Common use of Calculation of Consolidated EBITDA Clause in Contracts

Calculation of Consolidated EBITDA. Consolidated EBITDA shall be calculated for any period by including the actual amount for such period, including the Consolidated EBITDA attributable to Acquisitions permitted prior to the Amendment No. 4 Effective Date and occurring during such period and (to the extent otherwise included in net income from continuing operations) excluding the Consolidated EBITDA attributable to Permitted Dispositions of assets occurring during such period on a pro forma basis for the period from the first day of the applicable period through the date of the closing of each such permitted Acquisition or Permitted Disposition, utilizing (a) where available or required pursuant to the terms of this Agreement, historical audited and/or reviewed unaudited financial statements obtained from the seller, broken down by fiscal quarter in the Company’s reasonable judgment or (b) unaudited financial statements (where no audited or reviewed financial statements are required pursuant to the terms of this Agreement) reviewed internally by the Company, broken down in the Company’s reasonable judgment; provided, however, that any such pro forma adjustment of Consolidated EBITDA shall not result in an increase of more than 10% of Consolidated EBITDA prior to such adjustment, unless the Company provides to the Administrative Agent (y) the supporting calculations for such adjustment and (z) such other information as the Administrative Agent may reasonably request to determine the accuracy of such calculations.

Calculation of Consolidated EBITDA. Consolidated EBITDA means, with respect to Holdings for any period: A. Net income of Holdings6 and its Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP provided, however, that, without duplication (including for purposes of determining Consolidated EBITDA), (i) non-cash extraordinary, non-recurring or unusual gains, losses, charges or expenses shall be excluded (ii) the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies during such period shall be excluded to the extent not otherwise reflected in a change to the Financial Covenant (iii) [reserved] (iv) the net income for such period of any Person that is not a Subsidiary, shall be excluded to the extent such Person is prohibited by contract (including its Organization Documents) or governmental approval (which has not been obtained), from making dividends or distributions to the Borrower or a Subsidiary; provided that Consolidated Net Income of the Borrower shall be increased by the amount of dividends or distributions or other payments that are actually paid to the Borrower or a Subsidiary thereof from a Person that is not such a Subsidiary in respect of such period (v) [reserved] (vi) [reserved] (vii) any impairment charge or asset write off or write down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities or as a result of a change in law or regulation, in each case, pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded For the avoidance of doubt, Consolidated Net Income shall be calculated on a Pro Forma Basis. B. Total exclusions to consolidated net income (sum of (i)-(vii) above) C. Consolidated Net Income (result of A minus B) 6 Unless the context shall otherwise require, references to Consolidated Net Income herein shall mean Consolidated Net Income of Holdings. D. Increased (without duplication, including for purposes of determining Consolidated Net Income) by the following, in each case (other than clause (xii)) to the extent deducted (and not added back or excluded) in determining Consolidated Net Income for such period: (i) provision for taxes based on income or profits or capital, including, without limitation, federal, provincial, state, franchise and similar taxes and foreign withholding taxes of such Person paid or accrued during such period (including penalties, interest, costs and expenses related to such taxes or arising from any tax examinations or Restricted Payments permitted pursuant to Section 5.7(c) of the Credit Agreement) (ii) Consolidated Interest Expense of such Person for such period (iii) Consolidated Depreciation and Amortization Expense of such Person for such period (iv) any out-of-pocket fees, payments, expenses or charges (including legal, tax, structuring and other costs and expenses, but excluding depreciation and amortization expense) related to: (a) the Transactions, including any payments and expenses, or any amortization thereof, related to the Transactions that are incurred within twelve months after the Closing Date and (b) any proposed or actual equity offering (including, without limitation, any Initial Public Offering), Investment, acquisition (including costs and expenses in connection with the de-listing of public targets and compliance with public company requirements), disposition, dividend, restricted payment or recapitalization or the incurrence and/or repayment of Indebtedness (including any incremental facility, any refinancing of