Bank (or by any Canadian Grantor in trust for the benefit of the ABL Collateral Agent and the other Secured Parties) shall continue to be collateral security for all of the Obligations and shall not constitute payment thereof until applied as hereinafter provided. At any time when an Event of Default specified in subsection 9(a) of the ABL Credit Agreement has occurred and is continuing at the ABL Collateral Agent’s election, each of the ABL Collateral Agent and the Administrative Agent may apply all or any part of the funds on deposit in the Collateral Proceeds Account established by the relevant Canadian Grantor to the payment of the Obligations of such Canadian Grantor then due and owing, such application to be made as set forth in subsection 6.5 . So long as no Event of Default has occurred and is continuing, the funds on deposit in the Collateral Proceeds Account shall be remitted as provided in subsection 6.1(d) .
(c) At any time and from time to time after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement at the ABL Collateral Agent’s request, each Canadian Grantor shall deliver to the ABL Collateral Agent copies or, if required by the ABL Collateral Agent for the enforcement thereof or foreclosure thereon, originals of all documents held by such Canadian Grantor evidencing, and relating to, the agreements and transactions which gave rise to such Canadian Grantor’s Accounts Receivable constituting Collateral, including, without limitation, all statements relating to such Canadian Grantor’s Accounts Receivable constituting Collateral and all orders, invoices and shipping receipts related thereto.
(d) So long as no Event of Default has occurred and is continuing the ABL Collateral Agent shall instruct the Collateral Account Bank to promptly remit any funds on deposit in each Canadian Grantor’s Collateral Proceeds Account to any account designated by such Canadian Grantor, maintained in compliance with the provisions of subsection 4.16 of the ABL Credit Agreement. In the event that an Event of Default has occurred and is continuing the ABL Collateral Agent, at its option, may require that each Collateral Proceeds Account and the Concentration Account of each Canadian Grantor be established at the ABL Collateral Agent or another institution reasonably acceptable to the ABL Collateral Agent. Subject to subsection 4.16 of the ABL Credit Agreement, each Canadian Grantor shall have the right, at any time and from time to time, to withdraw such of its own funds from its own Concentration Account, and to maintain such balances in its Concentration Account, as it shall deem to be necessary or desirable.
6.2 Communications with Obligors; Canadian Grantors Remain Liable .
(a) The ABL Collateral Agent in its own name or in the name of others, may at any time and from time to time after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement communicate with obligors under the Accounts Receivable and parties to the Contracts (in each case, to the extent constituting Collateral) to verify with them to the ABL Collateral Agent’s satisfaction the existence, amount and terms of any Accounts Receivable or Contracts.
(b) Upon the request of the ABL Collateral Agent at any time after the occurrence and during the continuance of an Event of Default specified in subsection 9(a) of the ABL Credit Agreement each Canadian Grantor shall notify obligors on such Canadian Grantor’s Accounts Receivable and parties to such Canadian Grantor’s Contracts (in each case, to the extent constituting Collateral) that such Accounts Receivable and such Contracts have been assigned to the ABL Collateral Agent, for the benefit of the Secured Parties, and that payments in respect thereof shall be made directly to the ABL Collateral Agent.
 
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(c) Anything herein to the contrary notwithstanding, each Canadian Grantor shall remain liable under each of such Canadian Grantor’s Accounts Receivable to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. None of the ABL Collateral Agent, the Administrative Agent or any other Secured Party shall have any obligation or liability under any Accounts Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the ABL Collateral Agent or any other Secured Party of any payment relating thereto, nor shall the ABL Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Canadian Grantor under or pursuant to any Accounts Receivable (or any agreement giving rise thereto) to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Stock .
(a) Unless an Event of Default shall have occurred and be continuing and the ABL Collateral Agent shall have given notice to the relevant Canadian Pledgor of the ABL Collateral Agent’s intent to exercise its corresponding rights pursuant to subsection 6.3(b), each Canadian Pledgor shall be permitted to receive all cash dividends and distributions paid in respect of the Pledged Stock (subject to the last two sentences of subsection 5.3.1 ) and all payments made in respect of the Pledged Notes, to the extent permitted in the ABL Credit Agreement, and to exercise all voting and corporate rights with respect to the Pledged Stock; provided , however , that no vote shall be cast or corporate right exercises or such other action taken which is prohibited by, or would result in any violation of, any provision of the ABL Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the ABL Collateral Agent shall give written notice of its intent to exercise such rights to the relevant Canadian Pledgor or Canadian Pledgors, ( i ) the ABL Collateral Agent, subject to the terms of any applicable Intercreditor Agreement, shall have the right, except in the case of ULC Shares, to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Obligations of the relevant Canadian Pledgor as provided in the ABL Credit Agreement consistent with subsection 6.5 , and ( ii ) except in the case of ULC Shares, any or all of the Pledged Stock shall be registered in the name of the ABL Collateral Agent or a nominee of any thereof, as applicable, subject to the terms of any applicable Intercreditor Agreement, and the ABL Collateral Agent, or the nominee, as applicable, subject to the terms of any applicable Intercreditor Agreement, may thereafter exercise ( x ) except in the case of ULC Shares, all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and ( y ) except in the case of ULC Shares, any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock other than ULC Shares upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by the relevant Canadian Pledgor or the ABL Collateral Agent, subject to the terms of any applicable Intercreditor Agreement, of any right, privilege or option pertaining to such Pledged Stock other than ULC Shares, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock other than ULC Shares with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the ABL Collateral Agent may
 
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reasonably determine), all without liability (other than for its gross negligence or willful misconduct) except to account for property actually received by it, but the ABL Collateral Agent shall have no duty to any Canadian Pledgor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing, provided that the ABL Collateral Agent, shall not exercise any voting or other consensual rights pertaining to the Pledged Stock in any way that would constitute an exercise of the remedies described in subsection 6.6 other than in accordance with subsection 6.6 .
(c) Each Canadian Pledgor hereby authorizes and instructs each Issuer or maker of any Pledged Stock pledged by such Canadian Pledgor hereunder other than ULC Shares to, subject to any applicable Intercreditor Agreement, ( i ) comply with any instruction received by it from the ABL Collateral Agent in writing with respect to Capital Stock in such Issuer that ( x ) states that an Event of Default has occurred and is continuing and ( y ) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Canadian Pledgor, and each Canadian Pledgor agrees that each Issuer or maker shall be fully protected in so complying, and ( ii ) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Stock directly to the ABL Collateral Agent.
6.4 Proceeds to Be Turned Over to the ABL Collateral Agent . In addition to the rights of the ABL Collateral Agent specified in subsection 6.1 with respect to payments of Accounts Receivable constituting Collateral, if an Event of Default shall occur and be continuing, and the ABL Collateral Agent shall have instructed any Canadian Grantor to do so, all Proceeds of Collateral received by such Canadian Grantor consisting of cash, cheques and other Cash Equivalent items shall be held by such Canadian Grantor in trust for the ABL Collateral Agent and the other Secured Parties hereto, segregated from other funds of such Canadian Grantor, and shall, forthwith upon receipt by such Canadian Grantor, be turned over to the ABL Collateral Agent in the exact form received by such Canadian Grantor (duly endorsed by such Canadian Grantor to the ABL Collateral Agent). All Proceeds of Security Collateral received by the ABL Collateral Agent hereunder shall be held by the ABL Collateral Agent in the relevant Collateral Proceeds Account maintained under its sole dominion and control. All Proceeds of Security Collateral while held by the ABL Collateral Agent in such Collateral Proceeds Account (or by the relevant Canadian Grantor in trust for the ABL Collateral Agent and the other Secured Parties) shall continue to be held as collateral security for all the Obligations of such Canadian Grantor and shall not constitute payment thereof until applied as provided in subsection 6.5 and any applicable Intercreditor Agreement.
6.5 Application of Proceeds . It is agreed that if an Event of Default shall occur and be continuing, any and all Proceeds of the relevant Canadian Granting Party’s Security Collateral received by the ABL Collateral Agent (whether from the relevant Canadian Granting Party or otherwise) shall be held by the ABL Collateral Agent for the benefit of the Secured Parties as collateral security for the Obligations of the relevant Canadian Granting Party (whether matured or unmatured), and/or then or at any time thereafter may, in the sole discretion of the ABL Collateral Agent, subject to any applicable Intercreditor Agreement, be applied by the ABL Collateral Agent against the Obligations of the relevant Canadian Granting Party then due and owing in the order of priority set forth in the ABL Credit Agreement.
6.6 PPSA and Other Remedies .
(a) If an Event of Default shall occur and be continuing, subject to the terms of any applicable Intercreditor Agreement, the ABL Collateral Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations to the extent permitted by
 
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applicable law, all rights and remedies of a secured party under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-up and Restructuring Act (Canada) and the PPSA and under any other applicable law and in equity. Subject to subsection 3.3(d) , without limiting the generality of the foregoing, to the extent permitted by applicable law, subject to the terms of any applicable Intercreditor Agreement, the ABL Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Canadian Granting Party or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances, forthwith collect, receive, appropriate and realize upon the Security Collateral, or any part thereof, and/or may forthwith, subject to any existing reserved rights or licenses, sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Security Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the ABL Collateral Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. To the extent permitted by law, subject to the terms of any applicable Intercreditor Agreement, the ABL Collateral Agent or any other Secured Party shall have the right, upon any such sale or sales, to purchase the whole or any part of the Security Collateral so sold, free of any right or equity of redemption in such Canadian Grantor, which right or equity is hereby waived and released. Each Canadian Granting Party further agrees, at the ABL Collateral Agent’s request (subject to the terms of any applicable Intercreditor Agreement), to assemble the Security Collateral and make it available to the ABL Collateral Agent at places which the ABL Collateral Agent shall reasonably select, whether at such Canadian Granting Party’s premises or elsewhere. The ABL Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this subsection 6.6 , after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Security Collateral or in any way relating to the Security Collateral or the rights of the ABL Collateral Agent and the other Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations of the relevant Canadian Granting Party then due and owing, in the order of priority specified in subsection 6.5 , and only after such application and after the payment by the ABL Collateral Agent of any other amount required by any provision of law, need the ABL Collateral Agent account for the surplus, if any, to such Canadian Granting Party. To the extent permitted by applicable law, ( i ) such Canadian Granting Party waives all claims, damages and demands it may acquire against the ABL Collateral Agent or any other Secured Party arising out of the repossession, retention or sale of the Security Collateral, other than any such claims, damages and demands that may arise from the gross negligence or willful misconduct of any of the ABL Collateral Agent or such other Secured Party, and ( ii ) if any notice of a proposed sale or other disposition of Security Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.
(b) The ABL Collateral Agent may appoint, remove or reappoint by instrument in writing, any Person or Persons, whether an officer or officers or an employee or employees of any Canadian Granting Party or not, to be an interim receiver, receiver or receivers (hereinafter called a “ Receiver ,” which term when used herein shall include a receiver and manager) of such Collateral (including any interest, income or profits therefrom). Any such Receiver shall, to the extent permitted by applicable law, be deemed the agent of such Canadian Granting Party and not of the ABL Collateral Agent, and the ABL Collateral Agent shall not be in any way responsible for any misconduct, negligence or non-feasance on the part of any such Receiver or its servants, agents or employees. Subject to the provisions of the instrument appointing it, any such Receiver shall, if an Event of Default shall occur and be continuing, ( i ) have such powers as have been granted to the ABL Collateral Agent under this Section 6 and ( ii ) be
 
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entitled to exercise such powers at any time that such powers would otherwise be exercisable by the ABL Collateral Agent under this Section 6 , which powers shall include, but are not limited to, the power to take possession of the Collateral, to preserve the Collateral or its value, to carry on or concur in carrying on all or any part of the business of such Canadian Granting Party and, subject to existing reserved rights or licenses, to sell, lease, license or otherwise dispose of or concur in selling, leasing, licensing or otherwise disposing of the Collateral. To facilitate the foregoing powers, any such Receiver may, to the exclusion of all others, including any Canadian Granting Party, if an Event of Default shall occur and be continuing, enter upon, use and occupy all premises owned or occupied by such Canadian Granting Party wherein the Collateral may be situated, maintain the Collateral upon such premises, borrow money on a secured or unsecured basis and use the Collateral directly in carrying on such Canadian Granting Party’s business or as security for loans or advances to enable the Receiver to carry on such Canadian Granting Party’s business or otherwise, as such Receiver shall, in its reasonable discretion, determine. Except as may be otherwise directed by the ABL Collateral Agent, all money received from time to time by such Receiver in carrying out his/her/its appointment shall be received in trust for and be paid over to the ABL Collateral Agent and any surplus shall be applied in accordance with applicable law. Every such Receiver may, in the discretion of the ABL Collateral Agent, be vested with, in addition to the rights set out herein, all or any of the rights and powers of the Administrative Agent, the ABL Collateral Agent described in the ABL Credit Agreement, the PPSA, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) or the Winding-Up and Restructuring Act (Canada).
6.7 Registration Rights .
(a) Subject to any applicable Intercreditor Agreement, if the ABL Collateral Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to subsection 6.6 , and if in the reasonable opinion of the ABL Collateral Agent it is necessary or reasonably advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the applicable securities legislation, the relevant Canadian Pledgor will use its reasonable best efforts to cause the Issuer thereof to ( i ) execute and deliver, and use its reasonable best efforts to cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the reasonable opinion of the ABL Collateral Agent, necessary or advisable to register such Pledged Stock, or that portion thereof to be sold, under the provisions of the applicable securities legislation, ( ii ) use its reasonable best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of not more than one year from the date of the first public offering of such Pledged Stock, or that portion thereof to be sold, and ( iii ) make all amendments thereto and/or to the related prospectus which, in the reasonable opinion of the ABL Collateral Agent, are necessary or advisable, all in conformity with the requirements of the applicable securities legislation and the rules and regulations of the applicable securities commission or regulation applicable thereto. Such Canadian Pledgor agrees to use its reasonable best efforts to cause such Issuer to comply with the provisions of the securities laws of any and all provinces and territories that the ABL Collateral Agent shall reasonably designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) that will satisfy the provisions of Section 11(a) of the applicable securities legislation.
(b) Such Canadian Pledgor recognizes that the ABL Collateral Agent may be unable to effect a public sale of any or all such Pledged Stock, by reason of certain prohibitions contained in applicable securities legislation or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Such Canadian Pledgor acknowledges and agrees that any such private sale may result in prices and other
 
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terms less favourable than if such sale were a public sale and, notwithstanding such circumstances, to the extent permitted by applicable law, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The ABL Collateral Agent shall not be under any obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable securities legislation, even if such Issuer would agree to do so.
(c) Such Canadian Pledgor agrees to use its reasonable best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of such Pledged Stock pursuant to this subsection 6.7 valid and binding and in compliance with any and all other applicable Requirements of Law. Such Canadian Pledgor further agrees that a breach of any of the covenants contained in this subsection 6.7 will cause irreparable injury to the ABL Collateral Agent and the Lenders, that the ABL Collateral Agent and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this subsection 6.7 shall be specifically enforceable against such Canadian Pledgor, and to the extent permitted by applicable law, such Canadian Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants (except for a defense that no Event of Default has occurred or is continuing under the ABL Credit Agreement).
6.8 Waiver; Deficiency . Each Canadian Granting Party shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Security Collateral are insufficient to pay in full, the Canadian Facility Revolving Credit Loans, Reimbursement Obligations constituting Obligations of such Canadian Granting Party and, to the extent then due and owing, all other Obligations of such Canadian Granting Party and the reasonable fees and disbursements of any legal counsel employed by the ABL Collateral Agent or any other Secured Party to collect such deficiency.
SECTION 7 THE ABL COLLATERAL AGENT
7.1 ABL Collateral Agent’s Appointment as Attorney-in-Fact, etc.
(a) Each Canadian Granting Party hereby irrevocably constitutes and appoints the ABL Collateral Agent and any authorized officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Canadian Granting Party and in the name of such Canadian Granting Party or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be reasonably necessary or desirable to accomplish the purposes of this Agreement to the extent permitted by applicable law, provided that the ABL Collateral Agent agrees not to exercise such power except upon the occurrence and during the continuance of any Event of Default and in accordance with and subject to each applicable Intercreditor Agreement. Without limiting the generality of the foregoing, at any time when an Event of Default has occurred and is continuing (in each case to the extent permitted by applicable law and subject to each applicable Intercreditor Agreement), ( x ) each Canadian Pledgor hereby gives the ABL Collateral Agent the power and right, on behalf of such Canadian Pledgor, without notice or assent by such Canadian Pledgor, to execute, in connection with any sale provided for in subsection 6.6 or 6.7 , any endorsements, assessments or other instruments of conveyance or transfer with respect to such Canadian Pledgor’s Pledged Collateral other than any ULC Shares and ( y ) each Canadian Grantor hereby gives the ABL Collateral Agent the power and right, on behalf of such Canadian Grantor, without notice to or assent by such Canadian Grantor, to do any or all of the following:
(i) in the name of such Canadian Grantor or its own name, or otherwise, take possession of and endorse and collect any cheques, drafts, notes, acceptances or other instruments for the payment of moneys due under any Accounts Receivable of such Canadian Grantor that constitutes Collateral or with respect to any other Collateral of such Canadian Grantor and file any claim or take any other action or institute any proceeding in any court of law or equity or otherwise deemed appropriate by the ABL Collateral Agent for the purpose of collecting any and all such moneys due under any Accounts Receivable of such Canadian Grantor that constitutes Collateral or with respect to any other Collateral of such Canadian Grantor whenever payable;
 
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(ii) in the case of any Copyright, Patent, Trade-mark or Industrial Design constituting Collateral of such Canadian Grantor, execute and deliver any and all agreements, instruments, documents and papers as the ABL Collateral Agent may reasonably request to such Canadian Grantor to evidence the ABL Collateral Agent’s and the Lenders’ security interest in such Copyright, Patent, Trade-mark or Industrial Design and the goodwill and intangibles of such Canadian Grantor relating thereto or represented thereby, and such Canadian Grantor hereby consents to the non-exclusive royalty free use by the Collateral Agent of any Copyright, Patent, Trade-mark or Industrial Design owned by such Canadian Grantor included in the Collateral for the purposes of disposing of any Collateral;
(iii) pay or discharge taxes and Liens, other than Liens permitted under this Agreement or the other Loan Documents, levied or placed on the Security Collateral of such Canadian Grantor, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof; and
(iv) ( A ) direct any party liable for any payment under any of the Security Collateral of such Canadian Grantor to make payment of any and all moneys due or to become due thereunder directly to the ABL Collateral Agent or as the ABL Collateral Agent shall direct; ( B ) ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Security Collateral of such Canadian Grantor; ( C ) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Security Collateral of such Canadian Grantor; ( D ) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Security Collateral of such Canadian Grantor or any portion thereof and to enforce any other right in respect of any Security Collateral of such Canadian Grantor; ( E ) defend any suit, action or proceeding brought against such Canadian Grantor with respect to any Security Collateral of such Canadian Grantor; ( F ) settle, compromise or adjust any such suit, action or proceeding described in clause (E)  above and, in connection therewith, to give such discharges or releases as the ABL Collateral Agent may deem appropriate; ( G ) subject to any existing reserved rights or licenses, assign any Copyright, Patent, Trade-mark or Industrial Design constituting Security Collateral of such Canadian Grantor (along with the goodwill of the business to which any such Copyright, Patent, Trade-mark or Industrial Design pertains), for such term or terms, on such conditions, and in such manner, as the ABL Collateral Agent shall in its sole discretion determine; and ( H ) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Security Collateral of such Canadian Grantor as fully and completely as though the ABL Collateral Agent were the absolute owner thereof for all purposes, and do, at the ABL Collateral Agent’s option and such Canadian Grantor’s expense, at any time, or from time to time, all acts and things which the ABL Collateral Agent deems necessary to protect, preserve or realize upon the Security Collateral of such Canadian Grantor and the ABL Collateral Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Canadian Grantor might do.
 
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(b) The reasonable expenses of the ABL Collateral Agent incurred in connection with actions undertaken as provided in this subsection 7.1 , together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due ABR Loans that are Canadian Facility Revolving Credit Loans under the ABL Credit Agreement, from the date of payment by the ABL Collateral Agent to the date reimbursed by the relevant Canadian Granting Party, shall be payable by such Canadian Granting Party to the ABL Collateral Agent on demand.
(c) Each Canadian Granting Party hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable as to the relevant Canadian Granting Party until the earliest to occur of ( i ) the first date on which all the Canadian Facility Revolving Credit Loans and all other Borrower Obligations then due and owing, are paid in full in cash, no Canadian Facility Letters of Credit remain outstanding (except for Canadian Facility Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender), ( ii ) as to any Canadian Granting Party, a sale or other disposition of all of the Capital Stock of such Canadian Granting Party (other than to a Borrower or a Canadian Guarantor), or any other transaction or occurrence as a result of which such Canadian Granting Party ceases to be a Restricted Subsidiary of the Parent Borrower, in each case, that is permitted under the Credit Agreement and ( iii ) as to any Canadian Granting Party, such Canadian Granting Party becoming an Excluded Subsidiary.
7.2 Duty of ABL Collateral Agent . The ABL Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Security Collateral in its possession shall be to deal with it in the same manner as the ABL Collateral Agent deals with similar property for its own account. None of the ABL Collateral Agent or any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Security Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Security Collateral upon the request of any Canadian Granting Party or any other Person or, except as otherwise provided herein, to take any other action whatsoever with regard to the Security Collateral or any part thereof. The powers conferred on the ABL Collateral Agent and the other Secured Parties hereunder are solely to protect the ABL Collateral Agent’s and the other Secured Parties’ interests in the Security Collateral and shall not impose any duty upon the ABL Collateral Agent or any other Secured Party to exercise any such powers. The ABL Collateral Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and to the maximum extent permitted by applicable law, neither they nor any of their officers, directors, employees or agents shall be responsible to any Canadian Granting Party for any act or failure to act hereunder, except as otherwise provided herein or for their own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
7.3 Financing Statements . Pursuant to any applicable law, each Canadian Granting Party authorizes the ABL Collateral Agent to file or record financing statements, financing change statements and other filing or recording documents or instruments with respect to such Canadian Grantor’s Security Collateral without the signature of such Canadian Granting Party in such form and in such filing offices as the ABL Collateral Agent reasonably determines appropriate to perfect the security interests of the ABL Collateral Agent under this Agreement. Each Canadian Granting Party authorizes the ABL Collateral Agent to use any collateral description reasonably determined by the ABL Collateral Agent, including, without limitation, the collateral description “all personal property now existing or hereafter
 
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acquired” or “all assets no existing or hereafter acquired” or words of similar meaning in any such financing statements or financing charge statements. The ABL Collateral Agent agrees to use its commercially reasonable efforts to notify the relevant Canadian Granting Party of any financing statement or financing change statement filed by it, provided that any failure to give such notice shall not affect the validity or effectiveness of any such filing.
7.4 Authority of ABL Collateral Agent . Each Canadian Granting Party acknowledges that the rights and responsibilities of the ABL Collateral Agent under this Agreement with respect to any action taken by the ABL Collateral Agent or the exercise or non-exercise by the ABL Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement or any amendment, supplement or other modification of this Agreement shall, as between the ABL Collateral Agent and the Secured Parties, be governed by the ABL Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the ABL Collateral Agent and the Canadian Granting Parties, the ABL Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Canadian Granting Party shall be under any obligation, or entitlement, to make any inquiry respecting such authority.
7.5 Right of Inspection . Upon reasonable written advance notice to any Canadian Grantor and as often as may reasonably be desired, or at any time and from time to time after the occurrence and during the continuation of an Event of Default, the ABL Collateral Agent shall have reasonable access during normal business hours to all the books, correspondence and records of such Canadian Grantor, and the ABL Collateral Agent and its representatives may examine the same, and to the extent reasonable take extracts therefrom and make photocopies thereof, and such Canadian Grantor agrees to render to the ABL Collateral Agent at such Canadian Grantor’s reasonable cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. The ABL Collateral Agent and its representatives shall also have the right, upon reasonable advance written notice to such Canadian Grantor subject to any lease restrictions, to enter during normal business hours into and upon any premises owned, leased or operated by such Canadian Grantor where any of such Canadian Grantor’s Inventory or Equipment is located for the purpose of inspecting the same, observing its use or otherwise protecting its interests therein to the extent not inconsistent with the provisions of the ABL Credit Agreement and the other Loan Documents (and subject to each applicable Intercreditor Agreement).
SECTION 8 NON-LENDER SECURED PARTIES
8.1 Rights to Collateral .
(a) The Non-Lender Secured Parties shall not have any right whatsoever to do any of the following: ( i ) exercise any rights or remedies with respect to the Collateral (such term, as used in this Section 8 , having the meaning assigned to it in the ABL Credit Agreement), or to direct the ABL Collateral Agent to do the same, including, without limitation, the right to ( A ) enforce any Liens or sell or otherwise foreclose on any portion of the Collateral, ( B ) request any action, institute any proceedings, exercise any voting rights, give any instructions, make any election, notify account debtors or make collections with respect to all or any portion of the Collateral or ( C ) release any Canadian Granting Party under this Agreement or release any Collateral from the Liens of any Security Document or consent to or otherwise approve any such release; ( ii ) demand, accept or obtain any Lien on any Collateral (except for Liens arising under, and subject to the terms of, this Agreement); ( iii ) vote in any Bankruptcy Case or similar proceeding in respect of the Canadian Borrower or any of its Subsidiaries (any such proceeding, for purposes of this clause (a) , a “ Bankruptcy ”) with respect to, or take any other actions concerning the Collateral; ( iv ) receive any proceeds from any sale, transfer or other disposition of any of the Collateral
 
