Common use of Unrestricted Subsidiaries Clause in Contracts

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject (a) The Borrower may designate any of its Restricted Subsidiaries to the exclusions in the proviso in the be an Unrestricted Subsidiary if that designation would not cause a Default and if that designation otherwise is consistent with this definition of “an Unrestricted Subsidiary”, any . If a Restricted Subsidiary may be is designated as an Unrestricted Subsidiary, the Fair Market Value of all outstanding Investments owned by the Borrower and its Restricted Subsidiaries in the Subsidiary properly designated shall be deemed to be an Investment made as of the time of the designation and any will either reduce the amount available for Restricted Payments under Section 7.5 or be an Investment permitted under Section 7.4, as determined by the Borrower; provided that no designation of an Unrestricted Subsidiary may be designated as a made in reliance on Section 7.5(c). Such designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary upon otherwise meets the definition of an Unrestricted Subsidiary. (b) Any designation of a Subsidiary of the Borrower as an Unrestricted Subsidiary shall be evidenced by the Borrower’s delivery to the Administrative Agent a certified copy of written notice from a resolution of the board of directors of the Borrower giving effect to such designation and a certificate of a Responsible Officer certifying that such designation complied with the preceding conditions and was permitted by Section 7.5. If, at any time, any Unrestricted Subsidiary would fail to meet the requirements of an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement, and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Borrower as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 7.1, the Borrower will be in default of Section 7.1 unless such Unrestricted Subsidiary is made to meet such requirements. (c) The Borrower may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Borrower; provided that (a) immediately before such designation will be deemed to be an incurrence of Indebtedness and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating Liens by a Restricted Subsidiary as an of the Borrower of any outstanding Indebtedness and Liens of such Unrestricted Subsidiary in connection with Subsidiary, and such designation will only be permitted if (x) such Indebtedness and Liens are permitted under Sections 7.1 and 7.2, (y) the Borrower shall have delivered to the Administrative Agent a Permitted Securitization Program, immediately Pro Forma Compliance Certificate demonstrating that after giving effect to such designation, designation on a Pro Forma Basis, the Total Leverage Ratio shall Loan Parties would be equal in compliance with the financial covenants set forth in Article VI recomputed as of the end of the period of the four Fiscal Quarters most recently ended for which the Borrower has delivered financial statements pursuant to Section 5.1(a) or less than 2.50:1.00, (cb); and (z) no Subsidiary may Default or Event of Default would be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of in existence following such designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject to (a) The Administrative Borrower may at any time designate, by a certificate executed by a Responsible Officer of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Administrative Borrower, (i) any Restricted Subsidiary may be designated (other than the Subsidiary Borrower) as an Unrestricted Subsidiary and (ii) any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (aw) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (bx) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary the Administrative Borrower is in connection with a Permitted Securitization Program, Financial Covenant Compliance immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, designation and (cy) no Subsidiary Material Contracts may be designated as assigned to an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Administrative Borrower or the relevant Restricted Subsidiary (as applicable) therein at the date of designation in an amount equal to the net book aggregate fair market value of the Borrowerall such Person’s outstanding investment therein, and such designation will only be permitted if such Investment is permitted under Section 6.04. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the be deemed to be an incurrence of Indebtedness, Liens and Investments by a Restricted Subsidiary of any outstanding Indebtedness, Liens and Investments of such Unrestricted Subsidiary at the time date of designation, and such designation will only be permitted if such Indebtedness is permitted under Section 6.01, such Liens are permitted under Section 6.02 and such Investments are permitted by Section 6.04. (b) Any designation of a Subsidiary as an Unrestricted Subsidiary will be evidenced to the Administrative Agent by delivering to the Administrative Agent a certificate executed by a Responsible Officer of the Administrative Borrower certifying that such designation complied with the applicable conditions set forth in Section 5.14(a). (c) If, at any Indebtedness or time, any Unrestricted Subsidiary should fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for the purposes of this Agreement and any Indebtedness, Liens and Investments of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary existing at as of such timedate and, if such Indebtedness, Liens and Investments are not permitted to be incurred as of such date under Section 6.01, Section 6.02 or Section 6.04, as applicable, the Borrowers will be in default of such covenants.