any such Indebtedness, any letter of credit fees and/or breakage costs) (in each of the forgoing whether or not consummated or successful), including (1) such fees, expenses or charges related to the Loans, the Loan Documents and any credit facilities, (2) any amendment, restatement, extension, increase or other modification of the Loans, the Loan Documents and any credit facilities, (3) any charges, non-recurring acquisition costs or contingent transaction costs incurred during such period as a result of any such transaction and (4) one-time expenses related to enhanced accounting function or other transaction costs, including those associated with becoming standalone entity or public company; provided that the aggregate amount of fees, payments, expenses or charges related to preparation for an Initial Public Offering (including costs associated with becoming a standalone entity or public company, but excluding any underwriter or other transaction fees payable in connection with an Initial Public Offering) pursuant to this clause (iv) shall not exceed (A) for any period of four consecutive Fiscal Quarters ending after the Fourth Amendment Effective Date and on or prior to December 31, 2020, $4,900,000, (B) for Fiscal Years 2019 and 2020 in the aggregate, $4,900,000 and (C) for all periods thereafter, the Subject Adjustment Cap (when taken together with all other adjustments expressly subject to the Subject Adjustment Cap). (v) the amount (together with any fees, expenses or other charges in connection therewith) of any out-of-pocket deferred compensation, severance, signing bonuses, stay bonus, retention, recruiting and relocation costs, integration costs, transition costs, costs incurred in connection with any non-recurring strategic initiatives and intellectual property development, project startup costs and other restructuring charges, costs associated with establishing new facilities or reserves, any other one-time costs incurred in connection with acquisitions, excess fulfillment costs incurred prior to warehouse consolidation through December 31, 2017 and costs related to the closure and/or consolidation of facilities in the good faith determination of the Borrower and as certified by the Borrower’s chief financial officer, chief executive officer, controller or other comparable executive; provided that, the aggregate amount pursuant to this clause (v), together with the aggregate amount pursuant to clause (xii) below, the aggregate amount of inventory disposition expense for Fiscal Year 2020 pursuant to clause (xxi) below, the aggregate amount pursuant to clause (B) of the definition of Pro Forma Basis and all other adjustments expressly subject to the Subject Adjustment Cap (but excluding any adjustments under such clause (xii) and the definition of Pro Forma Basis determined on a basis consistent with Article 11 of Regulation S-X promulgated under the Exchange Act and as interpreted by the staff of the Securities and Exchange Commission (or any successor agency)), shall not exceed (1) in any period of four consecutive Fiscal Quarters ending on or before December 31, 2019, 20% of Consolidated EBITDA for such period, (2) in any period of four consecutive Fiscal Quarters ending after December 31, 2019 but on or prior to September 30, 2020, the sum of (x) 20% of Consolidated EBITDA attributable to the Fiscal Quarter or Fiscal Quarters in such period ending on or prior to December 31, 2019 and (y) 10% of Consolidated EBITDA attributable to each other Fiscal Quarter in such period and (3) thereafter, 10% of Consolidated EBITDA for such period, in each case, prior to giving effect to such adjustments for the applicable period or periods (the foregoing clauses (1) through (3), in each case, determined prior to giving effect to such adjustments for the applicable period or periods, the “Subject Adjustment Cap”); (vi) fees, costs and expenses incurred in connection with the Fourth Amendment consisting of (x) consent fees payable to Lenders in connection therewith, (y) legal fees of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Cravath, Swaine & ▇▇▇▇▇ LLP and ▇▇▇▇▇▇▇▇ ▇▇▇▇ in connection therewith and (z) any payment of, or reimbursement of the Agent and/or the Lenders for, costs and expenses of the Fourth Amendment Consultant; (vii) fees paid in an amount not to exceed $500,000 in any Fiscal Year to the Sponsor and its Affiliates pursuant to or in connection with services rendered pursuant to the Management Agreement, any amounts payable with respect to indemnities thereunder, and reasonable, out-of-pocket expenses paid, or reimbursed, to the Sponsor and its Affiliates (viii) non-cash stock option and other equity-based compensation (ix) (A) compensation and fees paid to directors of Holdings or any of its Subsidiaries permitted under the Credit Agreement in an aggregate cash amount not to exceed $1,000,000 in any Fiscal Year, (B) expense reimbursements for travel and other expenses paid to directors of Holdings or any of its Subsidiaries permitted under the