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(except in accordance with this Agreement); ( v ) oppose any sale, transfer or other disposition of the Collateral; ( vi ) object to any debtor-in-possession financing in any Bankruptcy which is provided by one or more Lenders among others (including on a priming basis under the Companies’ Creditors Arrangement Act , the Bankruptcy and Insolvency Act (Canada), or any other applicable law); ( vii ) object to the use of cash collateral in respect of the Collateral in any Bankruptcy; or ( viii ) seek, or object to the Lenders or Agents seeking on an equal and ratable basis, any adequate protection or relief from the automatic stay with respect to the Collateral in any Bankruptcy.
(b) Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, agrees that in exercising rights and remedies with respect to the Collateral, the ABL Collateral Agent and the Canadian Facility Lenders, with the consent of the ABL Collateral Agent, may enforce the provisions of the Security Documents and exercise remedies thereunder and under any other Loan Documents (or refrain from enforcing rights and exercising remedies), all in such order and in such manner as they may determine in the exercise of their sole business judgment. Such exercise and enforcement shall include, without limitation, the rights to collect, sell, dispose of or otherwise realize upon all or any part of the Collateral, to incur expenses in connection with such collection, sale, disposition or other realization and to exercise all the rights and remedies of a secured lender under the PPSA as in effect from time to time in any applicable jurisdiction. The Non-Lender Secured Parties by their acceptance of the benefits of this Agreement and the other Security Documents hereby agree not to contest or otherwise challenge any such collection, sale, disposition or other realization of or upon all or any of the Collateral. Whether or not a Bankruptcy Case has been commenced, the Non-Lender Secured Parties shall be deemed to have consented to any sale or other disposition of any property, business or assets of Holding or any of its Subsidiaries and the release of any or all of the Collateral from the Liens of any Security Document in connection therewith.
(c) Notwithstanding any provision of this subsection 8.1 , the Non-Lender Secured Parties shall be entitled, subject to each applicable Intercreditor Agreement, to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleadings ( A ) in order to prevent any Person from seeking to foreclose on the Collateral or supersede the Non-Lender Secured Parties’ claim thereto or ( B ) in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Non-Lender Secured Parties. Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement, agrees to be bound by and to comply with each applicable Intercreditor Agreement and authorize the ABL Collateral Agent to enter into each Intercreditor Agreement on its own behalf.
(d) Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement, agrees that the ABL Collateral Agent and the Canadian Facility Lenders may deal with the Collateral, including any exchange, taking or release of Collateral, may change or increase the amount of the Borrower Obligations and/or the Guarantor Obligations, and may release any Canadian Granting Party from its Obligations hereunder, all without any liability or obligation (except as may be otherwise expressly provided herein) to the Non-Lender Secured Parties.
8.2 Appointment of Agent . Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, shall be deemed irrevocably to make, constitute and appoint the ABL Collateral Agent, as agent under the ABL Credit Agreement (and all officers, employees or agents designated by the ABL Collateral Agent) as such Person’s true and lawful agent and attorney-in-fact, and in such capacity, the ABL Collateral Agent shall have the right, with power of substitution for the Non-Lender Secured Parties and in each such Person’s name or otherwise, to effectuate any sale, transfer or other disposition of the Collateral. It is understood and agreed that the appointment of the ABL Collateral Agent as the agent and attorney-in-fact of the Non-Lender Secured
 
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Parties for the purposes set forth herein is coupled with an interest and is irrevocable. It is understood and agreed that the ABL Collateral Agent has appointed the Administrative Agent as its agent for purposes of perfecting certain of the security interests created hereunder and for otherwise carrying out certain of its obligations hereunder.
8.3 Waiver of Claims . To the maximum extent permitted by law, each Non-Lender Secured Party waives any claim it might have against the ABL Collateral Agent or the Lenders with respect to, or arising out of, any action or failure to act or any error of judgment, negligence, or mistake or oversight whatsoever on the part of the ABL Collateral Agent or the Lenders or their respective directors, officers, employees or agents with respect to any exercise of rights or remedies under the Loan Documents or any transaction relating to the Collateral (including, without limitation, any such exercise described in subsection 8.1(b) ), except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person. To the maximum extent permitted by applicable law, none of the ABL Collateral Agent or any Lender or any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Holding, any Subsidiary of Holding, any Non-Lender Secured Party or any other Person or to take any other action or forbear from doing so whatsoever with regard to the Collateral or any part thereof, except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person.
8.4 Designation of Non-Lender Secured Parties . The Parent Borrower on behalf of the Canadian Borrower may from time to time designate a Person as a “Bank Products Affiliate,” or a “Hedging Affiliate” hereunder by written notice to the ABL Collateral Agent in accordance with the terms of the ABL Credit Agreement. Upon being so designated by the Parent Borrower, such Bank Products Affiliate or Hedging Affiliate (as the case may be) shall be a Non-Lender Secured Party for the purposes of this Agreement for as long as so designated by the Parent Borrower provided that, at the time of the Parent Borrower’s designation of such Non-Lender Secured Party, the obligations of the relevant Canadian Granting Party under the applicable Hedging Agreement or Bank Products Agreement (as the case may be) have not been designated as Additional Obligations.
SECTION 9 MISCELLANEOUS
9.1 Amendments in Writing . None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by each affected Canadian Granting Party and the ABL Collateral Agent, provided that ( a ) any provision of this Agreement imposing obligations on any Canadian Granting Party may be waived by the ABL Collateral Agent in a written instrument executed by the ABL Collateral Agent and ( b ) if separately agreed in writing between the Canadian Borrower and any Non-Lender Secured Party (and such Non-Lender Secured Party has been designated in writing by the Canadian Borrower to the ABL Collateral Agent for purposes of this sentence, for so long as so designated), no such waiver and no such amendment or modification shall amend, modify or waive subsection 6.5 (or the definition of “Non-Lender Secured Party” or “Secured Party” to the extent relating thereto) if such waiver, amendment, supplement or modification would directly and adversely affect a Non-Lender Secured Party without the written consent of such affected Non-Lender Secured Party. For the avoidance of doubt, it is understood and agreed that any amendment, amendment and restatement, waiver, supplement or other modification of or to any Intercreditor Agreement that would have the effect, directly or indirectly, through any reference herein to any Intercreditor Agreement or otherwise, of waiving, amending, supplementing or otherwise modifying this Agreement, or any term or provision hereof, or any right or obligation of any Canadian Granting Party hereunder or in respect hereof, shall not be given such effect except pursuant to a written instrument executed by each affected Canadian Granting Party and the ABL Collateral Agent in accordance with this subsection 9.1 .
 
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9.2 Notices . All notices, requests and demands to or upon the ABL Collateral Agent or any Canadian Granting Party hereunder shall be effected in the manner provided for in subsection 11.2 of the ABL Credit Agreement; provided that any such notice, request or demand to or upon any Canadian Guarantor shall be addressed to such Canadian Guarantor at its notice address set forth on Schedule 1 , unless and until such Canadian Guarantor shall change such address by notice to the ABL Collateral Agent and the Administrative Agent given in accordance with subsection 11.2 of the ABL Credit Agreement.
9.3 No Waiver by Course of Conduct; Cumulative Remedies . None of the ABL Collateral Agent or any other Secured Party shall by any act (except by a written instrument pursuant to subsection 9.1 ), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the ABL Collateral Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the ABL Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the ABL Collateral Agent or such other Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
9.4 Enforcement Expenses; Indemnification .
(a) Each Canadian Guarantor jointly and severally agrees to pay or reimburse each Secured Party and the ABL Collateral Agent for all their respective reasonable costs and expenses incurred in collecting against such Canadian Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement against such Canadian Guarantor and the other Loan Documents to which such Canadian Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Secured Parties, the ABL Collateral Agent and the Administrative Agent.
(b) Each Canadian Grantor jointly and severally agrees to pay, and to save the ABL Collateral Agent, the Administrative Agent and the other Secured Parties harmless from, ( x ) any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other similar taxes which may be payable or determined to be payable with respect to any of the Security Collateral or in connection with any of the transactions contemplated by this Agreement and ( y ) any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement (collectively, the “ indemnified liabilities ”), in each case to the extent the Canadian Borrower would be required to do so pursuant to subsection 11.5 of the ABL Credit Agreement, and in any event excluding any taxes or other indemnified liabilities arising from gross negligence, bad faith or willful misconduct of the ABL Collateral Agent, the Administrative Agent or any other Secured Party as determined by a court of competent jurisdiction in a final and nonappealable decision.
(c) The agreements in this subsection 9.4 shall survive repayment of the Obligations and all other amounts payable under the ABL Credit Agreement and the other Loan Documents.
 
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9.5 Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the Canadian Granting Parties, the ABL Collateral Agent and the Secured Parties and their respective successors and assigns; provided that no Granting Party may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the ABL Collateral Agent, except as permitted hereby or by the ABL Credit Agreement.
9.6 Set-Off . Each Canadian Guarantor hereby irrevocably authorizes each of the Administrative Agent and the ABL Collateral Agent and each other Secured Party at any time and from time to time without notice to such Canadian Guarantor or any other Canadian Granting Party, any such notice being expressly waived by each Canadian Granting Party, to the extent permitted by applicable law, upon the occurrence and during the continuance of an Event of Default under subsection 9(a) of the ABL Credit Agreement so long as any amount remains unpaid after it becomes due and payable by such Canadian Guarantor hereunder, to set-off and appropriate and apply against any such amount any and all deposits (general or special, time or demand, provisional or final) (other than the Collateral Proceeds Account), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the ABL Collateral Agent, the Administrative Agent or such other Secured Party to or for the credit or the account of such Canadian Guarantor, or any part thereof in such amounts as the ABL Collateral Agent, the Administrative Agent or such other Secured Party may elect. The ABL Collateral Agent, the Administrative Agent and each other Secured Party shall notify such Canadian Guarantor promptly of any such set-off and the application made by the ABL Collateral Agent, the Administrative Agent or such other Secured Party of the proceeds thereof; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the ABL Collateral Agent, the Administrative Agent and each other Secured Party under this subsection 9.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the ABL Collateral Agent, the Administrative Agent or such other Secured Party may have.
9.7 Counterparts . This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
9.8 Severability . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction; provided that, with respect to any Pledged Stock issued by a Foreign Subsidiary, all rights, powers and remedies provided in this Agreement may be exercised only to the extent that they do not violate any provision of any law, rule or regulation of any Governmental Authority applicable to any such Pledged Stock or affecting the legality, validity or enforceability of any of the provisions of this Agreement against the Canadian Pledgor (such laws, rules or regulations, “ Applicable Law ”) and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any Applicable Law.
9.9 Section Headings . The section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
 
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9.10 Integration . This Agreement and the other Loan Documents represent the entire agreement of the Canadian Granting Parties, the ABL Collateral Agent and the other Secured Parties with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Canadian Granting Parties, the ABL Collateral Agent or any other Secured Party relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW . THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
9.12 Submission to Jurisdiction; Waivers . Each party hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party to the exclusive general jurisdiction of the courts of the Province of Ontario sitting in the City of Toronto;
(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to any party at its address referred to in subsection 9.2 or at such other address of which the ABL Collateral Agent and the Administrative Agent (in the case of any other party hereto) and the Parent Borrower (in the case of the ABL Collateral Agent and the Administrative Agent) shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or (subject to clause (a)  above) shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection 9.12 any consequential or punitive damages.
Each Canadian Granting Party hereby agrees that The Limitation of Civil Rights Act (Saskatchewan), The Land Contracts (Actions) Act (Saskatchewan) and Part IV (excepting only section 46) of The Saskatchewan Farm Security Act do not apply insofar as they relate to actions as defined in those Acts, or insofar as they relate to or affect this Agreement, the rights of the ABL Collateral Agent and the Secured Parties under this Agreement or any instrument, charge, security agreement or other document of any nature that renews, extends or is collateral to this Agreement and such Canadian Granting Party hereby irrevocably and unconditionally waives any and all benefits and remedies provided thereunder.
 
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9.13 Acknowledgments . Each Canadian Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;
(b) none of the ABL Collateral Agent, the Administrative Agent or any other Secured Party has any fiduciary relationship with or duty to any Canadian Guarantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Canadian Guarantors, on the one hand, and the ABL Collateral Agent, the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the Canadian Guarantors and the Secured Parties.
9.14 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN TO THE EXTENT PERMISSIBLE BY APPLICABLE LAW.
9.15 Additional Canadian Granting Parties . Each new Subsidiary of the Parent Borrower that is required to become a party to this Agreement pursuant to subsection 7.9(b) or 7.9(c) of the ABL Credit Agreement shall become a Canadian Granting Party for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement substantially in the form of Annex 2 hereto. Each existing Canadian Granting Party that is required to become a Canadian Pledgor with respect to Capital Stock of any new Subsidiary of the Parent Borrower pursuant to subsection 7.9(c) of the ABL Credit Agreement shall become a Canadian Pledgor with respect thereto upon execution and delivery by such Canadian Granting Party of a Supplemental Agreement substantially in the form of Annex 3 hereto.
9.16 Releases .
(a) At such time as the Canadian Facility Revolving Credit Loans and the other Obligations (other than any Obligations owing to a Non-Lender Secured Party) then due and owing shall have been paid in full, the Commitments have been terminated and no Canadian Facility Letter of Credit shall be outstanding (except for Canadian Facility Letters of Credit that have been cash collateralized, backstopped or otherwise provided for pursuant to arrangements reasonably acceptable to the relevant Issuing Lender), all Security Collateral shall be automatically released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the ABL Collateral Agent and each Canadian Granting Party hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Security Collateral shall revert to the Canadian Granting Parties. At the request and sole expense of any Canadian Granting Party following any such termination, the ABL Collateral Agent shall deliver to such Canadian Granting Party (subject to subsection 7.2 , without recourse and without representation or warranty) any Security Collateral held by the ABL Collateral Agent hereunder, and execute, acknowledge and deliver to such Canadian Granting Party such releases, instruments or other documents (including, without limitation, PPSA financing change statements and discharges), and do or cause to be done all other acts, as any Canadian Granting Party shall reasonably request to evidence such termination.
 
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(b) Upon any sale or other disposition of Security Collateral permitted by the ABL Credit Agreement (other than any sale or disposition to another Canadian Grantor), the Lien pursuant to this Agreement on such sold or disposed of Security Collateral shall be automatically released. In connection with a sale or other disposition of all of the Capital Stock of any Canadian Granting Party (other than to any Canadian Granting Party or any other transaction or occurrence as a result of which such Canadian Granting Party ceases to be a Restricted Subsidiary of the Parent Borrower), or the sale or other disposition of Security Collateral (other than a sale or disposition to another Canadian Grantor) permitted under the ABL Credit Agreement, the ABL Collateral Agent shall, upon receipt from the Parent Borrower of a written request for the release of such Canadian Granting Party from its Guarantee or the release of the Security Collateral subject to such sale, disposition or other transaction, identifying such Canadian Granting Party or the relevant Security Collateral and the terms of the sale, disposition or other transaction in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by the Parent Borrower stating that such transaction is in compliance with the ABL Credit Agreement and the other Loan Documents, execute and deliver to the Parent Borrower or the relevant Canadian Granting Party (subject to subsection 7.2 , without recourse and without representation or warranty), at the sole cost and expense of such Canadian Grantor, any Security Collateral of such relevant Canadian Granting Party held by the ABL Collateral Agent, or the Security Collateral subject to such sale or disposition (as applicable), and, at the sole cost and expense of such Canadian Granting Party, execute, acknowledge and deliver to such Canadian Granting Party such releases, instruments or other documents (including, without limitation, PPSA financing change statements and discharges), and do or cause to be done all other acts, as the Parent Borrower or such Canadian Granting Party shall reasonably request ( x ) to evidence or effect the release of such Canadian Granting Party from its Guarantee (if any) and of the Liens created hereby (if any) on such Canadian Granting Party’s Collateral or ( y ) to evidence the release of the Security Collateral subject to such sale or disposition.
(c) Upon any Canadian Granting Party becoming an Excluded Subsidiary in accordance with the provisions of the ABL Credit Agreement, the Lien pursuant to this Agreement on all Security Collateral of such Canadian Granting Party (if any) shall be automatically released, and the Guarantee (if any) of such Canadian Granting Party, and all obligations of such Canadian Granting Party hereunder, shall terminate, all without delivery of any instrument or performance of any act by any party, and the ABL Collateral Agent shall, upon the request of the Parent Borrower or such Canadian Granting Party, deliver to the Parent Borrower or such Canadian Granting Party (subject to subsection 7.2 , without recourse and without representation or warranty) any Security Collateral of such Canadian Granting Party held by the ABL Collateral Agent hereunder and the ABL Collateral Agent and the Administrative Agent shall execute, acknowledge and deliver to the Parent Borrower or such Canadian Granting Party (at the sole cost and expense of the Parent Borrower or such Canadian Granting Party) all releases, instruments or other documents (including, without limitation, PPSA financing change statements and discharges), and do or cause to be done all other acts, necessary or reasonably desirable for the release of such Canadian Granting Party from its Guarantee (if any) or the Liens created hereby (if any) on such Canadian Granting Party’s Security Collateral, as applicable, as the Borrower or such Canadian Granting Party may reasonably request.
(d) Upon any Security Collateral being or becoming an Excluded Asset, the Lien pursuant to this Agreement on such Security Collateral shall be automatically released on Collateral. At the request and sole expense of any Canadian Granting Party, the ABL Collateral Agent shall deliver such Security Collateral (if held by the ABL Collateral Agent) to such Canadian Granting Party and execute, acknowledge and deliver to such Canadian Granting Party such releases, instruments or other documents (including, without limitation, PPSA financing change statements and discharges and do or cause to be done all other acts, as such Canadian Granting Party shall reasonably request to evidence such release.
 
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(e) [ Reserved] .
(f) The ABL Collateral Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Security Collateral by it in accordance with (or which the ABL Collateral Agent in good faith believes to be in accordance with) this subsection 9.16 .
9.17 Judgment .
(a) If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in one currency into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the ABL Collateral Agent could purchase the first currency with such other currency on the Business Day preceding the day on which final judgment is given.
(b) The obligations of any Canadian Guarantor in respect of this Agreement to the ABL Collateral Agent, for the benefit of each holder of Secured Obligations, shall, notwithstanding any judgment in a currency (the “ judgment currency ”) other than the currency in which the sum originally due to such holder is denominated (the “ original currency ”), be discharged only to the extent that on the Business Day following receipt by the ABL Collateral Agent of any sum adjudged to be so due in the judgment currency, the ABL Collateral Agent may in accordance with normal banking procedures purchase the original currency with the judgment currency; if the amount of the original currency so purchased is less than the sum originally due to such holder in the original currency, such Canadian Guarantor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the ABL Collateral Agent, for the benefit of such holder, against such loss, and if the amount of the original currency so purchased exceeds the sum originally due to the ABL Collateral Agent, the ABL Collateral Agent agrees to remit to the Parent Borrower, such excess. This covenant shall survive the termination of this Agreement and payment of the Obligations and all other amounts payable hereunder.
9.18 Canadian Amalgamation . Each Canadian Granting Party acknowledges and agrees that, in the event it amalgamates with any other company or companies, it is the intention of the parties hereto that the term “Canadian Grantor” or “Canadian Pledgor,” as the case may be, when used herein, shall apply to each of the amalgamating corporations and to the amalgamated corporation, such that the lien granted hereby:
(a) shall extend to Collateral (or in the case of a Canadian Pledgor, Pledged Collateral) owned by each of the amalgamating corporations and the amalgamated corporations at the time of amalgamation and to any Collateral (or in the case of a Canadian Pledgor, Pledged Collateral) thereafter owned or acquired by the amalgamated corporation, and
(b) shall secure all Obligations of each of the amalgamating corporations and the amalgamated corporations to the ABL Collateral Agent and the Secured Parties at the time of amalgamation and all Obligations of the amalgamated corporation to the ABL Collateral Agent and the Secured Parties thereafter arising. The Lien shall attach to all Collateral (or in the case of a Canadian Pledgor, Pledged Collateral) owned by each corporation amalgamating with a Canadian Grantor, and by the amalgamated corporation, at the time of the amalgamation, and shall attach to all Collateral (or in the case of a Canadian Pledgor, Pledged Collateral) thereafter owned or acquired by the amalgamated corporation when such becomes owned or is acquired.
9.19 Language . The parties hereto confirm that it is their wish that this Agreement, as well as any other documents relating to this Agreement, including notices, schedules and authorizations, have
 
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been and shall be drawn up in the English language only. Les signataires confirment leur volonté que la présente convention, de même que tous les documents s’y rattachant, y compris tout avis, annexe et autorisation, soient rédigés en anglais seulement .
9.20 No Implicit Subordination . The inclusion of reference to Permitted Liens in this Agreement or any other Loan Document is not intended to subordinate and shall not subordinate, and shall not be interpreted as subordinating, any Lien created by this Agreement or any of the other Loan Documents to any Permitted Lien.
9.21 Paramountcy . In the event of any conflict between the provisions of this Agreement and the provisions of the ABL Credit Agreement, the provisions of the ABL Credit Agreement shall govern.
[Remainder of page left blank intentionally; signature pages follow.]
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the date first written above.

UNISOURCE CANADA, INC., as Canadian Borrower, Canadian Grantor and Canadian Pledgor	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
[Canadian Guarantors], as Canadian Grantor, Canadian Pledgor and Canadian Guarantor	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
[Signature Pages to Canadian Guarantee and Collateral Agreement]

			
Acknowledged and Agreed to as of the date hereof by:	
		
	 	BANK OF AMERICA, N.A. ,
as Administrative Agent and ABL Collateral Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
[Signature Pages to Canadian Guarantee and Collateral Agreement]

Schedule 1
Notice Addresses of Canadian Granting Parties
Unisource Canada, Inc.
6185 McLaughlin Road
Mississauga, ON
L5R 3W7
Attn: Law Department
 
1

Schedule 2
Pledged Securities
1. Pledged Stock
None.
 