Unrestricted Subsidiaries. Subject Celestica may, from time to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”time and at any time hereafter, designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary so long as: (a) (i) such Subsidiary shall not be a Subsidiary existing as at the date of this Agreement; (ii) such Subsidiary shall never have been a Designated Subsidiary; and (iii) such Subsidiary shall never have been a Restricted Subsidiary; (b) neither Celestica nor any of its Subsidiaries (other than Unrestricted Subsidiaries) shall be liable, contingently or otherwise, for any indebtedness or other liability or obligation of the Unrestricted Subsidiary, except for guarantees provided by the immediate parent of such Unrestricted Subsidiary in connection with respect of indebtedness of such Unrestricted Subsidiary, where such guarantees are: (i) made solely for the purpose of facilitating a Permitted Securitization Programpledge by the guarantor of Shares of such Unrestricted Subsidiary; and (ii) the recourse under such guarantees are limited to such pledged Shares; and (c) neither Celestica nor any of its Restricted Subsidiaries shall have applied the proceeds of any Advance under the Facility to fund the equity of, or otherwise capitalize the Unrestricted Subsidiary. Provided that an Event of Default has not occurred and is not continuing, Celestica may from time to time and at any time hereafter, designate an Unrestricted Subsidiary as a Restricted Subsidiary provided that: (i) immediately after upon giving effect to such designation, Celestica shall remain in compliance with all covenants set out in Section 9.3 on a Pro Forma Basis, pro-forma (four quarter) basis; and (ii) the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any such Unrestricted Subsidiary as a Restricted Subsidiary shall constitute would not otherwise result in the incurrence at the time occurrence of designation a Default or an Event of any Indebtedness or Liens of such Restricted Subsidiary existing at such timeDefault.

Unrestricted Subsidiaries. Subject to (a) The Borrowers may at any time after the exclusions in the proviso in the definition of “Closing Date designate any Subsidiary as an Unrestricted Subsidiary”, or designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that provided: (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, continuing or result therefrom; (bii) other than for purposes of designating a Restricted Subsidiary as an no Unrestricted Subsidiary shall own any Equity Interests in connection with a Permitted Securitization ProgramHoldings, immediately after giving effect to such designationany Borrower or any Restricted Subsidiary; (iii) (x) no Unrestricted Subsidiary shall hold any Indebtedness of, or any Lien on a Pro Forma Basisany property of Holdings, any Borrower or any of the Total Leverage Ratio Restricted Subsidiaries and (y) none of Holdings, any Borrower nor any of the Restricted Subsidiaries shall at any time be equal to directly or less than 2.50:1.00, indirectly liable for any Indebtedness of any Unrestricted Subsidiary; (civ) no Subsidiary may be designated as an Unrestricted Subsidiary or continue as an Unrestricted Subsidiary if it is a “Restricted Subsidiaryrestricted subsidiary” for purposes of the First Lien Obligations, any Junior Financing or any other Indebtedness of the Priority Lien Notes Documents, Borrowers or the ABL Credit Documents or any documents evidencing any Permitted Refinancing Restricted Subsidiaries outstanding at such time with an outstanding principal amount in excess of $5,000,000 (to the extent such other Indebtedness or any Subordinated Indebtedness and has comparable provisions for the designation of Unrestricted Subsidiaries); and (dv) each no Restricted Subsidiary to may be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as (A) if it was previously designated an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by or (B) if it owns material intellectual property utilized in the Borrower therein at the date of designation in an amount equal to the net book value business of the Borrower’s investment therein. Credit Parties and their Restricted Subsidiaries. (b) The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence or making, as applicable, at the time of designation of any then-existing Investment, Indebtedness or Liens of such Restricted Subsidiary Subsidiary, as applicable, existing at such time; provided that upon the designation of any Unrestricted Subsidiary as a Restricted Subsidiary, Holdings shall be deemed to continue to have an Investment in such resulting Restricted Subsidiary in an amount (if positive) equal to (i) Holdings’ Investment in such Restricted Subsidiary at the time of designation, less (ii) the portion of the fair market value (as reasonably determined by Holdings) of the net assets of such Restricted Subsidiary attributable to Holdings’ or its Restricted Subsidiary’s (as applicable) Investment therein (as reasonably estimated by Holdings). (c) The designation of any Subsidiary as an Unrestricted Subsidiary shall (i) constitute an Investment by Holdings (or its applicable Restricted Subsidiary) therein at the date of designation in an amount equal to the fair market value (as reasonably determined by Holdings) of the net assets of such Subsidiary attributable to Holdings’ or its Restricted Subsidiary’s (as applicable) Investment therein (as reasonably estimated by Holdings) and (ii) be permitted to the extent such Investment is permitted under Section 6.6. Neither Holdings nor any Restricted Subsidiary may contribute or otherwise sell or transfer to any Unrestricted Subsidiary any material intellectual property utilized in the business of the Credit Parties and their Restricted Subsidiaries.