Credit Agreement and (C) indemnifications of directors, officers and comparable managers of Holdings or any of its Subsidiaries permitted under the Credit Agreement (x) to the extent covered by insurance or reimbursed, or, so long as the Borrower has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer, losses or expenses with respect to liability or casualty event; provided that Consolidated EBITDA shall be calculated for decreased in any future period in which such reimbursement is actually received by including the actual amount, if any, by which such reimbursement is less than the accrued amounts added back pursuant to this clause (x) (xi) the amount of any earn out obligation which was reserved or paid during such period and deducted in the calculation of Consolidated Net Income for such period, including the Consolidated EBITDA attributable to Acquisitions permitted prior to the Amendment No. 4 Effective Date and occurring during such period and (to the extent otherwise included such earn out obligations are permitted under the Credit Agreement (xii) the amount of cost savings, operating expense reductions, other operating improvements and initiatives and synergies which are projected by the Borrower in net income from continuing operationsgood faith to be reasonably anticipated to be realizable within eighteen (18) excluding months of the date thereof (which will be added to Consolidated EBITDA attributable to Permitted Dispositions of assets occurring during such period as so projected until fully realized and calculated on a pro forma basis for the period from as though such cost savings, operating expense reductions, other operating improvements, initiatives and synergies had been realized on the first day of such period) net of the applicable amount of actual benefits realized during such period through from such actions; provided that all steps have been taken or are reasonably expected to be taken for realizing such cost savings and such cost savings are reasonably identifiable and factually supportable (in the good faith determination of the Borrower and certified by a Responsible Officer of the Borrower); provided further that, the aggregate amount pursuant to this clause (xii) and clause (B) of the definition of Pro Forma Basis, together with the aggregate amount pursuant to clause (v) above, the aggregate amount of inventory disposition expense for Fiscal Year 2020 pursuant to clause (xxi) below and all other adjustments expressly subject to the Subject Adjustment Cap, shall not exceed the Subject Adjustment Cap; provided that the limitations in the immediately preceding proviso will not apply to the extent such adjustments are determined on a basis consistent with Article 11 of Regulation S-X promulgated under the Exchange Act and as interpreted by the staff of the Securities and Exchange Commission (or any successor agency); (xiii) non-cash costs or losses related to hedging obligations (xiv) non-cash foreign exchange losses resulting from the impact of foreign currency changes on the valuation of assets or liabilities (xv) [Reserved] (xvi) any purchase accounting adjustments, restructuring and other non- recurring items or expenses incurred in connection with any Permitted Acquisition (including any debt or equity issuance in connection therewith) or any non-recurring items or expenses incurred in connection with a Disposition (xvii) (A) non-cash costs and expenses relating to any equity-based compensation or equity-based incentive plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, in each case, of Holdings, the Borrower or any Subsidiary for such period and (B) any costs or expense incurred by Holdings, the Borrower or any Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of Holdings or the Borrower or Net Issuance Proceeds of an issuance of equity interests (other than Disqualified Stock) of Holdings or the Borrower (xviii) all costs or losses (whether cash or non-cash) (without duplication) resulting from the early termination or extinguishment of Indebtedness (xix) cash expenses of Holdings, the Borrower and their Subsidiaries incurred during such period to the extent (x) deducted in determining Consolidated Net Income and (y) reimbursed in cash by any person (other than any of Holdings, the Borrower or any of their Subsidiaries or any owners, directly or indirectly, of equity interests, respectively, therein) during such period (or reasonably expected to be so reimbursed within 365 days of the end of such period to the extent not accrued) pursuant to an indemnity or guaranty or any other reimbursement agreement in favor of Holdings, the Borrower or any of their Subsidiaries to the extent such reimbursement has not been accrued (provided that (A) if not so reimbursed or received by Holdings, the Borrower or such Subsidiary within such 365 day period, such expenses or losses shall be subtracted in the subsequent calculation period or (B) if reimbursed or received by Holdings, the Borrower or such Subsidiary in a subsequent period, (1) such