2

Schedule 3
Perfection Matters
1. Existing Security Interests
British Columbia

BASE
REGISTRATION #	  	SECURED PARTY(IES)	  	DEBTOR(S)	  	DATE OF
REGISTRATION/EXPIRY	
012178E	  	RYDER TRUCK RENTAL CANADA LTD.	  	UNISOURCE CANADA INC. (DELTA, BC)	  	REG: OCT 31, 2007
EXPIRY: OCT 31, 2017	
012180E	  	RYDER TRUCK RENTAL CANADA LTD.	  	UNISOURCE CANADA INC. (DELTA, BC)	  	REG: OCT 31, 2007
EXPIRY: OCT 31, 2017	
012182E	  	RYDER TRUCK RENTAL CANADA LTD.	  	UNISOURCE CANADA INC. (DELTA, BC)	  	REG: OCT 31, 2007
EXPIRY: OCT 31, 2017	
012184E	  	RYDER TRUCK RENTAL CANADA LTD.	  	UNISOURCE CANADA INC. (DELTA, BC)	  	REG: OCT 31, 2007
EXPIRY: OCT 31, 2014	
091943E	  	RYDER TRUCK RENTAL CANADA LTD	  	UNISOURCE CANADA INC. (DELTA, BC)	  	REG: DEC 17, 2007
EXPIRY: DEC 17, 2017	
091947E	  	RYDER TRUCK RENTAL CANADA LTD	  	UNISOURCE CANADA INC. (DELTA, BC)	  	REG: DEC 17, 2007
EXPIRY: DEC 17, 2017	
091949E	  	RYDER TRUCK RENTAL CANADA LTD	  	UNISOURCE CANADA INC. (DELTA, BC)	  	REG: DEC 17, 2007
EXPIRY: DEC 17, 2017	
091950E	  	RYDER TRUCK RENTAL CANADA LTD	  	UNISOURCE CANADA INC. (DELTA, BC)	  	REG: DEC 17, 2007
EXPIRY: DEC 17, 2017	
675761E	  	RYDER TRUCK RENTAL CANADA LTD	  	UNISOURCE CANADA INC. (WINNIPEG, BC)	  	REG: NOV 03, 2008
EXPIRY: NOV 03, 2015	
				
837981E	  	RYDER TRUCK RENTAL CANADA LTD	  	UNISOURCE CANADA INC. (NEW WESTMINSTER, BC)	  	REG: FEB 20, 2009
EXPIRY: FEB 20, 2016	
857837E	  	PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	UNISOURCE CANADA INC. (RICHMOND HILL, ON)
UNISOURCE CANADA INC (MISSISAUGA, ON)	  	REG: MAR 05, 2009
EXPIRY: MAR 05, 2017	
987610E	  	PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	UNISOURCE CANADA INC. (RICHMOND HILL, ON)
UNISOURCE CANADA INC (MISSISAUGA, ON)	  	REG: MAY 27, 2009
EXPIRY: MAY 27, 2017	
539689F	  	G.N. JOHNSTON EQUIPMENT CO. LTD.	  	UNISOURCE CANADA INC. (NEW WESTMINSTER, BC)	  	REG: MAY 04, 2010
EXPIRY: MAY 04, 2015	
743025F	  	PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	UNISOURCE CANADA INC (MISSISAUGA, ON)	  	REG: SEP 01, 2010
EXPIRY: SEP 01, 2017	
830707F	  	PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	UNISOURCE CANADA INC (MISSISAUGA, ON)	  	REG: OCT 26, 2010
EXPIRY: OCT 26, 2014	
888168F	  	PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	UNISOURCE CANADA INC (MISSISAUGA, ON)	  	REG: NOV 30, 2010
EXPIRY: NOV 30, 2016	
029832G	  	BANK OF AMERICA	  	UNISOURCE CANADA INC (RICHMOND HILL, ON)	  	REG: MAR 04, 2011
EXPIRY: MAR 04, 2018	
260410G	  	XEROX CANADA LTD	  	UNISOURCE CANADA INC. (DELTA, BC)
UNISOURCE CANADA INC. (RICHMOND HILL, ON)
UNISOURCE CANADA INC. (DARTMOUTH, NS)
UNISOURCE CANADA INC. (WINNIPEG, MB)	  	REG: JUL 21, 2011
EXPIRY: JUL 21, 2015	
628797G	  	PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	UNISOURCE CANADA INC (MISSISAUGA, ON)	  	REG: MAR 12, 2012
EXPIRY: MAR 12, 2021	
 
3

							
BASE
REGISTRATION #	  	SECURED PARTY(IES)	  	DEBTOR(S)	  	DATE OF
REGISTRATION/EXPIRY	
938054G	  	XEROX CANADA LTD	  	UNISOURCE CANADA INC. (DELTA, BC)
UNISOURCE CANADA INC. (OTTAWA, ON)
UNISOURCE CANADA INC. (CALGARY, AB)
UNISOURCE CANADA INC. (SAINT-LAURENT, QC)	  	REG: SEP 06, 2012
EXPIRY: SEP 06, 2016	
010206H	  	PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	UNISOURCE CANADA INC (MISSISAUGA, ON)	  	REG: OCT 19, 2012
EXPIRY: OCT 19, 2020	
714923H	  	XEROX CANADA LTD	  	UNISOURCE CANADA INC. (DELTA, BC)
UNISOURCE CANADA INC. (MISSISSAUGA, ON)
UNISOURCE CANADA INC. (DARTMOUTH, NS)	  	REG: DEC 17, 2013
EXPIRY: DEC 17, 2017	
717189H	  	DOCUMENT DIRECTION LIMITED PARTNERSHIP	  	UNISOURCE CANADA INC. (PRINCE GEORGE, BC)	  	REG: DEC 18, 2013
EXPIRY: DEC 18, 2017	
767110H	  	PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	UNISOURCE CANADA INC (MISSISAUGA, ON)	  	REG: JAN 23, 2014
EXPIRY: JAN 23, 2022	
Alberta

SECURED PARTY	  	REGISTRATION TYPE	  	REGISTRATION NO.	
MAXIUM FINANCIAL SERVICES INC.	  	SECURITY AGREEMENT	  	08080618182
(6 YEARS)
 
EXPIRY DATE:
2014-AUG-06	
	  		  	AMENDED BY:
10070810529	
	  		  	AMENDED BY:
10070832438	
	  		  	AMENDED BY:
10071209152	
PENSKE TRUCK LEASING CANADA INC
 
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	SECURITY AGREEMENT	  	09030527634
(8 YEARS)
 
EXPIRY DATE:
2017-MAR-05	
PENSKE TRUCK LEASING CANADA INC
 
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	SECURITY AGREEMENT	  	09052703857
(8 YEARS)
 
EXPIRY DATE:
2017-MAY-27	
XEROX CANADA LTD	  	SECURITY AGREEMENT	  	10072028138
(4 YEARS)
 
EXPIRY DATE:
2014-JUL-20	
XEROX CANADA LTD	  	SECURITY AGREEMENT	  	10072110732
(4 YEARS)
 
EXPIRY DATE:
2014-JUL-21	
G.N. JOHNSTON EQUIPMENT CO LTD.	  	SECURITY AGREEMENT	  	10112405957
(4 YEARS)
 
EXPIRY DATE:
2014-NOV-24	
 
4

					
SECURED PARTY	  	REGISTRATION TYPE	  	REGISTRATION NO.	
PENSKE TRUCK LEASING CANADA INC
 
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	SECURITY AGREEMENT	  	10113017880
(6 YEARS)
 
EXPIRY DATE:
2016-NOV-30	
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT	  	SECURITY AGREEMENT	  	11030423700
(7 YEARS)
 
EXPIRY DATE:
2018-MAR-04	
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT	  	LAND CHARGE	  	11030423784
(INFINITY)	
NATIONAL LEASING GROUP INC.	  	SECURITY AGREEMENT	  	11051124442
(6 YEARS)
 
EXPIRY DATE:
2017-MAY-11	
DE LAGE LANDEN FINANCIAL SERVICES CANADA INC.
 
SERVICES FINANCIERS DE LAGE LANDEN CANADA INC.	  	SECURITY AGREEMENT	  	11062412445
(6 YEARS)
 
EXPIRY DATE:
2017-JUN-24	
XEROX CANADA LTD	  	SECURITY AGREEMENT	  	11072221645
(4 YEARS)
 
EXPIRY DATE:
2015-JUL-22	
DE LAGE LANDEN FINANCIAL SERVICES CANADA INC.	  	SECURITY AGREEMENT	  	11122123336
(6 YEARS)
 
EXPIRY DATE:
2017-DEC-21	
G.N. JOHNSTON EQUIPMENT CO LTD.	  	SECURITY AGREEMENT	  	12020915445
(5 YEARS)
 
EXPIRY DATE:
2017-FEB-09	
PENSKE TRUCK LEASING CANADA INC
 
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	SECURITY AGREEMENT	  	12031209451
(9 YEARS)
 
EXPIRY DATE:
2021-MAR-12	
G.N. JOHNSTON EQUIPMENT CO LTD.	  	SECURITY AGREEMENT	  	12081412765
(6 YEARS)
 
EXPIRY DATE:
2018-AUG-14	
XEROX CANADA LTD	  	SECURITY AGREEMENT	  	12090630447
(4 YEARS)
 
EXPIRY DATE:
2016-SEP-06	
PENSKE TRUCK LEASING CANADA INC
 
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	SECURITY AGREEMENT	  	12101904752
(8 YEARS)
 
EXPIRY DATE:
2020-OCT-19	
G.N JOHNSTON EQUIPMENT CO LTD.	  	SECURITY AGREEMENT	  	13012823119
(6 YEARS)
 
EXPIRY DATE:
2019-JAN-28	
RYDER TRUCK RENTAL CANADA LTD	  	SECURITY AGREEMENT	  	13050609103
(7 YEARS)
 
EXPIRY DATE:
2020-MAY-06	
 
5

					
SECURED PARTY	  	REGISTRATION TYPE	  	REGISTRATION NO.	
RYDER TRUCK RENTAL CANADA LTD	  	SECURITY AGREEMENT	  	13050609181
(6 YEARS)
 
EXPIRY DATE:
2019-MAY-06	
G.N JOHNSTON EQUIPMENT CO LTD.	  	SECURITY AGREEMENT	  	13053044123
(6 YEARS)
 
EXPIRY DATE:
2019-MAY-30	
DOCUMENT DIRECTION LIMITED PARTNERSHIP	  	SECURITY AGREEMENT	  	13121841319
(4 YEARS)
 
EXPIRY DATE:
2017-DEC-18	
XEROX CANADA LTD	  	SECURITY AGREEMENT	  	14010620846
(4 YEARS)
 
EXPIRY DATE:
2018-JAN-06	
PENSKE TRUCK LEASING CANADA INC
 
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	SECURITY AGREEMENT	  	14012307272
(8 YEARS)
 
EXPIRY DATE:
2022-JAN-23	
Saskatchewan

SECURED PARTY	  	REGISTRATION NUMBER
AND DATE	  	COMMENTS/EXPIRY DATE	
MAXIUM FINANCIAL SERVICES INC.	  	300356043
AUGUST 6, 2008	  	EXPIRY: AUGUST 6, 2014
 
JULY 8, 2010: ADD DEBTOR PARTY
 
JULY 9, 2010: DELETE SECURED PARTY
ADD SECURED PARTY
 
JULY 12, 2010: DELETE DEBTOR PARTY	
G N JOHNSTON EQUIPMENT CO LTD	  	300679994
JANUARY 24, 2011	  	EXPIRY: JANUARY 24, 2016	
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT	  	300693305
MARCH 4, 2011	  	EXPIRY: MARCH 4, 2018	
1. PENSKE TRUCK LEASING CANADA INC
2. LOCATIONS DE CAMIONS PENSKE CANADA INC	  	300431651
MARCH 5, 2009	  	EXPIRY: MARCH 5, 2017	
1. PENSKE TRUCK LEASING CANADA INC
2. LOCATIONS DE CAMIONS PENSKE CANADA INC	  	300463029
MAY 27, 2009	  	EXPIRY: MAY 27, 2017	
1. PENSKE TRUCK LEASING CANADA INC
2. LOCATIONS DE CAMIONS PENSKE CANADA INC	  	300839545
MARCH 12, 2012	  	EXPIRY: MARCH 12, 2021	
1. PENSKE TRUCK LEASING CANADA INC
2. LOCATIONS DE CAMIONS PENSKE CANADA INC	  	300941003
OCTOBER 19, 2012	  	EXPIRY: OCTOBER 19, 2020	
1. PENSKE TRUCK LEASING CANADA INC
2. LOCATIONS DE CAMIONS PENSKE CANADA INC	  	301138957
JANUARY 23, 2014	  	EXPIRY: JANUARY 23, 2022	
XEROX CANADA LTD	  	300650454
OCTOBER 28, 2010	  	EXPIRY: OCTOBER 28, 2014	
XEROX CANADA LTD	  	300670253
DECEMBER 22, 2010	  	EXPIRY: DECEMBER 22, 2014	
XEROX CANADA LTD	  	300846242
MARCH 27, 2012	  	EXPIRY: MARCH 27, 2016	
G N JOHNSTON EQUIPMENT CO LTD	  	300982887
FEBRUARY 5, 2013	  	EXPIRY: FEBRUARY 5, 2018
DECEMBER 4, 2013: AMEND GENERAL PROPERTY DESCRIPTION	
DOCUMENT DIRECTION LIMITED PARTNERSHIP	  	301126023
DECEMBER 18, 2013	  	EXPIRY: DECEMBER 18, 2017	
 
6

Manitoba

1.	 	REGISTRATION NO. 201110832708 EVIDENCING A SECURITY INTEREST IN A CERTAIN MOTOR VEHICLE LISTED BY SERIAL NUMBER IN FAVOUR OF G.N. JOHNSTON EQUIPMENT CO. LTD.;	
		
2.	 	REGISTRATION NO. 201106954300 EVIDENCING A SECURITY INTEREST IN CERTAIN MOTOR VEHICLES LISTED BY SERIAL NUMBER IN FAVOUR OF G.N. JOHNSTON EQUIPMENT CO. LTD.;	
		
3.	 	REGISTRATION NO. 201105563308 EVIDENCING A SECURITY INTEREST IN A CERTAIN MOTOR VEHICLE LISTED BY SERIAL NUMBER IN FAVOUR OF G.N. JOHNSTON EQUIPMENT CO. LTD.;	
		
4.	 	REGISTRATION NO. 201103415301 EVIDENCING A SECURITY INTEREST IN ALL OF THE DEBTOR’S PRESENT AND AFTER-ACQUIRED PERSONAL PROPERTY IN FAVOUR OF BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT;	
		
5.	 	REGISTRATION NO. 201401307406 EVIDENCING A SECURITY INTEREST WITH PERFECTION IN ANOTHER JURISDICTION IN CERTAIN MOTOR VEHICLES LISTED BY SERIAL NUMBER IN FAVOUR OF PENSKE TRUCK LEASING CANADA INC. / LOCATIONS DE CAMIONS PENSKE CANADA INC.;	
		
6.	 	REGISTRATION NO. 201307658106 EVIDENCING A SECURITY INTEREST IN CERTAIN MOTOR VEHICLES LISTED BY SERIAL NUMBER IN FAVOUR OF RYDER TRUCK RENTAL CANADA LTD.;	
		
7.	 	REGISTRATION NO. 201307657606 EVIDENCING A SECURITY INTEREST IN CERTAIN MOTOR VEHICLES LISTED BY SERIAL NUMBER IN FAVOUR OF RYDER TRUCK RENTAL CANADA LTD.;	
		
8.	 	REGISTRATION NO. 201218557606 EVIDENCING A SECURITY INTEREST WITH PERFECTION IN ANOTHER JURISDICTION IN CERTAIN MOTOR VEHICLES LISTED BY SERIAL NUMBER IN FAVOUR OF PENSKE TRUCK LEASING CANADA INC. / LOCATIONS DE CAMIONS PENSKE CANADA INC.;	
		
9.	 	REGISTRATION NO. 201203931706 EVIDENCING A SECURITY INTEREST WITH PERFECTION IN ANOTHER JURISDICTION IN CERTAIN MOTOR VEHICLES LISTED BY SERIAL NUMBER IN FAVOUR OF PENSKE TRUCK LEASING CANADA INC. / LOCATIONS DE CAMIONS PENSKE CANADA INC.;	
		
10.	 	REGISTRATION NO. 201112176506 EVIDENCING A SECURITY INTEREST IN CERTAIN OFFICE EQUIPMENT AND SOFTWARE IN FAVOUR OF XEROX CANADA LTD.;	
		
11.	 	REGISTRATION NO. 200908651200 EVIDENCING A SECURITY INTEREST WITH PERFECTION IN ANOTHER JURISDICTION IN CERTAIN MOTOR VEHICLES LISTED BY SERIAL NUMBER IN FAVOUR OF PENSKE TRUCK LEASING CANADA INC. / LOCATIONS DE CAMIONS PENSKE CANADA INC.;	
		
12.	 	REGISTRATION NO. 200903433905 EVIDENCING A SECURITY INTEREST WITH PERFECTION IN ANOTHER JURISDICTION IN A CERTAIN MOTOR VEHICLE LISTED BY SERIAL NUMBER IN FAVOUR OF PENSKE TRUCK LEASING CANADA INC. / LOCATIONS DE CAMIONS PENSKE CANADA INC.;	
		
13.	 	REGISTRATION NO. 201322871800 EVIDENCING A SECURITY INTEREST IN CERTAIN OFFICE EQUIPMENT AND/OR INVENTORY IN FAVOUR OF DOCUMENT DIRECTION LIMITED PARTNERSHIP;	
		
14.	 	REGISTRATION NO. 201108460500 EVIDENCING A SECURITY INTEREST IN CERTAIN OFFICE EQUIPMENT AND SOFTWARE OM FAVOUR OF XEROX CANADA LTD.	
Ontario

SECURED PARTY	  	COLLATERAL CLASSIFICATION	  	REFERENCE FILE NO. & REGISTRATION
NO.	
G.N. JOHNSTON EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
MOTOR VEHICLE SCHEDULE ATTACHED
6 SPECIFIC MOTOR VEHICLES REFERENCED	  	695875338 -
20140506 1116 1097 5210 (5 YEARS)	
TRAILER WIZARDS LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	694382832 -
20140313 1111 1590 8455 (3 YEARS)	
TRAILER WIZARDS LTD	  	EQUIPMENT, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	693502821 -
20140131 1051 1590 6061 (3 YEARS)	
PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	EQUIPMENT, OTHER, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	693341505 -
20140123 1427 1462 1779 (8 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	692670258 -
20131218 1007 1462 4150 (4 YEARS)	
 
7

					
SECURED PARTY	  	COLLATERAL CLASSIFICATION	  	REFERENCE FILE NO. & REGISTRATION
NO.	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	692670267 -
20131218 1007 1462 4151 (4 YEARS)	
DOCUMENT DIRECTION LIMITED PARTNERSHIP	  	EQUIPMENT, ACCOUNTS, OTHER	  	692697663 -
20131218 1942 1531 2882 (4 YEARS)	
RICOH CANADA INC.	  	EQUIPMENT	  	692288748 -
20131202 1526 5064 3730 (5 YEARS)	
G.N. JOHNSTON EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
MOTOR VEHICLE SCHEDULE ATTACHED
4 SPECIFIC MOTOR VEHICLES REFERENCED	  	689852925 -
20130829 0929 1097 4966 (1 YEAR)	
G.N. JOHNSTON EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
MOTOR VEHICLE SCHEDULE ATTACHED
10 SPECIFIC MOTOR VEHICLES REFERENCED	  	688069512 -
20130625 1601 1097 4903 (6 YEARS)	
TRAILER WIZARDS LIMITED	  	EQUIPMENT, OTHER, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	686147382 -
20130417 1407 1462 3250 (3 YEARS)	
TRAILCON LEASING INC.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	684141525 -
20130116 1702 1462 8335 (8 YEARS)	
TRAILCON LEASING INC.	  	EQUIPMENT, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	684141534 -
20130116 1702 1462 8336 (8 YEARS)	
TRAILCON LEASING INC.	  	EQUIPMENT, MOTOR VEHICLES
7 SPECIFIC MOTOR VEHICLES REFERENCED	  	684141543 -
20130116 1702 1462 8337 (8 YEARS)	
TRAILCON LEASING INC.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	684141552 -
20130116 1702 1462 8338 (8 YEARS)	
TRAILCON LEASING INC.	  	EQUIPMENT, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	684141561 -
20130116 1702 1462 8339 (8 YEARS)	
TRAILCON LEASING INC.	  	EQUIPMENT, MOTOR VEHICLES
4 SPECIFIC MOTOR VEHICLES REFERENCED	  	684141579 -
20130116 1702 1462 8340 (8 YEARS)	
TRAILCON LEASING INC.	  	EQUIPMENT, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	684141588 -
20130116 1702 1462 8341 (8 YEARS)	
TRAILCON LEASING INC.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	684141597 -
20130116 1702 1462 8342 (8 YEARS)	
G.N. JOHNSTON {SIC} EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	684035397 -
20130110 1455 1097 4755 (6 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	683441145 -
20121207 1704 1462 9842 (4 YEARS)	
TRAILCON LEASING INC.	  	EQUIPMENT, MOTOR VEHICLES
24 SPECIFIC MOTOR VEHICLES REFERENCED	  	682550127 -
20121031 1405 1462 8802 (8 YEARS)	
PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	EQUIPMENT, OTHER, MOTOR VEHICLES
32 SPECIFIC MOTOR VEHICLES REFERENCED	  	682267266 -
20121018 1710 1462 6093 (8 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	681257187 -
20120906 1709 1462 6400 (4 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	679316805 -
20120620 1003 1462 9005 (4 YEARS)	
G.N. JOHNSTON EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	677537127 -
20120412 1401 1097 4537 (6 YEARS)	
PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	EQUIPMENT, OTHER, MOTOR VEHICLES
10 SPECIFIC MOTOR VEHICLES REFERENCED	  	676771641 -
20120312 1403 1462 1004 (9 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	676694052 -
20120307 1708 1462 9711 (4 YEARS)	
G.N. JOHNSTON EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	676546371 -
20120301 1126 1097 4503 (5 YEARS)	
 
8

					
SECURED PARTY	  	COLLATERAL CLASSIFICATION	  	REFERENCE FILE NO. & REGISTRATION
NO.	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	674667027 -
20111128 1406 1462 4505 (6 YEARS)	
G.N. JOHNSTON EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
MOTOR VEHICLE SCHEDULE ATTACHED
4 SPECIFIC MOTOR VEHICLES REFERENCED	  	672674967 -
20110902 1351 1097 4308 (6 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	671674248 -
20110722 1706 1462 1897 (4 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	671631201 -
20110721 1406 1462 1534 (4 YEARS)	
TRAILER WIZARDS LIMITED	  	EQUIPMENT, OTHER, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	670990266 -
20110627 1402 1462 4685 (3 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	670102533 -
20110524 1701 1462 5702 (4 YEARS)	
G.N. JOHNSTON EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	669423186 -
20110428 1358 1097 4202 (5 YEARS)	
	  		  	AMENDED BY:
20110506 1134 1097 4208	
	  		  	AMENDED BY:
20110914 1438 1097 4330	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	669106341 -
20110414 1702 1462 6102 (4 YEARS)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	668166228 -
20110309 1407 1462 5797 (3 YEARS)	
	  		  	RENEWED BY:
20140210 1404 1462 7298 (1 YEAR)	
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT	  	INVENTORY, EQUIPMENT, ACCOUNTS, OTHER	  	668059038 -
20110304 1417 1590 7676 (7 YEARS)	
G.N. JOHNSTON EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	667271061 -
20110121 1537 1097 4121 (5 YEARS)	
G.N. JOHNSTON EQUIPMENT CO. LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	667271133 -
20110121 1540 1097 4122 (5 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	666730242 -
20101222 1412 1462 9042 (4 YEARS)	
WESTERN TORONTO INTERNATIONAL TRUCKS INC.
TALLMAN TRUCK CENTRE LIMITED	  	EQUIPMENT, MOTOR VEHICLES
4 SPECIFIC MOTOR VEHICLES REFERENCED	  	666420975 -
20101207 1703 1462 5377 (7 YEARS)	
	  		  	AMENDED BY:
20130417 1407 1462 3365	
WESTERN TORONTO INTERNATIONAL TRUCKS INC.
TALLMAN TRUCK CENTRE LIMITED	  	EQUIPMENT, MOTOR VEHICLES
4 SPECIFIC MOTOR VEHICLES REFERENCED	  	666018297 -
20101119 1703 1462 0995 (7 YEARS)	
	  		  	AMENDED BY:
20130417 1407 1462 3367	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	665988327 -
20101118 1732 1462 0722 (4 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	664140546 -
20100901 1714 1462 3199 (4 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	659833551 -
20100315 1706 1462 1657 (5 YEARS)	
XEROX CANADA LTD	  	EQUIPMENT, OTHER	  	659745405 -
20100310 1702 1462 0166 (5 YEARS)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	654843456 -
20090710 1947 1531 1960 (4 YEARS)	
	  		  	RENEWED BY:
20130704 1706 1462 7359 (1 YEAR)	
 