Unrestricted Subsidiaries. Subject to (a) The Borrowers may at any time after the exclusions in the proviso in the definition of “Closing Date designate any Subsidiary as an Unrestricted Subsidiary”, or designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that provided: (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, continuing or result therefrom; (bii) other than for purposes of designating a Restricted Subsidiary as an no Unrestricted Subsidiary shall own any Equity Interests in connection with a Permitted Securitization ProgramHoldings, immediately after giving effect to such designationany Borrower or any Restricted Subsidiary; (iii) (x) no Unrestricted Subsidiary shall hold any Indebtedness of, or any Lien on a Pro Forma Basisany property of Holdings, any Borrower or any of the Total Leverage Ratio Restricted Subsidiaries and (y) none of Holdings, any Borrower nor any of the Restricted Subsidiaries shall at any time be equal to directly or less than 2.50:1.00, indirectly liable for any Indebtedness of any Unrestricted Subsidiary; (civ) no Subsidiary may be designated as an Unrestricted Subsidiary or continue as an Unrestricted Subsidiary if it is a “Restricted Subsidiaryrestricted subsidiary” for purposes of the Second Lien Term Facility Indebtedness, any other Junior Financing or any other Indebtedness of the Priority Lien Notes Documents, Borrowers or the ABL Credit Documents or any documents evidencing any Permitted Refinancing Restricted Subsidiaries outstanding at such time with an outstanding principal amount in excess of $5,000,000 (to the extent such other Indebtedness or any Subordinated Indebtedness and has comparable provisions for the designation of Unrestricted Subsidiaries); and (dv) each no Restricted Subsidiary to may be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as (A) if it was previously designated an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by or (B) if it owns material intellectual property utilized in the Borrower therein at the date of designation in an amount equal to the net book value business of the Borrower’s investment therein. Credit Parties and their Restricted Subsidiaries. (b) The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence or making, as applicable, at the time of designation of any then-existing Investment, Indebtedness or Liens of such Restricted Subsidiary Subsidiary, as applicable, existing at such time; provided that upon the designation of any Unrestricted Subsidiary as a Restricted Subsidiary, Holdings shall be deemed to continue to have an Investment in such resulting Restricted Subsidiary in an amount (if positive) equal to (i) Holdings’ Investment in such Restricted Subsidiary at the time of designation, less (ii) the portion of the fair market value (as reasonably determined by Holdings) of the net assets of such Restricted Subsidiary attributable to Holdings’ or its Restricted Subsidiary’s (as applicable) Investment therein (as reasonably estimated by Holdings). (c) The designation of any Subsidiary as an Unrestricted Subsidiary shall (i) constitute an Investment by Holdings (or its applicable Restricted Subsidiary) therein at the date of designation in an amount equal to the fair market value (as reasonably determined by Holdings) of the net assets of such Subsidiary attributable to Holdings’ or its Restricted Subsidiary’s (as applicable) Investment therein (as reasonably estimated by Holdings) and (ii) be permitted to the extent such Investment is permitted under Section 6.6. Neither Holdings nor any Restricted Subsidiary may contribute or otherwise sell or transfer to any Unrestricted Subsidiary any material intellectual property utilized in the business of the Credit Parties and their Restricted Subsidiaries.