amount shall not be permitted to be added back in determining Consolidated EBITDA for such subsequent period and (2) Consolidated EBITDA shall be decreased for such subsequent period by an amount, if any, by which such reimbursement is less than the accrued amounts added back pursuant to this clause) (xx) to the extent deducted (and any reimbursement therefor not already added back) in determining Consolidated Net Income, the aggregate amount of expenses or losses incurred by Holdings, the Borrower or any Subsidiary relating to business interruption to the extent covered by insurance and (x) actually reimbursed or otherwise paid to Holdings, the Borrower or such Subsidiary or (y) so long as such amount for any calculation period is reasonably expected to be received by Holdings, the Borrower or such Subsidiary in a subsequent calculation period and within one year of the date of the closing of each underlying loss (provided that (A) if not so reimbursed or received by Holdings, the Borrower or such permitted Acquisition Subsidiary within such 365 day period, such expenses or Permitted Disposition, utilizing (a) where available or required pursuant to the terms of this Agreement, historical audited and/or reviewed unaudited financial statements obtained losses shall be subtracted from the seller, broken down by fiscal quarter Consolidated EBITDA in the Company’s reasonable judgment subsequent calculation period or (bB) unaudited financial statements if reimbursed or received by Holdings, the Borrower or such Subsidiary in a subsequent period, (where no audited or reviewed financial statements are required pursuant 1) such amount shall not be permitted to the terms of this Agreementbe added back in determining Consolidated EBITDA for such subsequent period and (2) reviewed internally by the Company, broken down in the Company’s reasonable judgment; provided, however, that any such pro forma adjustment of Consolidated EBITDA shall not result be decreased for such subsequent period by an amount, if any, by which such reimbursement is less than the accrued amounts added back pursuant to this clause) (xxi) losses, charges and expenses attributable to (x) asset sales or other dispositions or the repurchase, redemption, sale or disposition of any equity interests of any Person other than in an increase the ordinary course of more than 10% of Consolidated EBITDA prior to such adjustment, unless the Company provides to the Administrative Agent business and (y) repurchases or redemptions of any equity interests of Holdings from existing or former directors, officers or employees of Holdings, the supporting calculations Borrower or their Subsidiaries, their estates, beneficiaries under their estates, transferees, spouses or former spouses; provided that the aggregate amount of all expenses attributable to dispositions of inventory pursuant to this clause (xxi) shall not exceed (A) for any period of four consecutive Fiscal Quarters ending after the Fourth Amendment Effective Date and on or prior to December 31, 2019, $1,000,000, (B) for any period of four consecutive Fiscal Quarters ending after December 31, 2019 and on or prior to December 31, 2020, (1) with respect to such adjustment and (z) expenses attributable to dispositions of inventory for all Fiscal Quarters in such other information as the Administrative Agent may reasonably request period ending on or prior to determine the accuracy of such calculations.December 31, 2019,

Calculation of Consolidated EBITDA. Consolidated EBITDA shall be calculated for any period by including the actual amount for such period, including the Consolidated EBITDA attributable to Acquisitions permitted prior to the Amendment No. 4 Effective Date hereunder and occurring during such period and (to the extent otherwise included in net income from continuing operationsConsolidated Net Income) excluding the Consolidated EBITDA attributable to Permitted Dispositions of assets occurring during such period on a pro forma basis for the period from the first day of the applicable period through the date of the closing of each such permitted Acquisition or Permitted Disposition, utilizing (a) where available or required pursuant to the terms of this Agreement, historical audited and/or reviewed unaudited financial statements obtained from the seller, broken down by fiscal quarter in the Company’s reasonable judgment or (b) unaudited financial statements (where no audited or reviewed financial statements are required pursuant to the terms of this Agreement) reviewed internally by the Company, broken down in the Company’s reasonable judgment; provided, however, that any such pro forma adjustment of Consolidated EBITDA shall not result in an increase of more than 10% of Consolidated EBITDA prior to such adjustment, unless the Company provides to the Administrative Agent (y) the supporting calculations for such adjustment and (z) such other information as the Administrative Agent may reasonably request to determine the accuracy of such calculations.