9

					
SECURED PARTY	  	COLLATERAL CLASSIFICATION	  	REFERENCE FILE NO. & REGISTRATION
NO.	
PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	EQUIPMENT, OTHER, MOTOR VEHICLES
12 SPECIFIC MOTOR VEHICLES REFERENCED	  	653733783 -
20090527 1701 1462 1434 (8 YEARS)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	653252589 -
20090506 1701 1462 6001 (6 YEARS)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	653080932 -
20090430 1005 1462 4118 (6 YEARS)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	653096016 -
20090430 1401 1462 4224 (6 YEARS)	
PENSKE TRUCK LEASING CANADA INC
LOCATIONS DE CAMIONS PENSKE CANADA INC	  	EQUIPMENT, OTHER, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	651900852 -
20090306 1405 1462 1820 (8 YEARS)	
HEWLETT-PACKARD FINANCIAL SERVICES CANADA COMPANY	  	EQUIPMENT, OTHER	  	649578393 -
20081029 1437 8077 1301 (25 YEARS)	
	  		  	AMENDED BY:
20130910 1647 8077 4792	
MAXIUM FINANCIAL SERVICES INC.	  	EQUIPMENT, OTHER, MOTOR VEHICLES
2 SPECIFIC MOTOR VEHICLES REFERENCED	  	647507205 -
20080806 1448 1530 6060 (6 YEARS)	
	  		  	AMENDED BY:
20100708 1453 1530 0349	
	  		  	ASSIGNED BY:
20100708 1939 1531 2095	
	  		  	AMENDED BY:
20100712 1452 1530 2214	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	646496613 -
20080630 1004 1462 2980 (8 YEARS)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	645963489 -
20080610 1702 1462 8802 (7 YEARS)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	645963498 -
20080610 1702 1462 8803 (7 YEARS)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	644309811 -
20080417 1703 1462 6430 (7 YEARS)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	644164182 -
20080414 1003 1462 5443 (6 YEARS)	
	  		  	RENEWED BY:
20140326 1403 1462 1350 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	644189265 -
20080414 1703 1462 5660 (7 YEARS)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	633364848 -
20070309 1455 1530 1443 (6 YEARS)	
	  		  	RENEWED BY:
20130115 1703 1462 8095 (1 YEAR)	
	  		  	RENEWED BY:
20140210 1404 1462 7296 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	633364857 -
20070309 1455 1530 1444 (6 YEARS)	
	  		  	RENEWED BY:
20130115 1703 1462 8092 (1 YEAR)	
	  		  	RENEWED BY:
20140210 1404 1462 7297 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	633364893 -
20070309 1455 1530 1448 (7 YEARS)	
 
10

					
SECURED PARTY	  	COLLATERAL CLASSIFICATION	  	REFERENCE FILE NO. & REGISTRATION
NO.	
	  		  	RENEWED BY:
20140304 1409 1462 3579 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	633364902 -
20070309 1455 1530 1449 (7 YEARS)	
	  		  	RENEWED BY:
20140304 1409 1462 3580 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	632939859 -
20070220 1950 1531 4757 (6 YEARS)	
	  		  	RENEWED BY:
20130104 1704 1462 5890 (1 YEAR)	
	  		  	RENEWED BY:
20140127 1423 1462 2662 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	622575576 -
20060207 1943 1531 5954 (8 YEARS)	
	  		  	RENEWED BY:
20140130 1403 1462 3889 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	622537173 -
20060206 1450 1530 2358 (8 YEARS)	
	  		  	RENEWED BY:
20140130 1403 1462 3888 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	622537182 -
20060206 1450 1530 2359 (8 YEARS)	
	  		  	RENEWED BY:
20140130 1403 1462 3885 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	622537191 -
20060206 1450 1530 2360 (8 YEARS)	
	  		  	RENEWED BY:
20140130 1403 1462 3887 (1 YEAR)	
RYDER TRUCK RENTAL CANADA LTD.	  	EQUIPMENT, MOTOR VEHICLES
1 SPECIFIC MOTOR VEHICLE REFERENCED	  	622537209 -
20060206 1450 1530 2361 (8 YEARS)	
	  		  	RENEWED BY:
20140130 1403 1462 3886 (1 YEAR)	
HEWLETT-PACKARD FINANCIAL SERVICES CANADA COMPANY	  	EQUIPMENT, OTHER	  	894386835 -
20030515 1445 8077 3945 (4 YEARS)	
	  		  	AMENDED BY:
20060308 1044 8077 2654	
	  		  	RENEWED BY:
20060308 1448 8077 2724 (15 YEARS)	
ONTARIO - SECURITY INTEREST REGISTERED UNDER SECTION 427 OF THE BANK ACT :

NAME & ADDRESS:	  	UNISOURCE CANADA, INC.
50 EAST WILMOT STREET
RICHMOND HILL, ON L4B 3Z3	
DATE:	  	MARCH 8, 2011	
EXPIRY DATE:	  	DECEMBER 31, 2016	
NUMBER:	  	01261955	
NAME & ADDRESS OF THE BANK:	  	0241 – BANK OF AMERICA NATIONAL ASSOCIATION
56792 – MAIN BRANCH
200 FRONT ST. W., SUITE 2700
TORONTO, ON M5V 3L2	
 
11

Quebec

REF. NO.	  	REGISTRATION NO./
REGISTRATION DATE
(Y-M-D) & TIME	  	PARTIES	  	NATURE OF REGISTRATION/
AMOUNT - CDN $/
AGREEMENT DATE
(Y-M-D)/
FORM	
1.	  	96-0066195-0001
1996-06-05
01:23 PM	  	ASSIGNOR ( AND RE-ASSIGNEE):
UNISOURCE CANADA, INC
 
ASSIGNEE :
STARS TRUST
SUBSEQUENT ASSIGNEE :
CANADIAN MASTERS TRUST
RIGHTS WERE THEN RE-ASSIGNED TO
UNISOURCE CANADA, INC.	  	ASSIGNMENT OF A UNIVERSALITY
OF CLAIMS
1992-09-04	
2.	  	11-0147974-0001
2011-03-09
9:00 AM	  	HOLDER :
BANK OF AMERICA, N.A.
 
GRANTOR :
UNISOURCE CANADA, INC.	  	MOVABLE HYPOTHEC WITHOUT
DELIVERY
$420,000,000
2011-03-08
(PRIVATE WRITING)	
New Brunswick
(A) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 17230384
PROVINCE OR TERRITORY: NEW BRUNSWICK

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	17230384	  	2009-03-06 09:57	  	2017-03-06	
DEBTORS
UNISOURCE CANADA INC
50 EAST WILMOT STREET
RICHMOND HILL ON L4B3Z3
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(B) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 17528456
PROVINCE OR TERRITORY: NEW BRUNSWICK

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	17528456	  	2009-05-27 11:15	  	2017-05-27	
DEBTORS
UNISOURCE CANADA INC
50 EAST WILMOT STREET
RICHMOND HILL ON L4B3Z3
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
 
12

(C) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 19725324
PROVINCE OR TERRITORY: NEW BRUNSWICK

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	19725324	  	2011-02-02 14:47	  	2015-02-02	
DEBTORS
UNISOURCE CANADA INC.
675 ST. GEORGE BLVD.
MONCTON NB E1E 2C2
SECURED PARTIES
G. N. JOHNSTON EQUIPMENT CO. LTD.
5990 AVEBURY ROAD
MISSISSAUGA ON L5R 3R2
(D) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 19814854
PROVINCE OR TERRITORY: NEW BRUNSWICK

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	19814854	  	2011-03-04 13:16	  	2018-03-04	
DEBTORS
UNISOURCE CANADA, INC.
50 EAST WILMOT STREET
RICHMOND HILL ON L4B 3Z3
SECURED PARTIES
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT
335 MADISON AVENUE
NEW YORK NY 10017
(E) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 21213244
PROVINCE OR TERRITORY: NEW BRUNSWICK

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	21213244	  	2012-03-12 17:09	  	2021-03-12	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(F) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 22118871
PROVINCE OR TERRITORY: NEW BRUNSWICK

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	22118871	  	2012-10-19 15:17	  	2020-10-19	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
 
13

(G) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 23961295
PROVINCE OR TERRITORY: NEW BRUNSWICK

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	23961295	  	2014-01-23 12:29	  	2022-01-23	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(H) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 22768428
PROVINCE OR TERRITORY: NEW BRUNSWICK

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	22768428	  	2013-03-27 10:20	  	2019-03-27	
DEBTORS
UNISOURCE CANADA INC.
675 ST. GEORGE STREET
MONCTON NB E1E 2C2
SECURED PARTIES
G. N. JOHNSTON EQUIPMENT CO. LTD.
5990 AVEBURY ROAD
MISSISSAUGA ON L5R 3R2
(I) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 23867880
PROVINCE OR TERRITORY: NEW BRUNSWICK

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	23867880	  	2013-12-18 19:41	  	2017-12-18	
DEBTORS
UNISOURCE CANADA INC.
675 ST GEORGE BLVD
MONCTON NB E1E 2C2
SECURED PARTIES
DOCUMENT DIRECTION LIMITED PARTNERSHIP
3450 SUPERIOR COURT, UNIT 1
OAKVILLE ON L6L 0C4
Nova Scotia
(A) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 14997688
PROVINCE OR TERRITORY: NOVA SCOTIA

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	14997688	  	2009-03-06 10:20	  	2017-03-06	
DEBTORS
UNISOURCE CANADA INC
50 EAST WILMOT STREET
RICHMOND HILL ON L4B3Z3
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
 
14

LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(B) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 15310485
PROVINCE OR TERRITORY: NOVA SCOTIA

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	15310485	  	2009-05-27 11:19	  	2017-05-27	
DEBTORS
UNISOURCE CANADA INC
50 EAST WILMOT STREET
RICHMOND HILL ON L4B3Z3
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(C) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 17766437
PROVINCE OR TERRITORY: NOVA SCOTIA

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	17766437	  	2011-03-04 13:18	  	2018-03-04	
DEBTORS
UNISOURCE CANADA, INC.
50 EAST WILMOT STREET
RICHMOND HILL ON L4B 3Z3
SECURED PARTIES
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT
335 MADISON AVENUE
NEW YORK NY 10017
(D) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 12311478
PROVINCE OR TERRITORY: NOVA SCOTIA

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	12311478	  	2007-04-18 18:21	  	2013-04-18	
DEBTORS
UNISOURCE CANADA INC.
110 SIMMONDS DRIVE
DARTMOUTH NS B3B 1N9
SECURED PARTIES
RYDER TRUCK RENTAL CANADA LTD.
4255 WESTON ROAD
NORTH YORK ON M9L 1W8
(E) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 18354787
PROVINCE OR TERRITORY: NOVA SCOTIA

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	18354787	  	2011-07-21 13:15	  	2015-07-21	
DEBTORS
UNISOURCE CANADA INC
110 SIMMONS DR
DARTMOUTH NS B3B1N9
 
15

UNISOURCE CANADA INC
160 OMANDS CREEK BOULEVARD
WINNIPEG MB R2R1V7
UNISOURCE CANADA INC
1425 DERWENT ST.
DELTA BC V3M6N3
UNISOURCE CANADA INC
50 EAST WILMOT ST.
RICHMOND HILL ON L4B3Z3
SECURED PARTIES
XEROX CANADA LTD
33 BLOOR ST. E. 3RD FLOOR
TORONTO ON M4W3H1
(F) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 19264654
PROVINCE OR TERRITORY: NOVA SCOTIA

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	19264654	  	2012-03-12 17:13	  	2021-03-12	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(G) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 20223004
PROVINCE OR TERRITORY: NOVA SCOTIA

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	20223004	  	2012-10-19 17:11	  	2020-10-19	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603

(H) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 22171268
PROVINCE OR TERRITORY: NOVA SCOTIA

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	22171268	  	2013-12-17 18:10	  	2017-12-17	
DEBTORS
UNISOURCE CANADA INC.
110 SIMMONS DR
DARTMOUTH NS B3B1N9
UNISOURCE CANADA INC
1475 COURTNEY PK, SUITE D
MISSISSAUGA ON L5T2R1
UNISOURCE CANADA INC.
1425 DERWENT WAY
DELTA BC V3M6N3
 
16

SECURED PARTIES
XEROX CANADA LTD
33 BLOOR ST. E. 3RD FLOOR
TORONTO ON M4W3H1
(I) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 22281521
PROVINCE OR TERRITORY: NOVA SCOTIA

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	22281521	  	2014-01-23 13:13	  	2022-01-23	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
Newfoundland and Labrador
(A) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 7194458
PROVINCE OR TERRITORY: NEWFOUNDLAND AND LABRADOR

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	7194458	  	2009-03-06 10:07	  	2017-03-06	
DEBTORS
UNISOURCE CANADA INC
50 EAST WILMOT STREET
RICHMOND HILL ON L4B3Z3
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(B) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 7378615
PROVINCE OR TERRITORY: NEWFOUNDLAND AND LABRADOR

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	7378615	  	2009-05-27 11:17	  	2017-05-27	
DEBTORS
UNISOURCE CANADA INC
50 EAST WILMOT STREET
RICHMOND HILL ON L4B3Z3
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
 
17

LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(C) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 8881445
PROVINCE OR TERRITORY: NEWFOUNDLAND AND LABRADOR

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	8881445	  	2011-03-04 13:18	  	2018-03-04	
DEBTORS
UNISOURCE CANADA, INC.
50 EAST WILMOT STREET
RICHMOND HILL ON L4B 3Z3
SECURED PARTIES
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT
335 MADISON AVENUE
NEW YORK NY 10017
(D) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 9802332
PROVINCE OR TERRITORY: NEWFOUNDLAND AND LABRADOR

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	9802332	  	2012-03-12 17:11	  	2021-03-12	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(E) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 10428431
PROVINCE OR TERRITORY: NEWFOUNDLAND AND LABRADOR

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	10428431	  	2012-10-19 16:59	  	2020-10-19	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(F) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 11662954
PROVINCE OR TERRITORY: NEWFOUNDLAND AND LABRADOR

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL	  	11662954	  	2014-01-23 12:43	  	2022-01-23	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
 
18

SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
Prince Edward Island
(A) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 2206080
PROVINCE OR TERRITORY: PRINCE EDWARD ISLAND

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL        	  	2206080        	  	2009-03-06 10:35        	  	2017-03-06	
DEBTORS
UNISOURCE CANADA INC
50 EAST WILMOT STREET
RICHMOND HILL ON L4B3Z3
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(B) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 2256258
PROVINCE OR TERRITORY: PRINCE EDWARD ISLAND

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL        	  	2256258        	  	2009-05-27 11:21        	  	2017-05-27	
DEBTORS
UNISOURCE CANADA INC
50 EAST WILMOT STREET
RICHMOND HILL ON L4B3Z3
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603

(C) REGISTRATION DETAILS FOR REGISTRATION NUMBER: . 2630077
PROVINCE OR TERRITORY: PRINCE EDWARD ISLAND

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL        	  	2630077        	  	2011-03-04 13:19        	  	2018-03-04	
DEBTORS
UNISOURCE CANADA, INC.
50 EAST WILMOT STREET
RICHMOND HILL ON L4B 3Z3
 
19

SECURED PARTIES
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT
335 MADISON AVENUE
NEW YORK NY 10017
(D) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 2860292
PROVINCE OR TERRITORY: PRINCE EDWARD ISLAND

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL        	  	2860292        	  	2012-03-12 15:36        	  	2021-03-12	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(E) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 3023294
PROVINCE OR TERRITORY: PRINCE EDWARD ISLAND

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL        	  	3023294        	  	2012-10-19 17:14        	  	2020-10-19	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
(F) REGISTRATION DETAILS FOR REGISTRATION NUMBER: 3347818
PROVINCE OR TERRITORY: PRINCE EDWARD ISLAND

TYPE	  	NUMBER	  	DATE/TIME	  	EXPIRY DATE	
ORIGINAL        	  	3347818        	  	2014-01-23 13:34        	  	2022-01-23	
DEBTORS
UNISOURCE CANADA INC
560 HENSALL CIRCLE
MISSISSAUGA ON L5A1Y1
SECURED PARTIES
PENSKE TRUCK LEASING CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
LOCATIONS DE CAMIONS PENSKE CANADA INC
RT 10 GREEN HILLS, PO BOX 791
READING PA 19603
 
20

2. Closing Date PPSA Filings

Name of Entity	  	Secured Party	  	Jurisdiction	  	Filing Office	  	Document Filed	
1.	 	Unisource Canada, Inc.	  	Bank of America, N.A., as ABL Collateral Agent	  	British Columbia	  	Personal Property Security Register	  	PPSA Financing Statement	
2.	 	Unisource Canada, Inc.	  		  	Alberta	  		  		
3.	 	Unisource Canada, Inc.	  		  	Saskatchewan	  		  		
4.	 	Unisource Canada, Inc.	  		  	Manitoba	  		  		
5.	 	Unisource Canada, Inc.	  		  	Ontario	  		  		
6.	 	Unisource Canada, Inc.	  		  	Newfoundland	  		  		
7.	 	Unisource Canada, Inc.	  		  	Nova Scotia	  		  		
8.	 	Unisource Canada, Inc.	  		  	New Brunswick	  		  		
9.	 	Unisource Canada, Inc.	  		  	Prince Edward Island	  		  		
10.	 	Unisource Canada, Inc.	  		  	Quebec	  	Register of Personal and Moveable Real Rights	  	Application for Registration (form RH)	
11.	 	Unisource Canada, Inc.	  		  	Ontario	  	Canadian Securities Registration System	  	Notice of Intention to Take Security under the Bank Act	
12.	 	Unisource Canada, Inc.	  		  	District of Columbia	  		  		
3. Closing Date IP Filings
 
 	1.	Confirmation of Security Interest in Intellectual Property – Trade-marks filed with the Canadian Intellectual Property Office	
 
 	2.	Confirmation of Security Interest in Intellectual Property – Copyrights filed with the Canadian Intellectual Property Office	
 
21

Schedule 4A
Financing Statements

Name of Entity	  	Secured
Party	  	Jurisdiction	  	Filing Office	  	Document Filed	
1.   Unisource Canada, Inc.	  	Bank of America, N.A., as ABL Collateral Agent	  	British Columbia	  	Personal Property Security Register	  	PPSA Financing Statement	
2.   Unisource Canada, Inc.	  		  	Alberta	  		  		
3.   Unisource Canada, Inc.	  		  	Saskatchewan	  		  		
4.   Unisource Canada, Inc.	  		  	Manitoba	  		  		
5.   Unisource Canada, Inc.	  		  	Ontario	  		  		
6.   Unisource Canada, Inc.	  		  	Newfoundland	  		  		
7.   Unisource Canada, Inc.	  		  	Nova Scotia	  		  		
8.   Unisource Canada, Inc.	  		  	New Brunswick	  		  		
9.   Unisource Canada, Inc.	  		  	Prince Edward Island	  		  		
10. Unisource Canada, Inc.	  		  	Quebec	  	Register of Personal and Moveable Real Rights	  	Application for Registration (form RH)	
11. Unisource Canada, Inc.	  		  	Ontario	  	Canadian Securities Registration System	  	Notice of Intention to Take Security under the Bank Act	
12. Unisource Canada, Inc.	  		  	District of Columbia	  		  		
 
22

Schedule 4B
Jurisdiction of Organization
 
1.	Jurisdiction of Organization	
Canada ( Canada Business Corporations Act )
 
2.	Location of Chief Executive Office	
6185 McLaughlin Road
Mississauga, ON
L5R 3W7
 
3.	Location of Books and Records	
6185 McLaughlin Road, Mississauga, ON L5R 3W7
(location of corporate minutebooks)
4300 Hickmore Street, St. Laurent, Quebec H4T 1K2
(location of financial records)
 
4.	Location of Collateral	
See Numbers 5 and 6 below.
 
5.	Location of all other places of business	

Province	  	City	  	Address	
Nova Scotia	  	Dartmouth	  	110 Simmonds Drive B3B 1N9	
Ontario	  	London	  	1505 Sise Road N6A 4E3	
Ontario	  	Mississauga	  	560 Hensall Circle L5A 1Y1	
 
6.	Location of leased facilities and name of lessor/sublessor	

Province	  	City	  	Address	  	Lessor/Sublessor	
Alberta	  	Edmonton	  	11704 - 186 th  St. N.W.	  	Yellowhead Crossing II, LP	
Alberta	  	Calgary	  	6040 11th Street N.E.	  	833759 Alberta, Inc.	
Newfoundland	  	St. John’s	  	60 Clyde Avenue, Suite 100	  	N.C.H. Holdings Limited	
New Brunswick	  	Moncton	  	675 St. George Blvd.	  	2093152 Ontario Inc.	
Quebec	  	St. Laurent	  	4300 Hickmore Street	  	Hoopp Realty, Inc.	
Quebec	  	Quebec City	  	1750 rue Newton	  	Cominar Real Estate Investment Trust	
Ontario	  	Ottawa	  	950 Ages Drive	  	Kayush Investments, Ltd.	
 
23

							
Province	  	City	  	Address	  	Lessor/Sublessor	
Saskatchewan	  	Saskatoon	  	858-57 Street East	  	Tim Turple Holdings, Inc	
Saskatchewan	  	Regina	  	480 Hoffer Drive	  	101104406 Saskatchewan Ltd.	
Ontario	  	Mississauga	  	1475 Courtneypark Drive	  	Orlando Corporation and Orion Properties, Ltd.	
Ontario	  	Mississauga	  	6185 McLaughlin Road	  	Orlando Corporation	
Ontario	  	Richmond Hill	  	1 West Pearce St, Suite 600	  	Capital Centre Limited	
British Columbia	  	Prince George	  	1021 Eastern Street	  	NOORT Investments	
British Columbia	  	New Westminster	  	1425 Derwent Way	  	349393 B.C. Ltd. And Dayhu Investments Ltd.	
Manitoba	  	Winnipeg	  	160 Omands Creek Blvd.	  	Opus Properties Corp.	
 