Unrestricted Subsidiaries. Subject to The Parent may at any time after the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, A&R Closing Date designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any or remove an Unrestricted Subsidiary may be designated Subsidiary’s designation as such (a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower“Designation Removal”); provided that (ai) immediately before and after any such designation, no Default or Event of Default shall have has occurred and be continuing, is continuing (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately including after giving effect to the reclassification of Investments in, Indebtedness of, and Liens on the assets of, the applicable Subsidiary or Unrestricted Subsidiary) and (ii) after giving effect to any such designation, the Parent shall be in compliance with the Financial Covenants on a Pro Forma Basispro forma basis as of the last day of the most recently ended TTM Period and (iii) as of the date of the designation thereof, no Unrestricted Subsidiary shall own any Capital Stock in any Subsidiary of the Total Leverage Ratio shall be equal Parent (other than another Unrestricted Subsidiary) or hold any Indebtedness of, or any Lien on, any property of the Parent and its Subsidiaries; provided, further, that any Unrestricted Subsidiary that is re-designated as a Subsidiary pursuant to or less than 2.50:1.00, (c) no Subsidiary a Designation Removal may not subsequently be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower Parent (or its applicable Subsidiary) therein at the date of designation in an amount equal to the net book portion of the fair market value of the Borrowernet assets of such Subsidiary attributable to the Parent’s investment therein(or its applicable Subsidiary’s) equity interests therein as reasonably estimated by the Parent (and such designation shall only be permitted to the extent such Investment is permitted under Section 9.14). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary A Designation Removal shall constitute the making, incurrence or granting, as applicable, at the time of designation of any then-existing Investment, Indebtedness or Liens Lien of such Restricted Subsidiary, as applicable; provided that upon any Designation Removal, the Parent shall be deemed to have received a return on any Investment by the Parent and its Subsidiaries in the resulting Subsidiary existing in an amount equal to the portion of the fair market value of the net assets of such Subsidiary attributable to the Parent’s equity therein at the time of such timere-designation.

Unrestricted Subsidiaries. Subject to (a) The Borrower may at any time designate, by a certificate executed by a Responsible Officer of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Borrower, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (ii) the Borrower is in compliance on a Pro Forma Basis with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.1(a) or (b), and (iii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately at all times after giving effect to such designation, on a Pro Forma Basis(A) such Unrestricted Subsidiary shall have no Indebtedness other than Non-Recourse Debt, the Total Leverage Ratio shall be equal to or less other than 2.50:1.00as contemplated by Section 7.2(d)(iii), (cB) neither the Borrower nor any Restricted Subsidiary will have any direct or indirect obligation for any obligation or liability of such Unrestricted Subsidiary, other than as contemplated by Section 7.2(d)(iii) and (C) neither the Borrower nor any Restricted Subsidiary will be required to maintain or preserve such Unrestricted Subsidiary’s financial condition or cause such Unrestricted Subsidiary to achieve any specified level of operating results, (iv) such Unrestricted Subsidiary does not own, directly or indirectly, any Equity Interests in the Borrower or any Restricted Subsidiary and (v) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the purpose of any Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents Borrower or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each its Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtSubsidiaries. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower or the relevant Restricted Subsidiary (as applicable) therein at the date of designation in an amount equal to the net book fair market value of the Borrowerall such Person’s investment outstanding Investment therein. . (b) The designation of Borrower may at any time designate any Unrestricted Subsidiary as to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary shall constitute of any outstanding Indebtedness of such Unrestricted Subsidiary and an incurrence of Liens by a Restricted Subsidiary on the incurrence property of such Unrestricted Subsidiary then subject to any Liens, and such designation will only be permitted if (i) such Indebtedness is permitted under Section 7.2 and such Liens are permitted under Section 7.1, (ii) no Default or Event of Default would be in existence immediately following such designation, (iii) all representations and warranties herein with respect to such designated Subsidiary will be true and correct in all material respects as if remade at the time of designation of any Indebtedness or Liens such designation, except to the extent such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects as of such Restricted earlier date, (iv) the Borrower is in compliance on a Pro Forma Basis with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.1(a) or (b) and (v) such Subsidiary existing at such timebecomes a Loan Party to the extent required by Section 6.12.