24

Schedule 5
Intellectual Property
Patents, Copyrights, Trade-marks and Industrial Designs
 
1.	Patents	
None.
 
2.	Trade-marks	

Trademark	  	Application Number	  	Application
Date
m/dd/yyyy	  	Registration
Number	  	Registration
Date
m/dd/yyyy	
://unisourcedesign. ca	  	1207098	  	2/20/2004	  	TMA648965	  	9/26/2005	
AGL	  	1130323	  	2/6/2002	  	TMA606298	  	3/26/2004	
ALLSTAR & DESIGN	  	1011507	  	4/13/1999	  	TMA535793	  	10/26/2000	
ALLSTAR & DESIGN	  	0724381	  	3/11/1993	  	TMA450506	  	11/24/1995	
ALLSTAR LIBERATE & DESIGN	  	1242379	  	12/31/2004	  	TMA648880	  	9/23/2005	
BENCHMARK	  	0415688	  	9/20/1977	  	TMA237701	  	11/30/1979	
BENCHMARK	  	0357744	  	10/12/1972	  	TMA199535	  	5/31/1974	
CAMEO DESIGN	  	0389995	  	9/23/1975	  	TMA216796	  	10/22/1976	
CAMEO DESIGN	  	0389994	  	9/23/1975	  	TMA216902	  	10/29/1976	
CIRCLE & DESIGN	  	0357745	  	10/12/1972	  	TMA199536	  	5/31/1974	
COLORSOURCE	  	0726333	  	4/8/1993	  	TMA430268	  	7/8/1994	
COMSOURCE	  	0546311	  	7/17/1985	  	TMA329838	  	7/10/1987	
COPYSOURCE	  	0612053	  	7/27/1988	  	TMA355411	  	5/5/1989	
CUSTOMER SOLUTIONS IN A GLOBAL MARKET	  	1515090	  	2/14/2011	  	TMA841212	  	1/25/2013	
DELIVER THE BEST VALUE EVERY TIME	  	1311023	  	7/28/2006	  	TMA702951	  	12/12/2007	
DOCUSOURCE	  	0779631	  	4/5/1995	  	TMA479748	  	8/7/1997	
ECONOSOURCE	  	0726334	  	4/8/1993	  	TMA430269	  	7/8/1994	
ECOSOURCE DESIGN	  	1347473	  	5/15/2007	  	TMA722083	  	8/26/2008	
ELLIS’ CAMEO WOMEN’S HEAD & DESIGN	  	0114796	  	7/10/1923	  	TMDA033942	  	7/28/1923	
ENVIRO 50	  	0651343	  	2/20/1990	  	TMA383981	  	5/3/1991	
ESCE & DESIGN	  	1044772	  	2/1/2000	  	TMA567114	  	9/10/2002	
EXPERIENCE THE POWER OF THE SOURCE	  	1130322	  	2/6/2002	  	TMA606300	  	3/26/2004	
FORDIS & DESIGN	  	1418516	  	11/17/2008	  	TMA760970	  	3/5/2010	
FORDIS DESIGN	  	1409222	  	9/2/2008	  	TMA771478	  	7/8/2010	
INTER-GRAPH	  	0643428	  	10/25/1989	  	TMA386574	  	7/12/1991	
LIBERATE	  	1236274	  	11/4/2004	  	TMA648879	  	9/23/2005	
LIVRER LA VALEUR OPTIMALE A CHAQUE FOIS	  	1311024	  	7/28/2006	  	TMA702950	  	12/12/2007	
MONDRIAN	  	1199031	  	12/4/2003	  	TMA641403	  	6/6/2005	
MONDRIAN-HALL & DESIGN	  	1462094	  	12/8/2009	  	TMA780695	  	10/26/2010	
MONDRIAN-HALL Logo	  	1492222	  	8/13/2010	  	TMA806712	  	9/14/2011	
ONE COMPANY, ONE SOURCE	  	1152940	  	9/17/2002	  	TMA614609	  	7/12/2004	
ONE NAME. ONE VISION. ONE SOURCE.	  	0748578	  	3/1/1994	  	TMA459279	  	6/14/1996	
ONE SOURCE. MANY SOLUTIONS.	  	0755923	  	5/27/1994	  	TMA453067	  	1/26/1996	
PAPER ONLY	  	1336234	  	2/20/2007	  	TMA721046	  	8/15/2008	
PAPER ONLY LOGO	  	1349481	  	5/30/2007	  	TMA721003	  	8/15/2008	
PAPER PLUS	  	0492991	  	10/5/1982	  	TMA302305	  	4/26/1985	
PAPERONLY .CA	  	1336910	  	2/26/2007	  	TMA721032	  	8/15/2008	
 
25

									
Trademark	  	Application Number	  	Application
Date
m/dd/yyyy	  	Registration
Number	  	Registration
Date
m/dd/yyyy	
PAPERONLY.CA LOGO	  	1360802	  	8/23/2007	  	TMA717059	  	6/20/2008	
PAPIER PLUS	  	0538923	  	3/26/1985	  	TMA323390	  	2/6/1987	
PAPIER SEULEMENT	  	1349313	  	5/29/2007	  	TMA766287	  	5/11/2010	
PAPIER SEULEMENT LOGO	  	1349483	  	5/30/2007	  	TMA766288	  	5/11/2010	
PARTY PACK	  	1012105	  	4/7/1999	  	TMA580338	  	4/30/2003	
PRICE DAXION	  	0564138	  	6/9/1986	  	TMA333508	  	10/30/1987	
PUR PERFORMANCE & DESIGN	  	1289407	  	2/10/2006	  	TMA818590	  	2/28/2012	
PUR VALUE & DESIGN	  	1349158	  	5/28/2007	  	TMA721002	  	8/15/2008	
PUR VALUE & DESIGN	  	1349158, 01	  	12/7/2012	  	Searched	  	12/17/2012	
PUR VALUE & DESIGN	  	1298559	  	4/21/2006	  	TMA799568	  	6/8/2011	
PUR VALUE & DESIGN	  	1259864	  	6/2/2005	  	TMA721319	  	8/19/2008	
SAN REMO GLOSS	  	0720031	  	1/6/1993	  	TMA424802	  	3/4/1994	
SAN REMO MATTE	  	0720032	  	1/6/1993	  	TMA424803	  	3/4/1994	
SAN REMO PLUS	  	1069712	  	8/3/2000	  	TMA563393	  	6/13/2002	
SAVE-A-TREE	  	0642436	  	10/11/1989	  	TMA382657	  	4/5/1991	
SAVE-A-TREE & DESIGN	  	1186553	  	8/7/2003	  	TMA648939	  	9/26/2005	
SAVE-A-TREE & DESIGN	  	0643599	  	10/30/1989	  	TMA385138	  	5/31/1991	
SAVE-A-TREE/DU PAPIER A L-INFINI & DESIGN	  	1267668	  	8/8/2005	  	TMA684555	  	3/23/2007	
SAVE-A-TREE/PAPER GOES A LONG WAY. & DESIGN	  	1255270	  	4/25/2005	  	TMA684747	  	3/27/2007	
SELECT SOURCE	  	0819149	  	7/29/1996	  	TMA498660	  	8/14/1998	
SIGNET	  	0741378	  	11/16/1993	  	TMA484999	  	10/30/1997	
SMITH PAPER	  	0762254	  	8/22/1994	  	TMA515634	  	8/27/1999	
SOLUTIONS	  	1298561	  	4/21/2006	  	TMA686887	  	5/4/2007	
SPHINX & DESIGN	  	0724597	  	3/15/1993	  	TMA464633	  	10/25/1996	
STARBRITE	  	0246327	  	7/3/1958	  	TMA112542	  	12/12/1958	
STARBRITE & DESIGN	  	1186557	  	8/7/2003	  	TMA650704	  	10/18/2005	
U & DESIGN	  	1280255	  	11/21/2005	  	TMA684554	  	3/23/2007	
U & DESIGN	  	0728077	  	5/3/1993	  	TMA443903	  	6/19/1995	
U’s & DESIGN	  	0718499	  	12/10/1992	  	TMA444908	  	7/7/1995	
UNISOURCE & DESIGN	  	0718488	  	12/10/1992	  	TMA448518	  	10/6/1995	
U UNISOURCE & DESIGN	  	1280375	  	11/18/2005	  	TMA678628	  	12/20/2006	
UNISOURCE CANADA & DESIGN	  	1224295	  	7/21/2004	  	TMA693844	  	8/10/2007	
U UNISOURCE CANADA & DESIGN	  	1185844	  	7/28/2003	  	TMA646006	  	8/18/2005	
U UNISOURCE FINANCE & DESIGN	  	1226741	  	8/11/2004	  	TMA644937	  	7/26/2005	
UBUY & DESIGN	  	1418681	  	11/18/2008	  	TMA816165	  	1/25/2012	
UNE COMPAGNIE, UNE SOURCE	  	1280257	  	11/21/2005	  	TMA677843	  	11/29/2006	
UNE SOURCE. PLUSIEURS SOLUTIONS	  	0887965	  	8/14/1998	  	TMA522498	  	1/28/2000	
UNICOVER	  	0734356	  	8/3/1993	  	TMA436350	  	11/25/1994	
UNISOURCE	  	0728076	  	5/3/1993	  	TMA443902	  	6/16/1995	
UNISOURCE	  	0712752	  	9/11/1992	  	TMA444899	  	7/7/1995	
UNISOURCE FINANCE	  	0835618	  	2/5/1997	  	TMA561129	  	5/1/2002	
UNISOURCE WIDE FORMAT DOCUJET & DESIGN	  	1010760	  	4/1/1999	  	TMA571644	  	12/4/2002	
UNISOURCEDESIGN	  	1207097	  	2/20/2004	  	TMA683995	  	3/19/2007	
STARBRITE + AND DESIGN	  	1553849	  	11/25/2011	  	TMA856779	  	8/01/2013	
STARBRITE + AND DESIGN	  	1553847	  	25/11/2011	  	TMA 856778	  	8/01/2013	
DES SOLUTIONS POUR LES CLIENTS DANS UN MARCHÉ MONDIAL	  	1563330	  	2/9/2012	  	TMA854792	  	7/9/2013	
DEFIANCE	  	1595202	  	9/21/2012	  	TMA862609	  	10/15/2013	
BRAND EFFICIENCY	  	1622018	  	4/10/2013	  	Advertised	  	4/15/2013	
RESPECT	  	1616221	  	2/28/2013	  	Searched	  	3/5/2013	
SELECTSOURCE	  	1567480	  	3/7/2012	  	TMA859763	  	9/10/2013	
COMET HI-BRITE	  	1517423	  	3/2/2011	  	TMA859757	  	9/10/2013	
 
26

									
Trademark	  	Application Number	  	Application
Date
m/dd/yyyy	  	Registration
Number	  	Registration
Date
m/dd/yyyy	
R RESPECT & DESIGN	  	1616222	  	2/28/2013	  	Searched	  	3/5/2013	
UDIGITAL	  	1651535	  	11/12/2013	  	Formalized	  		
STEALTH	  	1616217	  	2/28/2013	  	Searched	  	3/5/2013	
AVENGER	  	1616220	  	2/28/2013	  	Searched	  	3/5/2013	
UBRAND	  	1650418	  	11/01/2013	  	Formalized	  		
UVELVET	  	1650417	  	11/01/2013	  	Formalized	  		
PROSOURCE	  	0754463	  	05/11/1994	  	TMA504290	  	11/18/1998	
U BRAND VELVET & DESIGN	  	1657398	  	12/20/2013	  	Formalized	  		
U BRAND VELVET & DESIGN	  	1657396	  	12/20/2013	  	Formalized	  		
U BRAND GLOSS & DESIGN	  	1657395	  	12/20/2013	  	Formalized	  		
U BRAND GLOSS & DESIGN	  	1657251	  	12/20/2013	  	Formalized	  		
U BRAND DIGITAL & DESIGN	  	1657250	  	12/20/2013	  	Formalized	  		
U BRAND DIGITAL & DESIGN	  	1657249	  	12/20/2013	  	Formalized	  		
U BRAND & DESIGN	  	1657248	  	12/20/2013	  	Formalized	  		
U BRAND & DESIGN	  	1657245	  	12/20/2013	  	Formalized	  		
UGLOSS	  	1656918	  	12/18/2013	  	Formalized	  		
 
3.	Copyrights	

Copyright	  	Registration No.	  	Registration
Date	
Electronic price list	  	454282	  	7/9/1996	
 
4.	Industrial Designs	
None.
Material Registered Patent, Copyright, Trade-mark and Industrial Design Licenses
 
1.	Material Patent Licenses	
None.
 
2.	Material Trade-mark Licenses	
None.
 
3.	Material Copyright Licenses	
None.
 
4.	Material Industrial Design Licenses	
None
 
27

Annex 1 to
Canadian Guarantee and Collateral Agreement
ACKNOWLEDGEMENT AND CONSENT 1
The undersigned hereby acknowledges receipt of a copy of the Canadian Guarantee and Collateral Agreement, dated as of July [ — ], 2014 (the “ Agreement ”;), capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Agreement or the ABL Credit Agreement referred to therein, as the case may be), made by the Canadian Granting Parties party thereto in favour of Bank of America, N.A., as Administrative Agent and ABL Collateral Agent. The undersigned agrees for the benefit of the Administrative Agent and the Canadian Facility Lenders as follows:
The undersigned will be bound by the terms of the Agreement applicable to it as an Issuer (as defined in the Agreement) and will comply with such terms insofar as such terms are applicable to the undersigned as an Issuer.
The undersigned will notify the ABL Collateral Agent promptly in writing of the occurrence of any of the events described in subsection 5.3.1 of the Agreement.
The terms of subsections 6.3(c) and 6.7 of the Agreement shall apply to it, mutatis mutandis , with respect to all actions that may be required of it pursuant to subsection 6.3(c) or 6.7 of the Agreement.

[NAME OF ISSUER]	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
Address for Notices:	

	 	 	

1  	This consent is necessary only with respect to any Issuer that is not also a Canadian Granting Party.	
 
Annex 1-1

Annex 2 to
Canadian Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT, dated as of [            ] [    ], 20[    ], made by [                    ], a [            ] corporation (the “ Additional Canadian Granting Party ”), in favour of Bank of America, N.A., as collateral agent (in such capacity, the “ ABL Collateral Agent ”) and as administrative agent (in such capacity, the “ Administrative Agent ”) for the banks and other financial institutions from time to time party to the ABL Credit Agreement referred to below as a Canadian Facility Lender and the other Secured Parties (as defined in the Canadian Guarantee and Collateral Agreement). All capitalized terms not defined herein shall have the meaning ascribed to them in such Canadian Guarantee and Collateral Agreement referred to below, or if not defined therein, in the ABL Credit Agreement.
W I T N E S S E T H :
WHEREAS, XPEDX INTERMEDIATE, LLC, a Delaware limited liability company (together with its successors and assigns, the “ Parent Borrower ”), XPEDX, LLC, a New York limited liability company (together with its successors and assigns, the “ OpCo Borrower ”) and UNISOURCE CANADA, INC., an Ontario amalgamated corporation (the “ Canadian Borrower ”), entered into a certain ABL Credit Agreement dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ ABL Credit Agreement ”);
WHEREAS, in connection with the ABL Credit Agreement, the Canadian Borrower and certain Canadian Guarantors are, or are to become, parties to the Canadian Guarantee and Collateral Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ Canadian Guarantee and Collateral Agreement ”), in favour of the ABL Collateral Agent, for the benefit of the Secured Parties (as defined in the Canadian Guarantee and Collateral Agreement);
WHEREAS, the ABL Credit Agreement requires the Additional Canadian Granting Party to become a party to the Canadian Guarantee and Collateral Agreement; and
WHEREAS, the Additional Canadian Granting Party has agreed to execute and deliver this Assumption Agreement in order to become a party to the ABL Guarantee and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Canadian Guarantee and Collateral Agreement . By executing and delivering this Assumption Agreement, the Additional Canadian Granting Party, as provided in subsection 9.15 of the Canadian Guarantee and Collateral Agreement, hereby becomes a party to the Canadian Guarantee and Collateral Agreement as a Canadian Granting Party thereunder with the same force and effect as if originally
 
Annex 2-1

named therein as a [Canadian Guarantor] [Canadian Grantor and Canadian Pledgor] [and Canadian Grantor] [and Canadian Pledgor] 2 and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a [Canadian Guarantor] [Canadian Grantor and Canadian Pledgor] [and Canadian Grantor] [and Canadian Pledgor] 3 thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules [            ] to the Canadian Guarantee and Collateral Agreement, and such Schedules are hereby amended and modified to include such information. The Additional Canadian Granting Party hereby represents and warrants that each of the representations and warranties of such Additional Canadian Granting Party, in its capacities as a [Canadian Guarantor] [Canadian Grantor and Canadian Pledgor] [and Canadian Grantor] [and Canadian Pledgor], 4 contained in Section 4 of the Canadian Guarantee and Collateral Agreement is true and correct in all material respects on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. Each Additional Canadian Granting Party hereby grants, as and to the same extent as provided in the Canadian Guarantee and Collateral Agreement, to the ABL Collateral Agent, for the benefit of the Secured Parties, a continuing security interest in the [Collateral (as such term is defined in subsection 3.1 of the Canadian Guarantee and Collateral Agreement) of such Additional Canadian Granting Party] [and] [the Pledged Collateral (as such term is defined in the Canadian Guarantee and Collateral Agreement) of such Additional Canadian Granting Party, except as provided in subsection 3.3 of the Canadian Guarantee and Collateral Agreement].
2. GOVERNING LAW . THIS ASSUMPTION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

2  	Indicate the capacities in which the Additional Canadian Granting Party is becoming a Canadian Grantor.	
3  	Indicate the capacities in which the Additional Canadian Granting Party is becoming a Canadian Grantor.	
4  	Indicate the capacities in which the Additional Canadian Granting Party is becoming a Canadian Grantor.	
 
Annex 2-2

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL CANADIAN GRANTING PARTY]	
		
By:	 	 	
	 	Name:	
	 	Title:	

Acknowledged and Agreed to as
of the date hereof by:	
	
BANK OF AMERICA, N.A.,
as ABL Collateral Agent and Administrative Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
Annex 2-3

Annex 3 to
Canadian Guarantee and Collateral Agreement
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT, dated as of [        ] [    ], 20[    ], made by [                    ], a [            ] corporation (the “ Additional Canadian Pledgor ”), in favour of BANK OF AMERICA, N.A., as collateral agent (in such capacity, the “ ABL Collateral Agent ”) and as administrative agent (in such capacity, the “ Administrative Agent ”) for the banks and other financial institutions from time to time party to the ABL Credit Agreement referred to below as a Canadian Facility Lender and the other Secured Parties (as defined in the Canadian Guarantee and Collateral Agreement). All capitalized terms not defined herein shall have the meaning ascribed to them in such Canadian Guarantee and Collateral Agreement referred to below, or if not defined therein, in the ABL Credit Agreement.
W I T N E S S E T H :
WHEREAS, XPEDX INTERMEDIATE, LLC, a Delaware limited liability company (together with its successors and assigns, the “ Parent Borrower ”), XPEDX, LLC, a New York limited liability company (together with its successors and assigns, the “ OpCo Borrower ”) and UNISOURCE CANADA, INC., an Ontario amalgamated corporation (the “ Canadian Borrower ”), entered into a certain ABL Credit Agreement dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, together with any agreement extending the maturity of, or restructuring, refunding, refinancing or increasing the Indebtedness under such agreement or any successor agreements, the “ ABL Credit Agreement ”);
WHEREAS, in connection with the ABL Credit Agreement, the Canadian Borrower and certain Canadian Guarantors are, or are to become, parties to the Canadian Guarantee and Collateral Agreement, dated as of July [ — ], 2014 (as amended, supplemented, waived or otherwise modified from time to time, the “ Canadian Guarantee and Collateral Agreement ”), in favour of the ABL Collateral Agent, for the benefit of the Secured Parties (as defined in the Canadian Guarantee and Collateral Agreement);
WHEREAS, the ABL Credit Agreement requires the Additional Canadian Pledgor to become a Canadian Pledgor under the Canadian Guarantee and Collateral Agreement with respect to Capital Stock of certain new Subsidiaries of the Additional Canadian Pledgor; and
WHEREAS, the Additional Canadian Pledgor has agreed to execute and deliver this Supplemental Agreement in order to become such a Canadian Pledgor under the Canadian Guarantee and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Canadian Guarantee and Collateral Agreement . By executing and delivering this Supplemental Agreement, the Additional Canadian Pledgor, as provided in subsection 9.15 of the Canadian Guarantee and Collateral Agreement, hereby becomes a Canadian Pledgor under the Canadian Guarantee and Collateral Agreement with respect to the shares of Capital Stock of the Subsidiary of the Additional Canadian Pledgor listed in Annex 1-A hereto, and will be bound by all terms, conditions and duties applicable to a Canadian Pledgor under the Canadian Guarantee and Collateral Agreement, as a Canadian Pledgor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedule 2 to the Canadian Guarantee and Collateral Agreement, and such Schedule 2 is hereby amended and modified to include such information.
 
Annex 3-1

2. GOVERNING LAW . THIS SUPPLEMENTAL AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE.
 
Annex 3-2

IN WITNESS WHEREOF, the undersigned has caused this Supplemental Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL CANADIAN PLEDGOR]	
		
By:	 	 	
	 	Name:	
	 	Title:	

Acknowledged and Agreed to as
of the date hereof by:	
	
BANK OF AMERICA, N.A.,
as ABL Collateral Agent and Administrative Agent	
		
By:	 	 	
	 	Name:	
	 	Title:	
 
Annex 3-3

Exhibit 10.12
FORM OF TRANSITION SERVICES AGREEMENT
THIS AGREEMENT (this “ Agreement ”) is made as of [ — ], between International Paper Company, a New York corporation (“ IP ”), and Veritiv Corporation, a Delaware corporation (“ Spinco ” and, together with IP, the “ Parties ”).
WHEREAS, IP, Spinco and UWW Holdings, Inc., a Delaware corporation, have entered into the Contribution and Distribution Agreement, dated as of January 28, 2014 (the “ Contribution and Distribution Agreement ”), pursuant to which, among other things, certain assets and liabilities constituting the Spinco Business will be transferred to Spinco and its Subsidiaries, and all of the outstanding shares of Spinco Common Stock will be distributed to IP’s stockholders;
WHEREAS, the Spinco Business uses certain services provided by IP or by third parties under contract to IP, and Spinco desires to obtain the use of these services for the purpose of enabling it to manage an orderly transition;
WHEREAS, Spinco acknowledges that IP is not in the business of providing such services to third parties; and
WHEREAS, capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Contribution and Distribution Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
 
1.	DEFINITIONS; INTERPRETATION	
1.1 Definitions . The following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:
“ Additional Services ” has the meaning set forth in Section 2.11 .
“ Agreement ” has the meaning set forth in the preamble.
“ Contribution and Distribution Agreement ” has the meaning set forth in the recitals.
“ Distribution Date ” means the date of closing of the transactions contemplated by the Contribution and Distribution Agreement.
“ Excluded Services ” are those services set forth on Schedule II hereto.
“ First Extension Period ” means the period of time from and including the 13th month following the Distribution Date through and including the 18th month following the Distribution Date.
“ Intellectual Property ” means, collectively, any U.S. and non-U.S. issued, registered, unregistered and pending: (i) patents and patent applications (including any divisionals,

continuations, continuations-in-part, reissues, renewals, re-examinations, extensions, provisional and applications for any of the foregoing), inventor’s certificates, utility model rights and similar rights, petty patents and applications therefor; (ii) works of authorship, mask works, copyrights, and copyright and mask work registrations and applications for registration; (iii) trademarks and service marks (including those which are protected without registration due to their well-known status), trade names, corporate names, domain names, logos, slogans, taglines, trade dress, general intangibles of like nature, and other indicia of source, origin, endorsement, sponsorship or certification, designs, industrial designs, product packaging shape, and other elements of product and product packaging appearance together with all registrations and applications for registration of any of the foregoing and all goodwill related to any of the foregoing; (iv) unpatented inventions (whether or not patentable), trade secrets under applicable law, know-how and confidential or proprietary information, including (in whatever form or medium), discoveries, ideas, compositions, rights in software (including all source and object code related thereto), computer software documentation, database, drawings, designs, plans, proposals, specifications, photographs, samples, models, processes, procedures, data, information, manuals, reports, financial, marketing and business data, pricing and cost information, correspondence and notes; (v) all claims and rights related to any of the foregoing; and (vi) all other intellectual property or proprietary rights.
“ Licensee ” has the meaning set forth in Section 16 .
“ Licensor ” has the meaning set forth in Section 16 .
“ Losses ” means any damage, loss, liability, expense, lost profits or diminution in value (including reasonable expenses of investigation, enforcement and collection and reasonable attorneys’ and accountants’ fees and expenses), but shall not include liability to another Party or any of its Affiliates (or any of their respective Related Parties (as defined in the Contribution and Distribution Agreement) for any exemplary damages or punitive damages, or any other damages to the extent not reasonably foreseeable, arising out of or in connection with this Agreement or any Transaction Agreement (in each case, unless any such damages are payable to a third party pursuant to a Third-Party Claim).
“ Materials ” has the meaning set forth in Section 15.1 .
“ Merger Agreement ” has the meaning set forth in the Contribution and Distribution Agreement.
“ Migration ” means the transition or migration from the provision of a particular Service by Service Provider to Service Recipient under this Agreement to performance of such Service by Service Recipient or a third party designated by Service Recipient.
“ Migration Services ” has the meaning set forth in Section 5.2 .
“ Omitted Services ” has the meaning set forth in Section 2.9 .
“ Party ” means either IP or Spinco, as the context requires, and “ Parties ” means both of them, as the context requires.
 
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“ Post-Term Invoice ” has the meaning set forth in Section 3.9 .
“ Project Manager ” has the meaning set forth in Section 14.1 .
“ Providing Party ” has the meaning set forth in Section 11 .
“ Receiving Party ” has the meaning set forth in Section 11 .
“ Reference Period ” means the 2013 calendar year.
“ Reverse Transition Services ” means each service specified in Part B of Schedule I hereto to be provided from Spinco to IP.
“ Sales and Service Taxes ” has the meaning set forth in Section 3.7 .
“ Second Extension Period ” means the period of time from and including the 19th month following the Distribution Date through and including the 24th month following the Distribution Date.
“ Schedules ” shall mean Schedule I , Schedule II , Schedule III and any Supplemental Schedule.
“ Security Policies ” has the meaning set forth in Section 2.5 .
“ Service ” means, as the context requires, one or more Transition Services and/or one or more Reverse Transition Services.
“ Service Delivery Environment ” means the equipment, software, systems, databases, communications networks and connectivity, and facilities used by Service Provider to provide the Services.
“ Service Fees ” has the meaning set forth in Section 3.1 .
“ Service Provider ” means, in the case of Transition Services, IP and any of its Affiliates providing Transition Services hereunder, and, in the case of Reverse Transition Services, Spinco and any of its Subsidiaries to the extent that they are providing Reverse Transition Services hereunder.
“ Service Provider Fiscal Month ” means a month during Service Provider’s fiscal year, as determined by Service Provider for accounting purposes.
“ Service Provider Indemnitees ” has the meaning set forth in Section 6.2 .
“ Service Recipient ” means, in the case of Transition Services, Spinco and any of its Affiliates receiving Transition Services hereunder, and, in the case of Reverse Transition Services, IP and any of its Subsidiaries to the extent that they are receiving Reverse Transition Services hereunder.
 
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“ Service Recipient Data ” means all the data owned and provided solely by Service Recipient, or created by Service Provider solely on behalf, or for the benefit, of Service Recipient, that is used by Service Provider solely in relation to the provision of the Services, including employee information, customer information, product details and pricing information.
“ Service Recipient Indemnitees ” has the meaning set forth in Section 6.1 .
“ Supplemental Schedule ” has the meaning set forth in Section 2.1 .
“ Term ” has the meaning set forth in Section 2.1 .
“ Transition Period ” means the period from the Distribution Date until all of the Terms for all of the Services have expired or otherwise terminated in accordance with Section 12 , and no further Services are being provided in connection with the Migration; provided that in no event shall the Transition Period exceed a period of time of one year or, if extended by Service Recipient pursuant to Section 2.12 , up to two years, after the Distribution Date.
“ Transition Service ” means each service specified in Part A of Schedule I hereto to be provided by IP to Spinco.
1.2 Interpretation . When a reference is made in this Agreement to a Section or Schedule, such reference shall be to a Section or Schedule of this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Unless the context requires otherwise, references to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof, and by this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless the context requires, “or,” “neither,” “nor,” “any,” and “either,” shall not be exclusive. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as the feminine and neuter genders of such terms. When a reference is made in this Agreement to “Service Provider” or “Service Recipient,” such reference shall be to the provider or recipient of either Transition Services or Reverse Transition Services as the context requires with reference to the particular Transition Service or Reverse Transition Service at issue. Notwithstanding that each of IP and Spinco, and their respective Affiliates, may act under this Agreement in the capacity of both a Service Provider and a Service Recipient, the rights, duties, obligations or liabilities of a Service Provider or Service Recipient set forth in this Agreement shall be limited as the context requires to the rights, duties, obligations or liabilities of the Party acting in the capacity of Service Provider or Service Recipient with reference to the particular Services, rights, duties, obligations or liabilities at issue. For purposes of this Agreement, the obligation of a Party to use its “reasonable best efforts” to achieve a particular result may require such Party to expend resources, incur costs or expenses, or pay amounts, in
 
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each case to the extent such expenditures, costs, expenses or payments, together with all other actions to be taken by such Party in pursuit of such result, would constitute the exercise of such Party’s “reasonable best efforts”.
 
2.	TERM AND PROVISION OF SERVICES	
2.1 Subject to Section 12 , the term of this Agreement shall be for the Transition Period. Subject to Section 12 , each Service shall be provided for the period of time following the Distribution that is indicated on the Schedules for such Service and each Additional Service, Omitted Service or Migration Service, if any, shall be provided for the period of time as specified in a supplemental written schedule (i) mutually agreed upon by the Parties acting reasonably and in good faith, in the case of Additional Services or Migration Services, or (ii) subject to prior confirmation in good faith by Service Provider acting reasonably, delivered by Service Recipient, in the case of Omitted Services (each such supplemental written schedule, a “ Supplemental Schedule ”) setting forth the terms of such Additional Service, Omitted Service or Migration Service to be provided (any such period of time with respect to a Service, an Additional Service, an Omitted Service or a Migration Service, including any extension period agreed to by the Parties pursuant to Section 2.12 , a “ Term ”); provided that in no event shall any Term exceed a period of time of one year or, if extended by Service Recipient pursuant to Section 2.12 , up to two years, after the Distribution Date.
2.2 During the Transition Period, but subject to Section 12 , the applicable Term and the provisions set forth in this Agreement, Service Provider shall provide to Service Recipient (or cause to be provided by its Affiliates or third parties to Service Recipient) each Service set forth on Schedule I hereto, which Schedule I shall also include the scope of such Service and fees associated with such Service. For the avoidance of doubt, any Supplemental Schedule shall be deemed to be part of Schedule I hereto.
2.3 Except as otherwise expressly provided in the Schedules, Service Provider shall provide each Service to Service Recipient (i) in at least substantially the same manner, scope and nature, at substantially the same level of professionalism, workmanship and quality, with substantially equal priority and substantially equal treatment as such Service was provided, or caused to be provided, by Service Provider or any of its Affiliates to the Spinco Business, in the case of a Transition Service, and to the IP Business, in the case of a Reverse Transition Service, during the Reference Period and (ii) in compliance with all applicable Laws; provided , that, in the case of clause (i) above, for the purposes of determining the manner, scope, nature, professionalism, workmanship, quality and priority of any Service during the Reference Period, appropriate and reasonable modifications in manner of delivery may be made for security, confidentiality, and data integrity so long as such modifications do not adversely affect the scope, nature, professionalism, workmanship, quality or priority to the Service Recipient of the Services delivered hereunder in any material respect.
2.4 Service Provider and Service Recipient shall, and shall cause their respective Affiliates to, comply with applicable privacy and data security Laws in the provision or receipt of Services.
 
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2.5 Service Recipient shall comply with all of Service Provider’s security policies, procedures and requirements relating to the Service Delivery Environment that have been, from time to time, previously provided in writing to Service Recipient (including those adopted after the date hereof to the extent so provided) in connection with its access and use of the Services (the “ Security Policies ”), and shall not tamper with, compromise or circumvent any security or audit measures employed by Service Provider.
2.6 Service Provider shall limit access to the Service Delivery Environment to Service Provider personnel who are specifically authorized to have such access, and shall take such measures to prevent unauthorized access, use, destruction, alteration or loss of Spinco Business data and other information contained therein as employed with respect to IP Business data. Service Recipient shall access and use only that portion of the Service Delivery Environment for which Service Recipient has been granted the right to access and use; provided, however, that Service Provider shall not unreasonably limit the grant of such access and use by authorized personnel. Neither Party shall establish any type of external network connectivity into the other Party’s systems or network, including WAN or Internet connectivity, without the prior written consent of the other Party. Service Recipient shall limit access of its personnel to the Service Delivery Environment to those personnel who are specifically authorized to have such access and shall cause such personnel to comply with the Security Policies in accessing the Service Delivery Environment in accordance with the terms of Section 2.5 .
2.7 If, at any time, a Party determines that (a) any of its personnel has sought to circumvent, or has circumvented, the Security Policies, (b) any unauthorized personnel of such Party has accessed the Service Delivery Environment, or (c) any of its personnel has engaged in activities that may reasonably be expected to lead to the unauthorized access, use, destruction, alteration or loss of data, information or software, such Party shall promptly terminate such personnel’s access to the Service Delivery Environment and promptly notify the other Party in writing. In addition, Service Provider shall have the right to deny personnel of Service Recipient access to the Service Delivery Environment upon at least 24 hours’ written notice to Service Recipient in the event that Service Provider reasonably believes that such personnel have engaged in any of the activities set forth in this Section 2.7 or otherwise pose a security concern. Each Party will reasonably cooperate with the other Party in investigating any apparent unauthorized access to or use of the Service Delivery Environment.
2.8 The Parties acknowledge that, subject to Section 2.3 , the manner, means, and resources to provide the Services are in the reasonable discretion of Service Provider; provided that Service Provider shall in good faith discuss and consider any reasonable suggestions of Service Recipient with respect to the foregoing that are consistent with the terms of this Agreement.
2.9 If any services (other than Excluded Services) that either (i) were previously provided to or for the benefit of either Party or their respective Subsidiaries, or caused to be provided to or for the benefit of either Party or their respective Subsidiaries, in each case by the other Party or its Subsidiaries, or (ii) are not of the type described in clause (i) but that Spinco reasonably believes are necessary for Spinco to operate the Spinco Business as currently conducted, have been omitted from Schedule I hereto (“ Omitted Services ”), then at the request of Service Recipient (in the case of clause (i), made within one year after the Distribution Date, and
 
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in the case of clause (ii), made within six months after the Distribution Date), (A) in the case of services pursuant to the foregoing clause (i), Service Provider shall provide such services, or cause such services to be provided, as promptly as reasonably practicable, pursuant to a Supplemental Schedule and (B) in the case of services pursuant to the foregoing clause (ii), so long as (x) Service Provider has the capability and existing capacity to provide such services, (y) Service Provider has provided such services to any of its other businesses within six months prior to the date of such request and (z) Service Recipient is unable to secure such services from a third party on commercially reasonable terms, Service Provider shall use its reasonable best efforts to provide such services, or cause such services to be provided, as promptly as reasonably practicable, pursuant to a Supplemental Schedule; provided , in each case, that the obligations of Service Provider to provide any Omitted Services shall be subject to Service Recipient’s use of its reasonable best efforts to cooperate with Service Provider in the provision of such services, and to the extent that changes to the systems, operations or business of Service Recipient implemented in connection with the transactions contemplated by the Contribution and Distribution Agreement or Merger Agreement or after the Distribution Date require alterations in the means of providing any such service, Service Provider shall be obligated only to use its reasonable best efforts to make such alterations. Service Recipient shall use its reasonable best efforts to cooperate with Service Provider in the provision of such services. Any Omitted Service that is provided or caused to be provided by Service Provider pursuant to this Section 2.9 shall be a “Transition Service” or a “Reverse Transition Service”, as applicable, for the purposes of this Agreement (other than as specifically indicated herein).
2.10 Subject to the service level requirements set forth in Section 2.3 , Service Provider may use third parties to provide some or all of the Services. Service Provider agrees that, to the extent such third-party Services are provided to Service Recipient pursuant to contracts between Service Provider and the third-party service provider, Service Provider will (i) to the extent such contracts allow Service Provider to take such actions for the benefit of Service Recipient (after the use by Service Provider of its reasonable best efforts to obtain consent to do so, if applicable), pass-through or grant to Service Recipient any license to Intellectual Property granted to Service Provider to the extent such license is necessary for Service Recipient to receive or utilize the Services; and (ii) enforce its rights and remedies, including indemnification obligations and obligations of the third-party service provider to comply with specified service levels and warranties, against any such third parties relating to the Services to the extent it would otherwise enforce such rights and remedies on behalf of itself or any of its Affiliates under similar circumstances relating to similar matters. Any reasonable and out-of-pocket costs incurred by Service Provider in pursuing remedies on Service Recipient’s behalf and at Service Recipient’s direction and request, to the extent associated with a failure to provide Services hereunder, shall be invoiced to Service Recipient as Service Fees. Unless specifically agreed in writing by the Parties, Service Recipient will be responsible for incremental costs incurred and associated with third-party contracts initiated during the Transition Period by Service Provider, subject to Section 3.3 ; provided , that Service Provider shall use its reasonable best efforts to minimize such incremental costs. Service Provider will consult with and obtain the prior written consent of (such consent to be provided within five (5) Business Days and not to be unreasonably withheld) Service Recipient prior to retaining any third party to provide Services where such third party (a) is not also providing substantially similar services to Service Provider for Service Provider’s business, or (b) did not provide the Services (or substantially similar
 
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services) to the Spinco Business, in the case of Transition Services, or to the IP Business, in the case of Reverse Transition Services, as applicable, prior to Distribution. Notwithstanding any such use of third parties, Service Provider shall remain fully obligated for the provision of such Services to the Service Recipient in accordance with the terms hereof; provided , however , if (i) Service Provider elects to use a third-party service provider for all or substantially all of its and its Subsidiaries’ requirements and/or needs and (ii) Service Provider is able to assign, and has assigned, to Service Recipient, Service Provider’s rights and remedies against such third-party service provider, such that Service Recipient may pursue such rights and remedies directly, Service Provider shall have no liability to Service Recipient in connection with a failure to perform by such third party that is not caused by the action or inaction of Service Provider.
2.11 In the event that Service Recipient requires any additional services (excluding any Excluded Services and other than Omitted Services or Migration Services, which shall be governed by Sections 2.9 and 5.2 , respectively) (“ Additional Services ”), Service Recipient may submit a written request describing such services to Service Provider’s Project Manager, and the Project Managers of each of Service Recipient and Service Provider shall meet to discuss such request. Service Provider shall act reasonably and in good faith in determining whether to provide such additional services. Any Additional Service that is provided or caused to be provided by Service Provider pursuant to this Section 2.11 shall be a “Transition Service” of “Reverse Transition Service”, as applicable, for the purposes of this Agreement (other than as specifically indicated herein).
2.12 In the event that any Service is required beyond its Term, Service Recipient shall provide Service Provider with a written notice of extension no later than forty-five (45) days prior to the expiration of the Term of such Service. Such notice shall indicate the period during which Service Recipient wishes to receive such Service after the date of expiration of the Term for such Service; provided that such period shall not extend beyond the date which is two years from the Distribution Date. Subject to obtaining any necessary third-party consents, Service Provider shall provide, or cause to be provided, the Service to Service Recipient for such period, it being understood and agreed that the fees for each applicable Service shall be increased by (i) 10% during the First Extension Period and (ii) 20% during the Second Extension Period. Service Recipient will reimburse Service Provider for any reasonable and documented incremental fees charged by third-party service providers in connection with granting any consent or otherwise extending the Service, in each case, solely with respect to an extension beyond the Term.
2.13 Service Provider shall not be required to provide a Service to the extent the provision of such Service by Service Provider materially conflicts with any contract or agreement to which Service Provider is a party prior to the date hereof or the rights of any third party with respect thereto or violates any applicable Law. The Service Provider shall use reasonable best efforts to obtain any consents from third-parties that Service Provider reasonably believes are necessary in order for Service Provider to provide the Services. In the event that Service Provider is unable to obtain any such consent, the Parties shall work together to agree upon, and Service Provider shall use its reasonable best efforts (and Service Recipient will cooperate with Service Provider) to implement, a commercially reasonable alternative arrangement.
 
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2.14 Notwithstanding anything to the contrary that may be set forth or implied elsewhere in this Agreement or in the Contribution and Distribution Agreement, Service Provider shall not, and shall be under no obligation to, provide any Excluded Services after the Distribution Date.
2.15 Unless otherwise provided for in this Agreement, the Parties shall use their reasonable best efforts to cooperate with each other in all matters relating to the provision and receipt of the Transition Services and the Reverse Transition Services. Such cooperation shall include exchanging information, providing electronic access to systems used in connection with the Transition Services and Reverse Transition Services and obtaining all consents, licenses, sublicenses or approvals necessary (including the payment of any reasonable fees or expenses) to permit each Party to perform its obligations hereunder, in each case, subject to the restrictions of Section 11 . Each Party shall cooperate with the other Party in determining the extent to which any Tax is due and owing with respect to any of the Transition Services or Reverse Transition Services, as applicable, and in providing and making available appropriate documentation or information reasonably requested by the other Party including, but not limited to, applicable resale and/or exemption certificates.
 
3.	PRICING, BILLING AND PAYMENT	
3.1 With respect to each Service, Service Recipient shall pay to Service Provider those amounts determined in accordance with the rates and charges, including any set-up or one-time costs, set forth in the Schedule for such Service, and in addition, Service Recipient shall pay Service Provider all reasonable incidental costs and expenses reasonably incurred by Service Provider in providing the Services, including air fare (coach class), lodging, meals, mileage, parking and ground transportation, in each case in accordance with Service Provider’s standard policies with respect to such incidental costs and expenses (collectively, the “ Service Fees ”). Service Fees for Migration Services shall be at the rate of $200 per hour, plus all reasonable incidental costs and expenses reasonably incurred by Service Provider in providing the Migration Services.
3.2 Service Fees (if any) for Omitted Services and Additional Services shall be developed in good faith by the Parties pursuant to the following guidelines:
(a) with respect to internal resources of Service Provider or its Affiliates used in delivering the Service, together with any third-party products or services used or consumed in the ordinary course of delivering the Service that are not pass-through costs or reimbursable expenses, Service Fees shall be based on a good faith allocation of Service Provider’s centralized costs associated with the Service consistent with Service Provider’s recent historical practices over the Reference Period for allocating such costs among its lines of business, plus all reasonable incidental costs and expenses reasonably incurred by Service Provider in providing the Services; and
(b) with respect to any Services provided by third-party service providers, Service Fees shall be based on the reasonable and documented actual cost paid by Service Provider to the third-party service provider for the products or services furnished by the third-party service provider for the benefit of Service Recipient, plus all reasonable incidental costs and expenses reasonably incurred by Service Provider in providing the Services.
 
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3.3 In the event that any Service is terminated by Service Recipient in accordance with Section 12.3 , the Service Fees shall automatically be adjusted downward (by the associated fee for such Service set forth on the respective Schedule from and after the first day of the month following termination of such Service). To the extent that such Service is provided to Service Provider by a third-party service provider, Service Provider may at any time increase the charges for any Service upon written notice to Service Recipient provided such increase is only to the extent of the amount of increase charged by such third-party service provider.
3.4 Not later than twenty-one (21) days after the last day of each calendar month, Service Provider shall provide to Service Recipient an itemized invoice for the preceding month’s Service Fees. The amount stated in such invoice (to the extent such amount is not the subject of a good faith dispute in accordance with the terms set forth in Section 3.10 ) shall be paid by Service Recipient in full within thirty (30) days of the date of Service Recipient’s receipt of the invoice (or the next Business Day following such date, if such thirtieth (30th) day is not a Business Day) through payment to an account designated by Service Provider. To protect confidential or competitively sensitive information, Service Provider may aggregate the Service Fees with respect to some or all of the Services included in such invoice; provided , that Service Provider shall, and shall cause its Affiliates to, cooperate and provide such information as reasonably requested by Service Recipient and provide such back-up therefor as reasonably requested by Service Recipient in connection therewith to the extent reasonably required to permit Service Recipient and its Representatives to review and evaluate the amounts set forth in such invoice and verify such amounts. If any such review reveals any overpayment by Service Recipient, Service Provider shall promptly refund the amount of such overpayment to Service Recipient (including any interest accrued daily on such overpayment at an annual interest rate equal to 6% and reimburse, to the extent any such review reveals an overpayment of 10% or more, Service Recipient for its reasonable and documented out-of-pocket costs and expenses incurred in connection with such review. Any dispute regarding overpayment shall be resolved by engaging KPMG LLP to arbitrate and resolve such dispute, which shall be resolved in accordance with the processes and procedures set forth in Section 5.2(c) of the Contribution and Distribution Agreement. If KPMG LLP is unable or unwilling to act as arbitrator, a nationally recognized accounting firm shall be selected by lot from among the remaining nationally recognized firms which are not the regular independent auditor firm of IP or the Spinco, and in such event references herein to KPMG LLP shall be deemed to refer to such replacement accounting firm.
3.5 Without prejudice to Service Provider’s other rights and remedies, in the event any sum due (other than those subject to dispute in good faith) to Service Provider pursuant to the terms of this Agreement remains unpaid ten (10) Business Days after the applicable due date, interest shall accrue daily, from the due date until the date of actual payment, at an annual interest rate equal to 6%.
3.6 The cost of each Service is a monthly cost, and the full monthly cost of each Service (applying the volume level, if applicable, of such Service at the beginning of a Service Provider Fiscal Month) shall apply in respect of such Service until such Service is terminated in its entirety as provided in Section 12.3 .
 
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3.7 All payments due to Service Provider pursuant to the terms of this Agreement shall be exclusive of any sales, service, value-added or other similar Tax or levy imposed upon the Transition Services or Reverse Transition Services, as applicable, provided pursuant to this Agreement (“ Sales and Service Taxes ”), which shall be payable by Service Recipient unless (for the avoidance of doubt) the applicable Law provides that the relevant Sales and Service Taxes are levied directly on the Service Provider; in such case the Service Provider will pay the relevant Sales and Service Tax directly to the Taxing authority in accordance with applicable Law and Service Recipient shall reimburse Service Provider for such relevant Sales and Services Taxes. In connection with the Transition Services or Reverse Transition Services, as applicable, provided pursuant to this Agreement, each Party shall be responsible for, and shall withhold or pay or both (or cause to be withheld or paid or both), as may be required by Law, all Taxes pertaining to the employment of its personnel, agents, servants or designees. Each of Service Provider and Service Recipient shall pay and be responsible for their own Taxes based on their own income or profits or assets.
3.8 Payments for Services or other amounts due under this Agreement shall be made net of withholding Taxes; provided , however , that if Service Provider reasonably believes that a reduced rate of withholding Tax applies or Service Provider is exempt from withholding Tax, Service Provider shall provide Service Recipient with appropriate and customary documentation to Service Recipient that Service Provider qualifies for a reduction to or exemption from withholding under applicable Law.
3.9 With respect to any Service Fees that accrue or are incurred by Service Provider or its Affiliates during the Transition Period but that are not billed by Service Provider in a monthly invoice, or of which Service Provider does not become aware until after the Transition Period, Service Provider shall set forth such fees in an invoice or invoices submitted to Service Recipient following the end of the Transition Period (each, a “ Post-Term Invoice ”). Subject to Section 3.10 , and so long as such Post-Term Invoice is received by Service Recipient as promptly as practicable and in any event within one (1) year following the Transition Period, Service Recipient shall remit payment under any such Post-Term Invoice to Service Provider within thirty (30) days after its receipt of such invoice.
3.10 In connection with Section 3.3 or 3.9 , in the event of an invoice dispute of which Service Recipient is aware, Service Recipient shall deliver a written statement to Service Provider no later than ten (10) days prior to the date payment is due on the disputed invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not in dispute amongst the Parties shall be deemed accepted and shall be paid, notwithstanding disputes on other items, within the period set forth in Section 3.3 or 3.9 , as applicable. The Parties shall use their reasonable best efforts to resolve all such other disputes expeditiously and in good faith with Service Provider continuing to perform the Services in accordance with this Agreement pending resolution of any dispute. When the disputed amount has been resolved, either by mutual agreement of the Parties or in accordance with the processes and procedures set forth in Section 5.2(c) of the Contribution and Distribution Agreement, any Party owing an amount to another Party as a result of such resolution shall pay such amount
 
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owed to such other Party within ten (10) Business Days following such resolution. This Section 3.10 (including any resolution of a dispute in accordance with this Section 3.10 ) shall not relieve Service Provider of its obligations to perform the Services.
3.11 Each of the Parties hereby acknowledges that it shall have no right under this Agreement to offset any amounts owed (or to become due or owing) to the other Party, whether under this Agreement, the Contribution and Distribution Agreement, the Merger Agreement or otherwise, against any other amount owed (or to become due or owing) to it by the other Party.
 
4.	ACCESS	
The Service Provider and Service Recipient shall, and shall cause their respective Affiliates to, provide to each other and their respective agents and vendors reasonable access (during normal business hours (when appropriate with respect to physical access), upon reasonable notice and supervised by the appropriate personnel of the Parties or as otherwise agreed by the Parties) to the information, personnel, and systems necessary for the efficient and accurate administration, provision, receipt or use of each of the Services and to avoid the duplication of any expenses or benefits thereunder; provided that all such information shall be shared subject to the confidentiality obligations set forth in Section 11 , and any Party or third-party vendor receiving such information shall agree to be bound by such obligations prior to the provision of any such information. All Services provided will be based upon reasonably timely, accurate and complete information from Service Recipient, which Service Recipient shall use its reasonable best efforts to provide, and Service Provider shall be released from its obligations to provide or cause to be provided reasonably timely, accurate and complete Services to the extent (but only to the extent) Service Recipient fails to provide timely, accurate and complete information to Service Provider reasonably necessary for the provision of such Services. Service Recipient’s failure to perform or delay in performing any of its obligations hereunder will not constitute grounds for termination by Service Provider of this Agreement except as provided in Section 12.2 ; provided , however , that Service Provider’s nonperformance of its obligations under this Agreement shall be excused if and to the extent (i) such Service Provider’s nonperformance results from Service Recipient’s failure to perform its obligations hereunder and (ii) Service Provider provides Service Recipient with written notice of such nonperformance.
 