Unrestricted Subsidiaries. Subject to Administrative Borrower may at any time after the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Closing Date (a) designate any Subsidiary (other than a Borrower), any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or (b) redesignate any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided provided, that (ai) immediately before and after any such designation, no Default or Event of Default shall have occurred and be continuing, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, the Companies shall be in compliance with the financial covenants set forth in Section 6.10, determined on a Pro Forma BasisBasis as of the last day of the most recently ended four fiscal quarters of Administrative Borrower for which financial statements have been delivered pursuant to Section 5.01(a) or (b), as applicable, regardless whether such date of determination precedes the Total Leverage Ratio shall be equal to or less than 2.50:1.00first test date for such covenant, (ciii) no Subsidiary of Administrative Borrower may be designated as an Unrestricted Subsidiary for purposes of this Agreement if it is a not an “Restricted Unrestricted Subsidiary” for purposes the purpose of any other Material Indebtedness of Administrative Borrower or any of the Priority Lien Notes DocumentsRestricted Subsidiaries that has a Restricted/Unrestricted Subsidiary provision, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (div) each Restricted any Subsidiary to be designated as that was an Unrestricted Subsidiary and its Subsidiaries has then was designated as a Restricted Subsidiary may not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debtthereafter be redesignated as an Unrestricted Subsidiary. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment under Section 7.02 by the Administrative Borrower (or its relevant Restricted Subsidiary) therein at the date of designation in an amount equal to the net book value of the Administrative Borrower’s investment (or such Restricted Subsidiary’s) Investment therein. The designation On the date of redesignation of any Unrestricted Subsidiary as a Restricted Subsidiary, Administrative Borrower (or such Restricted Subsidiary) shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary shall constitute equal to the incurrence amount (if positive) equal to (a) the “Investment” of Administrative Borrower or such Restricted Subsidiary, as the case may be, in such Subsidiary at the time of designation such redesignation, less (b) the fair market value (as determined in good faith by Administrative Borrower) of any Indebtedness or Liens the net assets of such Restricted Subsidiary existing at the time of such timeredesignation.

Unrestricted Subsidiaries. Subject to (a) The Borrowers may at any time from and after the exclusions in Fifth Amendment Effective Date designate, by a certificate executed by a Responsible Officer of the proviso in the definition of “Unrestricted Subsidiary”Borrowers, (i) any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and (ii) any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided Subsidiary, provided, that (aw) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, ; (bx) other than for purposes the Loan Parties are in compliance with all of designating a Restricted Subsidiary as an Unrestricted Subsidiary the covenants contained in connection with a Permitted Securitization Program, Section 7.18 hereof both before and immediately after giving effect to such designation, on and (y) to the extent a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be is being designated as an Unrestricted Subsidiary, such Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee own any Equity Interests in any Borrower or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtGuarantor. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower applicable Loan Party therein at the date of designation in an amount equal to the net book aggregate fair market value of the Borrowerall of such Person’s outstanding investment therein, and such designation will only be permitted if such Investment is permitted under Section 7.02 hereof. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the be deemed to be an incurrence at the time of designation of any Indebtedness or then outstanding Indebtedness, Liens and Investments of such former Unrestricted Subsidiary designated as a Restricted Subsidiary by such Restricted Subsidiary existing at the date of designation, and such designation shall only be permitted if such Indebtedness is permitted under Section 7.03 hereof, such Liens are permitted under Section 7.01 hereof and such Investments are permitted under Section 7.02 hereof. (b) Any designation of a Subsidiary as an Unrestricted Subsidiary will be evidenced to the Administrative Agent by delivering to the Administrative Agent a certificate executed by a Responsible Officer of the Borrowers certifying that such designation complied with the applicable conditions set forth in this Section 6.18. (c) If, at any time, any Unrestricted Subsidiary should fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness, Liens and Investments of such Subsidiary shall be deemed to be an incurrence of Indebtedness, Liens and Investments by a Restricted Subsidiary as of such date and, if such Indebtedness, Liens and Investments are not permitted to be incurred as of such date under Sections 7.01, 7.02 or 7.03, as applicable, the Loan Parties shall be in default of such covenants. (d) The income, assets and liabilities of any Unrestricted Subsidiary shall not be included for purposes of calculating any financial or other covenants contained herein and shall not be included in the Borrowing Base.