5.	TRANSITION	
5.1 The Parties acknowledge and agree that the Services to be provided hereunder are transitional in nature and are intended to provide Service Recipient with reasonable time to develop the internal resources and capacities (or to arrange for third-party providers) to provide such Services. No later than 90 days after the Distribution Date, the Parties shall consult for the purpose of agreeing upon the terms of and a plan for the Migration of all Services. Service Recipient will have the primary responsibility for planning and carrying out the Migration of Services prior to the expiration of the Transition Period. Subject to Section 5.2 below and the other terms of this Agreement, Service Provider will provide reasonable cooperation and assistance as requested to support the Service Recipient’s Migration efforts.
5.2 To the extent that Service Recipient requires reasonable support, assistance and other services to effect an orderly Migration without interruption to the Services subject to the
 
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Migration (“ Migration Services ”), Service Recipient shall submit a written request describing such Migration Services to Service Provider’s Project Manager, and upon at least ten (10) days’ written notice to Service Provider, the Parties shall meet to discuss and agree, each Party acting reasonably and in good faith, on the scope of such Migration Services. Service Provider will then provide such Migration Services and assistance on the timing schedule that is reasonably and mutually established by the Parties in good faith; provided that the Parties’ intent is that Migration Services shall include only such services that Service Provider is capable of providing. Service Provider agrees to cooperate with and assist Service Recipient with training of its personnel, including making its personnel and facilities available to train an agreed number of Service Recipient’s personnel in connection with the Migration during the Transition Period to permit Service Recipient to provide the Services for itself after the Transition Period. For any Migration Services, Service Recipient will pay to Service Provider the rate set forth in Section 3.1 . Any Migration Service that is provided or caused to be provided by Service Provider pursuant to this Section 5.2 shall be a “Transition Service” or a “Reverse Transition Service”, as applicable, for the purposes of this Agreement (other than as specifically indicated herein).
 
6.	INDEMNITY	
6.1 Service Provider shall indemnify Service Recipient and its Affiliates and its and their respective officers, directors, employees, partners, managers or persons acting in a similar capacity, agents, consultants, financial and other advisors, accountants, attorneys and other representatives (the “ Service Recipient Indemnitees ”) in respect of, and hold such Service Recipient Indemnitees harmless from and against, any and all Losses incurred or suffered by Service Recipient Indemnitees in connection with the receipt of the Services to the extent that such Losses result from (i) the gross negligence or willful misconduct of Service Provider, any of its Affiliates or any of its or their respective officers, directors or employees, (ii) the violation of any applicable Law by Service Provider with respect to this Agreement or (iii) Service Provider’s breach of this Agreement; provided , that, notwithstanding anything in this Agreement to the contrary (including the definition of Losses), Service Recipient Indemnitees shall be entitled to indemnification hereunder if, and only to the extent, such negligence, misconduct, violation or breach remains uncured after a twenty (20) calendar day period (a “ Notice Period ”) following receipt by Service Provider of written notice from the applicable Service Recipient Indemnitee or Service Recipient Indemnitees describing such negligence, misconduct, violation or breach in reasonable detail.
6.2 The Service Recipient shall indemnify Service Provider and its Affiliates and its and their respective officers, directors, employees, partners, managers or persons acting in a similar capacity, agents, consultants, financial and other advisors, accountants, attorneys and other representatives (the “ Service Provider Indemnitees ”) in respect of, and hold Service Provider Indemnitees harmless from and against, any and all Losses incurred or suffered by Service Provider Indemnitees in connection with the provision of the Services to the extent that such Losses result from (i) the gross negligence or willful misconduct of Service Recipient, any of its Affiliates or any of its or their respective officers, directors or employees, (ii) the violation of any applicable Law by Service Recipient with respect to this Agreement or such Services or (iii) Service Recipient’s breach of this Agreement; provided , that, notwithstanding anything in this Agreement to the contrary (including the definition of Losses), Service Provider Indemnitees shall be entitled to indemnification hereunder if, and only to the extent, such negligence,
 
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misconduct, violation or breach remains uncured after a Notice Period following receipt by Service Recipient of written notice from the applicable Service Provider Indemnitee or Service Provider Indemnitees describing such negligence, misconduct, violation or breach in reasonable detail.
6.3 Each of the Parties agrees to use its reasonable best efforts to mitigate its respective Losses upon and after becoming aware of any event or condition that would reasonably be expected to give rise to any Losses that are indemnifiable hereunder.
6.4 The procedures specified in Article VI of the Contribution and Distribution Agreement shall apply with respect to any indemnification claims under this Section 6 .
 
7.	LIMITED WARRANTY; LIMITATION ON DAMAGES	
NOTWITHSTANDING ANY PROVISION TO THE CONTRARY, UNLESS EXPRESSLY SET FORTH HEREIN, THE SERVICE PROVIDER REPRESENTS AND WARRANTS ONLY THAT THE SERVICES SHALL BE IN CONFORMITY WITH THIS AGREEMENT (INCLUDING SECTION 2.3). THE ABOVE-STATED LIMITED WARRANTY IS THE SERVICE PROVIDER’S SOLE AND EXCLUSIVE WARRANTY WITH RESPECT TO ANY SERVICES PROVIDED UNDER THIS AGREEMENT. THE SERVICE PROVIDER DOES NOT MAKE ANY OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY AND SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES, WHETHER OF MERCHANTABILITY, SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE FOR SUCH SERVICES; PROVIDED THAT THIS SECTION 7 SHALL NOT LIMIT, ALTER OR OTHERWISE CHANGE THE RIGHTS AND OBLIGATIONS OF THE PARTIES PURSUANT TO ANY OTHER TRANSACTION AGREEMENT, INCLUDING THE CONTRIBUTION AND DISTRIBUTION AGREEMENT. ANY REPRESENTATION OR WARRANTY IN RESPECT OF ANY SUCH SERVICE SHALL BE INCLUDED IN THE WRITTEN AGREEMENT SETTING FORTH THE TERMS OF SUCH SERVICE.
IN NO EVENT SHALL ANY PARTY OR SUCH PARTY’S AFFILIATES, OR ANY OF ITS OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES, BE LIABLE FOR SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL OR INDIRECT DAMAGES, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY, OTHER LAW OR OTHERWISE, EXCEPT, IN THE CASE OF SPECIAL, CONSEQUENTIAL OR INDIRECT DAMAGES, TO THE EXTENT REASONABLY FORESEEABLE AND ARISING AS A RESULT OF SUCH PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AND IN ALL CASES EXCEPT TO THE EXTENT PAYABLE TO A THIRD PARTY. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE LIABILITY OF SERVICE PROVIDER WITH RESPECT TO SERVICES PROVIDED PURSUANT TO THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED THE FEES RECEIVED BY SERVICE PROVIDER PURSUANT TO THIS AGREEMENT, EXCEPT FOR DAMAGES ARISING AS A RESULT OF SUCH PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
 
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8.	OBLIGATION TO PROVIDE SERVICES	
The Parties acknowledge that notwithstanding any delegation of their respective responsibilities under this Agreement to a third party, except as provided in the proviso in Section 2.10 , such delegating Party shall remain responsible for the provision of the Services which such Party is obligated to provide and any third-party’s compliance with the performance and standard of performance set forth herein.
 
9.	FORCE MAJEURE	
9.1 Service Provider shall not be responsible for failure or delay in delivery of any Service that it has responsibility for providing hereunder, if and to the extent caused by an act of God or public enemy, war, government acts, regulations or orders, fire, flood, embargo, quarantine, epidemic, labor stoppages or disruptions, unusually severe weather or other similar cause beyond the control of Service Provider (a “ Force Majeure Event ”), provided that Service Provider shall have, promptly after knowledge of the beginning of a Force Majeure Event, notified Service Recipient of such a Force Majeure Event, the reason therefor, and the estimated probable duration and consequence thereof. The Parties acknowledge and agree that such estimation shall not be considered binding in any way, and Service Provider shall not incur liability of any kind if such estimation proves to be inaccurate. Service Provider shall use its reasonable best efforts to restore provision of the Services in accordance with this Agreement as soon as reasonably practicable following the commencement of a Force Majeure Event.
9.2 In the event that Service Provider is excused from supplying a Service pursuant to this Section 9 , Service Recipient shall be free to acquire replacement services from a third party at Service Recipient’s expense, and without liability to Service Provider, for the period and to the extent reasonably necessitated by such non-performance.
 
10.	INSURANCE	
Each Party shall, throughout the term of this Agreement, carry appropriate insurance with a reputable insurance company covering property damage, business interruptions and general liability insurance (including contractual liability) to protect its own business and property interests. To the extent either Party insures, in whole or in part, through a plan of self-insurance, the Parties acknowledge that such self-insurance shall be acceptable for purposes of this Agreement. In the case of any conflict between the terms of this Section 10 and the terms of the Contribution and Distribution Agreement, the Contribution and Distribution Agreement shall control.
 
11.	CONFIDENTIALITY OF INFORMATION	
Except as provided below, all data and information disclosed between Service Provider and Service Recipient pursuant to this Agreement, including information relating to or received from third parties and any Service Recipient Data, are deemed Confidential Information (as defined in the Contribution and Distribution Agreement, subject, for the avoidance of doubt, to the limitations set forth in such definition). A Party receiving Confidential Information (the “ Receiving Party ”) shall not use such information for any purpose other than for which it was
 
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disclosed by the party providing such information (the “ Providing Party ”) and, except as otherwise permitted by this Agreement, shall not disclose to third parties any Confidential Information for a period of five (5) years from the termination or expiration of this Agreement or, with respect to any trade secrets, indefinitely. The obligations of the Receiving Party and the Providing Party with regard to Confidential Information shall be governed by and set forth in Section 8.5 of the Contribution and Distribution Agreement, which shall be deemed incorporated by reference herein. In addition, nothing herein shall be deemed to limit or restrict a Party from disclosing any Confidential Information in any action or proceeding by such Party to enforce any rights which such Party may have against the other Party; provided, that such Party shall, to the extent reasonable and not prejudicial to such Party’s rights, cooperate with the other Party to protect the confidentiality of such Confidential Information, whether by means of a protective order, production under seal or otherwise.
 
12.	TERMINATION	
12.1 This is a master agreement and shall be construed as a separate and independent agreement for each and every Service provided under this Agreement. Any termination of this Agreement with respect to any Service shall not terminate this Agreement with respect to any other Service then being provided pursuant to this Agreement.
12.2 Upon thirty (30) days’ prior written notice, Service Provider may, at its option, terminate this Agreement with respect to any or all Services it provides hereunder or suspend performance of its obligations with respect thereto, in either case solely in the event of the failure of Service Recipient to pay any invoice within sixty (60) days of the receipt of such invoice, unless Service Recipient is disputing the invoice in good faith pursuant to Section 3.10 .
12.3 If at any time during the applicable Term, Service Recipient wishes to terminate a Transition Service or a Reverse Transition Service, as the case may be, Service Recipient shall provide a written request of termination to Service Provider at least thirty (30) days prior to the proposed effective date of termination. If Service Provider determines, in good faith, that the termination of such Service will, or is reasonably likely to, result in Service Provider’s inability to provide any remaining Services in accordance with this Agreement (taking into account any interdependencies of the proposed terminated Service and the remaining Services), including with respect to the quality standards, or result in a Party’s inability to maintain the confidentiality of data and information disclosed between Service Provider and Service Recipient pursuant to this Agreement, then Service Provider shall notify Service Recipient thereof in writing and the Parties shall negotiate in good faith to determine an alternative solution to enable Service Provider to maintain the ability to provide all other Services not subject to such written request of termination provided in the first sentence of this Section 12.3 ; provided that in the event the Parties fail to mutually agree upon an alternative solution, Service Recipient shall have the right, in its sole discretion, to cancel and withdraw all or part of such written request of termination and thereafter such cancelled request shall be of no further force or effect or if Service Recipient does not cancel or withdraw all or part of such request, then such Service shall be terminated effective as of the last day of the month following the thirty (30)-day notice period. Within thirty (30) days after the effective date of termination of the applicable Services and receipt of an invoice, Service Recipient shall pay all accrued, undisputed (any such dispute to be in good faith) and unpaid charges for such Services that are due and payable and set forth in such invoice. Service
 
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Recipient will reimburse Service Provider for incremental fees charged by third-party service providers in connection with the termination of Services; provided , that Service Provider will use its reasonable best efforts to minimize such incremental fees.
12.4 Upon termination or expiration of this Agreement for any reason, Service Provider shall, upon the written request of Service Recipient, deliver to Service Recipient or destroy (provided such destruction is promptly confirmed in writing by Service Provider if requested by Service Recipient), at Service Provider’s option, all data, records and other information provided to Service Provider by Service Recipient and pertaining to any matters for which Service Provider was providing Transition Services or Reverse Transition Services, as applicable, hereunder; provided , however , Service Provider may retain copies of such data, records and information to the extent necessary for accounting, tax reporting, compliance with Service Provider’s document retention policies or other legitimate business purposes, subject to the requirements of Section 11 hereof.
 
13.	RELATIONSHIP OF PARTIES	
In providing the Services, Service Provider is acting as and shall be considered an independent contractor. This Agreement is not intended to create and shall not be construed as creating between Service Provider and Service Recipient any relationship other than an independent contractor and purchaser of contract services. The Parties specifically acknowledge that they are not, and this Agreement is not intended to and shall not be construed to make them, affiliates of one another and that no principal and agent, joint venture, partnership or similar relationship, or any other relationship, that imposes or implies any fiduciary duty, including any duty of care or duty of loyalty exists between the Parties. Except as expressly set forth herein, no Party has the authority to, and each Party agrees that it shall not, directly or indirectly contract any obligations of any kind in the name of or chargeable against the other Party without such other Party’s prior written consent.
 
14.	PROJECT MANAGERS	
14.1 Service Provider and Service Recipient will each assign one person to act as that Party’s project manager (the “ Project Manager ”) for each area of service listed on Schedule III hereto (and other categories, as may be agreed by the Parties). The Project Managers will (a) represent and act for their respective Party for matters related to the applicable Service, and (b) meet and/or confer on a regular basis (at mutually agreed times and locations) to review the activities under this Agreement and to discuss the status and progress of such activities. All disputes or issues arising hereunder will be referred to the applicable Project Managers for resolution. In the event any such dispute or issue is not resolved in a timely manner, such matter will be referred to senior management representatives, with appropriate decision making authority for prompt resolution of the matter. If still not resolved, the issue will be escalated to Service Recipient’s lead representative and Service Provider’s lead representative for resolution. The names and contact information for each of Service Recipient’s and Service Provider’s lead representative with regard to an issue or dispute arising out of or relating to the Transition Services and Reverse Transition Services shall be set forth on Scheduled III hereto. Either Party may designate a different individual as its lead representative with respect to the Transition Services or the Reverse Transition Services at any time by delivering prior written notice to the
 
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other Party. The foregoing shall not in any way limit the rights of the Parties to pursue any other legal and equitable remedies available to them hereunder in the event of a breach of this Agreement. No Project Manager or lead representative for a Party shall have any authority to amend this Agreement.
14.2 Service Provider will promptly notify Service Recipient of any reassignments or changes in contact information of the Project Manager or other key personnel identified in the Schedules hereto.
14.3 The Parties agree to use good faith efforts to resolve any controversy or claim arising out of this Agreement, the interpretation of any of the provisions hereof, or the actions of the Parties hereunder. In the event of a breach of this Agreement, or a dispute as to the meaning of this Agreement or any of its terms which the Parties cannot resolve by themselves amicably, the following provisions shall apply (which provisions shall be in addition to, and not a limitation of, the Parties’ remedies under Section 6 , Section 20.6 or, to the extent referred to pursuant to the terms of this Agreement, the dispute resolution mechanisms available under Section 5.2(c) of the Contribution and Distribution Agreement):
(a) The Parties shall endeavor to resolve the dispute as contemplated in Section 14.1 .
(b) If within thirty (30) days after one Party notifies the other in writing of the existence of a dispute, either Party may, at its option, provide written notice of the intent to arbitrate. In the event the Party that is the recipient of such notice agrees to arbitrate, arbitration shall be according to the rules of the American Arbitration Association, except as herein modified by the Parties or otherwise as agreed to by the Parties. Within ten (10) days of the agreement of the Parties to arbitrate, each Party will select an arbitrator, and notify the other Party of its selection. Within fifteen (15) days after receipt of such notice, the respective arbitrators will select a third arbitrator. All such arbitrators shall have experience in the respective businesses of the Parties. A hearing by the arbitration panel must be held within thirty (30) days after the selection of a chairman and a majority decision of the panel and resolution must be reached within thirty (30) days of such hearing. Decisions of the panel must be in writing and will be final and binding upon the Parties, and judgment may be entered thereon by any court having jurisdiction.
(c) The arbitration proceedings will be held in New York, New York, unless the Parties agree to a different location. All negotiation and arbitration proceedings will be confidential and will be treated as compromise and settlement negotiations for purpose of all rules of evidence. Each Party shall bear its own cost of presenting its case, and one-half of the cost incurred by the arbitration panel, or any mediation or alternative dispute resolution procedure, as the case may be, unless the arbitration panel determines otherwise.
14.4 Nothing in this Section 14 shall supersede the notice/cure and termination rights of the Parties otherwise set forth in this Agreement. This Section 14 shall apply without prejudice to any Party’s right to seek equitable remedies or injunctive relief to which such Party may be entitled at any time.
 
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15.	RECORDS	
15.1 Service Provider shall retain, for a period of three (3) years following the Distribution Date, all books, records, files, databases or computer software or hardware (including current and archived copies of computer files) (the “ Materials ”) with respect to matters relating to the Services provided to Service Recipient hereunder that are in a form and contain a level of detail substantially consistent with the records maintained by Service Provider in providing similar services to the Spinco Business or the IP Business, as applicable, prior to the Distribution Date (unless any such Materials have been delivered to Service Recipient or Service Recipient otherwise other has a copy of such information). Each Party agrees to use its reasonable best efforts to provide the other Party with notice of material modifications to its record retention policies in a timely manner. As promptly as practicable following the expiration of the applicable duration (or earlier termination) of each Service, Service Provider will use its reasonable best efforts to furnish to Service Recipient in the form reasonably requested by Service Recipient, and assist in the transition of, the Materials belonging to Service Recipient and relating to such Service as clearly identified by Service Recipient. If at any time during the three (3) year period following the Distribution Date Service Recipient reasonably requests in writing that certain of such Materials be delivered to Service Recipient, Service Provider promptly shall arrange for the delivery of the requested Materials in a form reasonably requested by Service Recipient to a location specified by, and at the expense of, Service Recipient (unless any such Materials have been delivered to Service Recipient or Service Recipient otherwise other has a copy of such information).
15.2 The Service Recipient Data shall be and shall remain the property of Service Recipient and, to the extent reasonably practicable, shall be promptly provided to Service Recipient by Service Provider upon Service Recipient’s request. The Service Provider shall use Service Recipient Data solely to provide the Services to Service Recipient as set forth herein and for no other purpose whatsoever.
15.3 Notwithstanding anything herein to the contrary and subject to Section 11 , Service Provider may retain copies of the Materials and Service Recipient Data in accordance with policies and procedures implemented by Service Provider in order to comply with applicable Law, professional standards or reasonable business practice, including document retention policies as in effect from time to time and in accordance with past practices.
 
16.	INTELLECTUAL PROPERTY	
Unless otherwise specifically provided herein, this Agreement shall not transfer ownership of any Intellectual Property Assets from either Party to the other Party or to any third party. Ownership of any Intellectual Property Assets created by a Service Provider in connection with providing a Service to a Service Recipient under this Agreement shall be retained by such Service Provider, unless based on Service Recipient’s Confidential Information. If Service Provider creates any Intellectual Property in connection with providing a Service based on Service Recipient’s Confidential Information, then the creation of such Intellectual Property that is primarily related to or arising from the Spinco Business shall be considered a “work made for hire” under applicable Law and shall be owned by Service Recipient. If such creation is not considered a “work made for hire” under applicable Law, then Service Provider hereby
 
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irrevocably assigns, and shall assign, to Service Recipient, without further consideration, all of Service Provider’s worldwide right, title, and interest in and to such Intellectual Property. Solely to the extent required for the provision or receipt of the Services in accordance with this Agreement, each Party (the “ Licensor ”), for itself and on behalf of its Affiliates, hereby grants to the other (the “ Licensee ”) (and the Licensee’s Affiliates) a non-exclusive, revocable (solely as expressly provided in this Agreement), non-transferable (other than pursuant to Section 17), non-sublicensable (except to third parties as required for the provision or receipt of Services, but not for their own independent use), royalty-free, worldwide license during the term of this Agreement to use Intellectual Property of the Licensor in connection with this Agreement, but only to the extent and for the duration necessary for the Licensee to provide or receive the applicable Service under this Agreement. Subject to the rights and licenses granted to Licensee under any other agreement to which the Parties are party, upon the expiration of such term, or the earlier termination of such Service in accordance with this Agreement, the license to the relevant Intellectual Property will terminate and Licensee shall cease use of such Intellectual Property; provided , that all licenses granted hereunder shall terminate immediately upon the expiration or earlier termination of this Agreement in accordance with the terms hereof and upon such expiration or termination, Licensee shall cease use of the Intellectual Property licensed hereunder. The foregoing license is subject to any licenses granted by others with respect to Intellectual Property not owned by the Parties or their respective Affiliates.
 
17.	ASSIGNMENT AND DELEGATION	
This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assigns. Except as set forth in Section 2.10 , neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned or delegated, directly or indirectly, in whole or in part, including by operation of law, by any Party hereto without the prior written consent of the other Party hereto, which consent shall not be unreasonably withheld; provided , however , that either Party may assign this Agreement to any of its Affiliates without the consent of the other Party or delegate its rights or obligations hereunder, in whole or in part, to any of its Affiliates; provided , further , that Spinco may assign any or all of its rights or interests under this Agreement without the consent of IP (a) to any Person providing the Special Payment Financing pursuant to the terms thereof for purposes of creating a security interest herein or otherwise assign as collateral in respect of such Special Payment Financing or (b) to any purchaser of all or substantially all of the assets of such Person. No assignment by any Party shall relieve such Party of any of its obligations hereunder; provided that to the extent full performance or payment is made in full by an Affiliate or Affiliates of Service Provider or Service Recipient with respect to an obligation of Service Provider or Service Recipient, as applicable, hereunder, such obligation shall be in full satisfaction of such obligation of such Person hereunder.
 
18.	NOTICES	
The procedures specified in Section 10.2 (Notices) of the Contribution and Distribution Agreement shall apply with respect to all notices, requests, claims, demands and other communications under this Agreement.
 
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19.	SURVIVAL	
The Parties’ rights and obligations under Sections 3 , 6 , 7 , 8 , 11 and 14 through 20 shall survive expiration or termination of this Agreement.
 
20.	GENERAL PROVISIONS	
20.1 Severability . If any provision of this Agreement or the application of any such provision to any Person or circumstance shall be declared judicially to be invalid, unenforceable or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement, it being the intent and agreement of the Parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to render it valid, legal and enforceable while preserving its intent or, if such modification is not possible, by substituting therefor another provision that is valid, legal and enforceable and that achieves the original intent of the Parties.
20.2 Counterparts . This Agreement may be executed in one or more counterparts each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) shall be as effective as delivery of a manually executed counterpart of any such Agreement.
20.3 Entire Agreement . This Agreement and the Schedules hereto together with the other Transaction Agreements and any schedules and exhibits thereto, shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. In the case of any conflict between the terms of this Agreement and the terms of any other Transaction Agreement regarding the subject matter hereof, the terms of this Agreement shall control. In the case of any ambiguity between the terms and condition of the main body of this Agreement and a Schedule to this Agreement, or with respect to an Omitted Service or an Additional Service, the terms and conditions of the main body of this Agreement shall control.
20.4 Amendments; Waivers . This Agreement may not be amended except by an instrument in writing signed by both Parties. No failure or delay by either Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right hereunder. Any agreement on the part of either Party to any such waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party.
20.5 No Third Party Beneficiaries . Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person (other than IP, Spinco and UWWH and their respective successors and permitted assigns who are express intended third-party beneficiaries) any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, and, except with regard to and as provided in Section 6 , no Person shall be deemed a third party beneficiary under or by reason of this Agreement.
 
21

20.6 Specific Performance . Notwithstanding anything to the contrary contained herein or in any other Transaction Agreement, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party who is, or is to be, thereby aggrieved will have the right to specific performance and injunctive or other equitable relief in respect of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any Loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the Parties to this Agreement.
20.7 Waiver of Jury Trial . AS A SPECIFICALLY BARGAINED INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (WITH EACH PARTY HAVING HAD OPPORTUNITY TO CONSULT COUNSEL), EACH OF THE PARTIES EXPRESSLY AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING UNDER THIS AGREEMENT OR ANY ACTION OR PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OTHER TRANSACTION AGREEMENT, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR PROCEEDING, AND ANY ACTION OR PROCEEDING UNDER THIS AGREEMENT OR ANY ACTION OR PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OTHER TRANSACTION AGREEMENT SHALL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
20.8 Jurisdiction; Service of Process . ANY ACTION WITH RESPECT TO THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT OF THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS ARISING HEREUNDER BROUGHT BY THE OTHER PARTY OR PARTIES OR THEIR SUCCESSORS OR ASSIGNS, IN EACH CASE, SHALL BE BROUGHT AND DETERMINED EXCLUSIVELY IN THE DELAWARE COURT OF CHANCERY AND ANY STATE APPELLATE COURT THEREFROM WITHIN THE STATE OF DELAWARE (OR, IF THE DELAWARE COURT OF CHANCERY DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY STATE OR FEDERAL COURT WITHIN THE STATE OF DELAWARE). EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, COUNTERCLAIM OR OTHERWISE, IN ANY ACTION WITH RESPECT TO THIS AGREEMENT (I) ANY CLAIM THAT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE NAMED COURTS FOR ANY REASON OTHER THAN THE FAILURE TO SERVE IN ACCORDANCE WITH THIS SECTION 20.8, (II) ANY CLAIM THAT IT OR ITS PROPERTY IS EXEMPT OR IMMUNE FROM JURISDICTION OF ANY SUCH COURT OR FROM ANY LEGAL PROCESS COMMENCED IN SUCH COURTS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF JUDGMENT, EXECUTION OF JUDGMENT OR OTHERWISE) AND (III) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (A) THE ACTION IN SUCH COURT IS BROUGHT IN AN INCONVENIENT FORUM, (B) THE VENUE OF SUCH ACTION IS IMPROPER OR (C) THIS AGREEMENT, OR THE
 
22

SUBJECT MATTER HEREOF, MAY NOT BE ENFORCED IN OR BY SUCH COURTS. EACH OF THE PARTIES FURTHER AGREES THAT NO PARTY TO THIS AGREEMENT SHALL BE REQUIRED TO OBTAIN, FURNISH OR POST ANY BOND OR SIMILAR INSTRUMENT IN CONNECTION WITH OR AS A CONDITION TO OBTAINING ANY REMEDY REFERRED TO IN THIS SECTION 20.8 AND EACH PARTY WAIVES ANY OBJECTION TO THE IMPOSITION OF SUCH RELIEF OR ANY RIGHT IT MAY HAVE TO REQUIRE THE OBTAINING, FURNISHING OR POSTING OF ANY SUCH BOND OR SIMILAR INSTRUMENT. THE PARTIES HEREBY AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 20.8, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY OBJECTIONS TO SERVICE ACCOMPLISHED IN THE MANNER HEREIN PROVIDED.
20.9 Governing Law . This Agreement and all issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement (and all Schedules hereto) shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal Laws of the State of Delaware shall control the interpretation and construction of this Agreement (and all Schedules hereto), even though under that jurisdiction’s choice of law or conflict of law analysis, the substantive Law of some other jurisdiction would ordinarily apply.
20.10 Other Agreements . Nothing herein is intended to modify, limit or otherwise affect the representations, warranties, covenants, agreements and indemnifications contained in the other Transaction Agreements, and such representations, warranties, covenants, agreements and indemnifications shall remain in full force and effect in accordance with the terms of such agreements, as applicable.
[SIGNATURES ON THE FOLLOWING PAGE]
 
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IN WITNESS WHEREOF, the Parties have caused this Transition Services Agreement to be executed and delivered by their duly authorized representatives as of the date first above written.

INTERNATIONAL PAPER COMPANY	
		
By:	 	 	
	 	Name:	
	 	Title:	
	
VERITIV CORPORATION	
		
By:	 	 	
	 	Name:	
	 	Title:	
Transition Services Agreement - Signature Page

Schedule I - Part A –Transition Services – Services to be Provided by IP
 
1.	Service Fees for any cancelled Transition Service will no longer be charged in the period following Service cancellation. Service Fees will be charged by rounding up to whole billing units.	
 
2.	With respect to any Service that involves non-dedicated or ad-hoc access to Service Provider’s employees, such access shall be reasonable and so as not to unreasonably interfere with the ordinary course duties of such employees.	

 	  	Service Description	  	Term	  	Service Fee	  	Project Manager	
1.	  	Accounting - Accounts Receivable:
 
•      Charles Paquet will assist the integration of global collection and accounts receivable reporting processes into Service Recipient’s system; provided that , in no event shall the time he spends on providing such services exceed 50% of his daily work hours.	  	6 months from the Distribution Date.	  	$4,553.28 per month.	  	Service Provider: Ronald Borcky
 
Service Recipient: Sandhya Kukkillaya	
					
2.	  	NetOp/Network Optimization
 
•      This xpedx Network Operations Planning Tool (“NetOp”) is developed by IP Business Modeling and Optimization Services (“IP BMOS”). It does not include a completed capability to optimize and is only near the end of the pilot stage.
 
•      IP hereby assigns and transfers NetOp (including all Intellectual Property owned and transferrable by IP therein) to Spinco “as is” without any warranty or guarantee of any kind whatsoever.
 
•      IP BMOS will provide reasonable assistance in support, maintenance, training, bug-fixes and error-corrections, and installation during the Term specified herein.
 
•      IP BMOS will only provide the service via telephone, email or other electronic communication methods.
 
•      Service Recipient is responsible for supplying data to NetOp and running it.	  	12 months from the Distribution Date, not to exceed a total of 25 person-hours during such 12 months period.	  	$200/hour	  	Service Provider:
 
Sean MacDermant
 
Service Recipient:
 
Bob Pritchett	
 
1

									
 	  	Service Description	  	Term	  	Service Fee	  	Project Manager	
3.	  	IT – See IT Schedule	  	See IT Schedule.	  	See IT Schedule.	  	Service Provider:
 
David Kitkowski
 
Service Recipient:
 
Peg Scott	
					
4.	  	International Paper (Netherlands) B.V. (“IPNL”) –	  		  		  		
					
	  	•     Global Supply Chain Data Maintenance Services - Master Data Management and Process in SAP	  	6-12 months from the Distribution Date	  	$75/hour	  		
					
	  	•     IP’s Supply Chain Center of Excellence will support IP’s IT-GOMAS (“GOMAS”) in Order Management, Delivery or Source on as needed basis in connection with GOMAS’s services to IPNL under the TSA IT Schedule related to IPNL issues.	  	6-12 months from the Distribution Date	  	$60/hour	  		
					
	  	•     Cisco PL Project – Michal Wisniewski of International Paper Kwidzyn SP. Z O.O. continues to provide service for this project; provided that , in no event shall the time he spends on providing services to IPNL exceed 50% of his monthly work hours.	  	Michal Wisniewski:
 
From Distribution Date to Sept. 30, 2014	  	€1,226.73/month	  		
 
2

									
 	  	Service Description	  	Term	  	Service Fee	  	Project Manager	
5.	  	Temporary Employment Arrangements
 
•    Mr. David Cerveny who is on International Paper Czech Republic, s.r.o. (“IP Czech”) payroll and Mr. Simon Coe who is on International Paper (UK) Limited (“IP UK”) payroll (collectively, the “xpedx Employees”) are fully allocated to Spinco’s xpedx business. The parties hereto acknowledge and agree that pursuant to the Employment Matter Agreement dated January 28, 2014 (the “EMA”), they are Spinco Group Employees (as defined therein).
 
•    Pursuant to Section 2.1(a) of the EMA, IP Czech and IP UK will continue to keep Mr. Cerveny and Mr. Coe on their respective payroll during the term hereof and Spinco shall move them to its appropriate affiliate before the end of the term.
 
•    For the avoidance of doubt, Spinco agrees that if it fails to employ the xpedx Employees in its affiliate prior to the end of the term, IP UK and IP Czech shall have the right to terminate the employment of these xpedx Employees and Spinco shall reimburse IP UK and IP Czech for all the respective severance payments and other benefits that the xpedx Employees are entitled to and all reasonable cost and expenses associated with the termination of their employment.	  	 
 
12 months from the Distribution Date.	  	 
 
David Cerveny:
 
CZK1,718,171 per year or CZK143,181 per month
 
Simon Coe:

GBP121,387 per year or GBP10,116 per month	  		
					
6.	  	Import/ Export Trade Compliance:
 
•    International Paper trade compliance group remains available as a resource to continue the process of preparing Spinco compliance team to function independently.
 
•    It is anticipated this assistance will take the form of:
 
•    Phone calls or emails from a member of the Spinco compliance team, to gain additional historical perspective on the trade compliance process at xpedx/ International Paper.	  	 
 
6 months from the Distribution Date
 
It is expected this work shall be no more than 25 hours per month.	  	 
 
E RIN R ACCAH
 
B RIAN C OPE
 
K RISTIN B ROWN
 
D ONNA M C C ANN
.	  	 
 
Service Provider: Erin Raccah
 
Service Recipient: TBD	
 
3

									
  	  	Service Description	  	Term	  	Service Fee	  	Project Manager	
	  	•     In person meetings at a mutually agreeable time and location to gain additional historical perspective on the trade compliance process at xpedx/ International Paper.
 
•     If not completed, continuation of the transition tasks as discussed pre-closing on bi-monthly meetings.
 
•    This assistance will not be any of the following:
 
•     Harmonized Tariff Schedule classification
 
•     Preparing NAFTA certificates
 
•     Approving new foreign supplier and item set up review
 
•     Any other activity that would require a license under customs broker regulations	  		  	H OURLY RATE FOR EACH OF THE ABOVE SHALL BE A FULLY LOADED HOURLY RATE AS M UTUALLY AGREED	  		
 
4

Schedule I - Part B – Reverse Transition Services – Services to be Provided by Spinco
 
1.	Service Fees for any cancelled Reverse Transition Service will no longer be charged in the period following Service cancellation. Service Fees will be charged by rounding up to whole billing units.	
 
2.	With respect to any Service that involves non-dedicated or ad-hoc access to Service Provider’s employees, such access shall be reasonable and so as not to unreasonably interfere with the ordinary course duties of such employees.	
 
3.	For the purpose of this schedule, CTA means IP’s Container of the Americas business; IPG means IP’s Industrial Packaging business; CPB means IP’s Coated Paperboard business and P&CP means IP’s Printing Papers business.	

 	  	Service Description	  	Term	  	Service Fee	  	Project Manager	
1.	  	Third Party Warehousing Services : on the same terms and conditions as currently provided.
 
Regional Distribution Centers (“RDCs”) :
 
•    La Mirada, CA
 
•    Portland, OR
 
With regard to all export shipment to Canada from the RDCs, Canadian Customs Invoice required for such export shall be prepared by designated employees of IP (Service Recipient) and NOT by any employee of Spinco. The parties shall cooperate in good faith to ensure that all such export shipment be made on a timely basis.	  	RDCs: 12 months from the Distribution Date.	  	La Mirada, CA (IP owned facility) :
 
Handling fee will be the actual labor cost plus a 15% mark-up thereof. The labor cost consists of:
 
•    Warehouse: hourly cost and hourly benefits
 
•    Office: hourly cost and hourly benefits (office)
 
•    Salaried/management: cost and benefits
 
•    Overtime
 
•    Reimbursement of pass through operating supplies
 
Portland, OR :
 
•    Storage: $4.56/sqf
 
•    Handling: $30.19/hour
 
•    $10/hour for material handling equipment used
 
•    $10.50/roll for the IPG roll stock
 
•    Reimbursement of pass through operating supplies	  	 
 
Service Provider:
 
Robert Scully
 
Service Recipient:
 
Bill Travis for RDCs and Steve Abramowitz for DCs	
 
1

									
 	  	Service Description	  	Term	  	Service Fee	  	Project Manager	
	  	Distribution Centers (“DCs”) :
 
•    Columbia, MO
 
•    Denver, CO
 
•    Kansas City, KS
 
•    Lynchburg, VA
 
•    Omaha, NE
 
•    Syracuse, NY
 
•    Rochester, NY	  	 
DCs: 6 months from the Distribution Date	  	 
Columbia, MO : $9.05/bundle (including storage and handling)
 
Denver, CO :
 
•    Storage $3.44/ton
 
•    Handling $3.35/ton
 
Kansas City, KS (IP owned facility) :
 
•    Handling:
 
•    $4.14/bundle (CTA)
 
•    $2.40/ton (IPG)
 
•    $5.39/ton (CPB, P&CP)
 
Lynchburg, VA :
 
•    Storage $1.50/pallet
 
•    Handling $3.00/pallet
 
Omaha, NE (IP leased facility) :
 
•    Handling $3.85/bundle
 
Syracuse, NY :
 
•    Storage $3.32/ton
 
•    Handling $5.32/ton
 
Rochester, NY :
 
•    Storage $4.00/pallet
 
•    Handling $6.25/pallet
 
•    Crossdock: $3.25/pallet	  		
 
2

IT Transition Services Schedule – Services to be Provided by IP
Clarifications:
 
 	1.	Unless otherwise indicated with respect to a particular Service, the anticipated term of services is 12 months from the Closing Date.	
 
 	2.	With respect to any Service that involves non-dedicated or ad-hoc access to Service Provider’s employees, such access shall be reasonable and so as not to unreasonably interfere with the ordinary course duties of such employees.	
 
 	3.	Unless specified by a specific service, service fees for any cancelled Service will no longer be charged starting the month following service cancellation. Fees will be charged by rounding up to whole billing units.	
 
 	4.	WAN services cannot be cancelled prior to Facility Services cancellation.	
 
 	5.	Commercial software licensing will be transferred to the Acquiring Company where allowed by vendor agreement and agreed to by the Acquiring Company, and does not expose IP usage not related to xpedx. IP will use reasonable best efforts to assign/transfer.	
 
 	6.	Each individual service component listed under the broader categories under “Service Description” is treated as a separate Transition Service for purposes of Section 12.3.	

 	  	Service Description	  	Term	  	Service Fee	  	Project Manager	
1.	  	Enterprise Data Center Services
 
Provide data center facilities, infrastructure and services for enterprise applications used by the Acquired Companies, and for Acquired Companies applications and servers hosted in Service Provider data centers.	  	12 months from the Distribution Date.	  	$552,179
 
Per month.	  	Service Provider: David Kitkowski
 
Service Recipient: Rick Vando	
					
2.	  	WAN Sevices
 
Provide a centrally managed, private data network supporting connectivity between the Service Provider’s data centers and each Acquired Company site connected at Closing.	  	12 months from the Distribution Date.	  	$214,647
 
Per month	  	Service Provider: David Kitkowski
 
Service Recipient: Rick Vando	
					
3.	  	Remote Access
 
Provide the infrastructure and services for secure external (off network) access via the internet gateways to the Service Provider’s network (and, through it, to Service Provider and Acquired Company applications and network services), including the following:
 
•      VPN access for employees who are set up to access Service Provider or Service Recipient applications via the internet	  	12 months from the Distribution Date.	  	$32,484
 
Per month	  	Service Provider: David Kitkowski
 
Service Recipient: Rick Vando	
					
	  	•      Restricted access through secure internet connections to selected 3rd party suppliers, business partners, etc.	  		  		  		
 
1

									
 	  	Service Description	  	Term	  	Service Fee	  	Project Manager	
4.	  	Facility Support
 
Provide remote support for Local Area Networks, Servers, Domain Management, Active Directory, Help Desk, Backup and Security Services, Intranet Access, Internet Access & Content Filtering, Network Printers	  	12 months from the Distribution Date.	  	$613,373
 
Per month	  	Service Provider: David Kitkowski
 
Service Recipient: Rick Vando	
					
5.	  	Messaging
 
Provide email forwarding from xyz@ipaper.com accounts to the Veritiv equivalents for up to 120 days from Service Commencement Date. During that time, employees will have access to information stored in their IP email accounts and Service Provider will provide technical support for such access.	  	12 months from the Distribution Date.	  	$2,604
 
Per month	  	Service Provider: David Kitkowski
 
Service Recipient: Rick Vando	
					
6.	  	Internet
 
Provide the infrastructure and services for the Acquired Company’s internet access.	  	12 months from the Distribution Date.	  	$141,560
 
Per month	  	Service Provider: David Kitkowski
 
Service Recipient: Rick Vando	
					
7.	  	Document Management
 
Provide infrastructure and services to support document storage and retrieval.	  	12 months from the Distribution Date.	  	$21,419
 
Per month	  	Service Provider: David Kitkowski
 
Service Recipient: Rick Vando	
 
2

									
 	  	Service Description	  	Term	  	Service Fee	  	Project Manager	
8.	  	Telecom Services
 
Provide the infrastructure and services for Acquired Company voice communications, including the following: Enterprise voice (local and long distance calling), International calling, PBX System and Support, 1-800 numbers, Conference calling	  	12 months from the Distribution Date.	  	$355,319*	  	Service Provider: David Kitkowski Service Recipient: Rick Vando	
					
9.	  	Business IT
 
Contracts and services not transferred to the Acquiring Company related to AS400 services, application support and software maintenance for business applications	  	12 months from the Distribution Date.	  	$1,333,333**	  	Service Provider: David Kitkowski
Service Recipient: Rick Vando	
					
10.	  	On-site Support
 
On-site break/fix support services and on-site service requests will be billed at actual hours including travel time. Travel expenses for on-site services requiring air travel and/or overnight lodging will be agreed to in advance of travel. These expenses will be consistent with the IP travel policy and billed at actual.	  	12 months from the Distribution Date.	  	$75 per hour	  	Service Provider: David Kitkowski
Service Recipient: Rick Vando	
					
11.	  	Migration Services/Cutover Services
 
1.      Services related to migration planning, preparation or transition cutover will be billed at actual hours including travel time. Any travel requiring overnight lodging or air travel will be agreed to in advance of travel. These expenses will be consistent with the Service Provider’s travel policy and billed at actual.
 
2.       Any third party costs incurred by Service Provider for the purpose of planning, preparation or transition cutover will be billed at actual.	  	12 months from the Distribution Date	  	$200 per hour	  	Service Provider: David Kitkowski
Service Recipient: Rick Vando	
 
*	Telecom Services – these costs are pass thru and will be billed as received from the vendor with the exception of IPT phone system services which will be supplied by IP.	
**	Business IT – these costs are pass thru and will be billed as received from the vendor.	
IT Services exclude the following:
 
 	1.	Systems (applications, devices, servers, storage, telephones, etc.) which are supported immediately prior to the Distribution by employees of Service Provider who are employed in the business.	
 
 	2.	Disaster Recovery services for applications, devices, servers, etc. which are not in place or available immediately prior to the Distribution.	
 
 	3.	System (applications, devices, servers, storage, telephones, etc) upgrades, replacements or enhancements.	
 
 	4.	Procurement services (hardware, software, services, etc), except as provided in Part A of Schedule I hereto.	
 
 	5.	Email hosting, filtering and delivery, excluding email forwarding.	
 
3

 	6.	Non-production Enterprise Application environments.	
 
 	7.	The Service Provider is not responsible for the renewal or cost of renewal of maintenance, license or support contracts for any software, hardware or services that are Transferred Assets, except as otherwise provided in the Transition Services Agreement.	
 
4

SCHEDULE II – EXCLUDED SERVICES
 
A	IT Services	
 
 	1.	Systems (applications, devices, servers, storage, telephones, etc.) which are supported immediately prior to the Distribution Date by Spinco Group Employees.	
 
 	2.	Disaster Recovery services for applications, devices, servers, etc. which are not in place or available immediately prior to the Distribution Date.	
 
 	3.	System (applications, devices, servers, storage, telephones, etc.) upgrades, replacements or enhancements.	
 
 	4.	Procurement services (hardware, software, services, etc.), except as provided in Part A of Schedule I hereto.	
 
 	5.	Email hosting, filtering and delivery, except email forwarding.	
 
 	6.	Non-production Enterprise Application Environment.	
 
 	7.	Except as otherwise provided in the Transition Services Agreement, the Service Provider is not responsible for the renewal or cost of renewal of maintenance, license or support contracts for any software, hardware or services that are Spinco Assets.	
 
 	8.	Excluded Applications set forth in the IT portion of Schedule I hereto.	
 
B	Financial & Accounting Services	
 
 	1.	Accounting policy and procedures and advice.	
 
 	2.	Intercompany accounting.	
 
 	3.	Audit activities-internal or external.	
 
 	4.	Exchange rate reporting.	
 
 	5.	Record retention management.	
 
 	6.	Capital project approval sign off.	
 
 	7.	Credit risk assessment.	
 
 	8.	Delegation of approval authorization.	
 
 	9.	Internal management reporting and analysis.	

 	10.	Credit cards, including purchase cards and corporate cards	
 
 	11.	External reporting.	
 
 	12.	External auditor representation.	
 
 	13.	Financial policy setting.	
 
 	14.	Financial reporting, consolidation and review.	
 
 	15.	Financial statement preparation, review and reconciliation.	
 
 	16.	Fixed asset accounting (except for those provided in Schedule I, Part A).	
 
 	17.	Accounts payable services (except for those provided in Schedule I, Part A).	
 
 	18.	Accounts receivable services (except for those provide in Schedule I, Part A).	
 
 	19.	General ledger and chart of accounts management (except for those provide in Schedule I, Part A).	
 
 	20.	Travel services (BCD), travel and expense reporting (Global One).	
 
 	21.	1099 filing.	
 
C	Sourcing and Procurement	
 
 	1.	All non-transportation sourcing and procurement (except for those listed in Part A of Schedule I).	
 
 	2.	All transportation sourcing (except for those listed in Part A of Schedule I ).	
 
D	Tax	
Excepted as provided in the Tax Matters Agreement, all tax services, including, but not limited to:
 
 	1.	Tax management, reporting, consultation, or return preparation for U.S. federal, state, local and foreign income, employment, sales and use, property, VAT or other taxes.	
 
 	2.	Tax appeals assessments and settlements.	
 
E	Legal, Compliance, Government Relations, Investor Relations and Contingency	
 
 	1.	All legal and ethics corporate compliance.	
 
 	2.	International trade compliance, including import and export compliance, to the extent the provision of any such services by Service Provider to a third party is prohibited by law or would require a Service Provider to possess a governmental license.	

 	3.	All government relations.	
 
 	4.	All investor relations.	
 
 	5.	All business continuity and contingency planning.	
 
F	Risk Management	
 
 	1.	All risk management services, including insurance, loss prevention and worker’s compensation.	
 
G	Human Resources Services	
All Human Resource services, including:
 
 	1.	Payroll-related administration and processing services.	
 
 	2.	Employee benefit plans and arrangements and all related services and administration.	
 
 	3.	Workforce administration.	
 
 	4.	Employee service center services.	
 
 	5.	Employee relocation services.	
 
 	6.	Employee assistance services (EAP).	
 
 	7.	Pre-employment background check I-9/E-Verify services.	
 
 	8.	Pre-employment and employment related drug testing services.	
 
 	9.	Learning administration.	
 
 	10.	Employment verification services.	
 
 	11.	Employ helpline services.	
 
 	12.	Unemployment management services.	
 
 	13.	Flex-staffing services.	
 
 	14.	Outplacement services.	
 
 	15.	Employee data, records management services, and reporting.	

 	16.	H.R. Policy administration.	
 
 	17.	Leave and disability processing/case management.	
 
H	Treasury Services	
All Treasury Services, including:
 
 	1.	Banking and cash management services.	
 
 	2.	Investment and borrowing policy and services.	
 
 	3.	Foreign currency management including hedging activities and information services.	
 
 	4.	Credit facilities.	

SCHEDULE III – LEAD REPRESENTATIVES
For IP :
C. Cato Ealy
Senior Vice President, Corporate Development
International Paper Company
6420 Poplar Avenue
Memphis, TN 38197
For Spinco :
Thomas S. Lazzaro
Senior Vice President, Field Sales and Operations
Veritiv Corporation
6285 Tri-Ridge Boulevard
Loveland, Ohio 45140

Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the use in this Registration Statement of Veritiv Corporation on Amendment No. 4 to Form S-1 of our report dated April 4, 2014 (June 4, 2014 as to the effects of the restatement discussed in Note 15), related to the combined financial statements of the xpedx business of International Paper Company (which report expresses an unqualified opinion and includes an explanatory paragraph referring to allocations of certain corporate costs from International Paper Company and an explanatory paragraph relating to the restatement discussed in Note 15) as of December 31, 2013 and 2012 and for the three years in the period ended December 31, 2013, appearing in the prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the heading “Experts” in such prospectus.
/s/ Deloitte & Touche LLP
Memphis, Tennessee
June 11, 2014

Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Amendment No. 4 to the Registration Statement on Form S-1 of Veritiv Corporation, of our report dated March 28, 2014, relating to the financial statements of UWW Holdings, Inc. and Subsidiaries, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Atlanta, Georgia
June 11, 2014