Unrestricted Subsidiaries. Subject (a) Schedule 6.08 sets forth those Subsidiaries that have been designated as Unrestricted Subsidiaries as of the date hereof, which Subsidiaries do not include any Borrower. TWC may designate any other of its Subsidiaries (other than a Borrower) as Unrestricted Subsidiaries from time to time in compliance with the exclusions in provisions of this Section 6.08. TWC will not designate any of its Subsidiaries as an Unrestricted Subsidiary unless at the proviso in the definition of “Unrestricted Subsidiary”, any Restricted time such Subsidiary may be is designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately Subsidiary, before and after giving effect to such designationdesignation on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as certified in an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect Officers' Certificate delivered to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not Administrative Agent at the time of such designation, and does not thereafter, create, incur, issue, assume, guarantee . Such Officers' Certificate also shall state the specific purpose for which such designation is being made. All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted Subsidiaries. (b) TWC may designate or otherwise become directly or indirectly liable with respect to any Indebtedness other than Nonre-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of designate any Unrestricted Subsidiary as a Restricted Subsidiary from time to time in compliance with the provisions of this Section 6.08. TWC will not designate or re-designate any Unrestricted Subsidiary as a Restricted Subsidiary, unless at the time such Unrestricted Subsidiary is so designated or re-designated as a Restricted Subsidiary, after giving effect to such designation or re-designation on a pro forma basis, no Event of Default shall constitute have occurred and be continuing, as certified in an Officer's Certificate delivered to the incurrence Administrative Agent at the time of such designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timere-designation.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, (a) The Borrower may at any time designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (cii) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be was previously designated as an Unrestricted Subsidiary or if any of its Subsidiaries is a Restricted Subsidiary (unless such Subsidiaries are being designated as Unrestricted Subsidiaries simultaneously therewith), (iii) immediately after giving effect to such designation (A) the Borrower and the Restricted Subsidiaries shall be in compliance, on an historical pro forma basis, with the covenants set forth in Sections 8.02 and 8.12, (B) the aggregate amount of revenues of the Unrestricted Subsidiaries shall not exceed 10% of the aggregate amount of revenues of the Borrower and its Subsidiaries has on a consolidated basis, (C) the consolidated EBITDA (measured on the same basis as “Consolidated EBITDA” provided herein, but for the Unrestricted Subsidiaries only) of the Unrestricted Subsidiaries shall not at exceed 10% of the time Consolidated EBITDA (measured as if all Subsidiaries were Restricted Subsidiaries for this purpose) of the Borrower and its Subsidiaries on a consolidated basis, and (D) the aggregate amount of total assets of the Unrestricted Subsidiaries shall not exceed 10% of the total assets of the Borrower and its Subsidiaries, and (iv) prior to the effectiveness of any such designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable the Borrower shall deliver to the Administrative Agent a certificate setting forth in reasonable detail the calculations demonstrating compliance with respect to any Indebtedness other than Non-Recourse Debtthe preceding subsections (iii)(A) through (iii)(D). The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the sum of (i) the Borrower’s direct or indirect equity ownership percentage of the net book value worth of such designated Restricted Subsidiary immediately prior to such designation (such net worth to be calculated without regard to any guarantee provided by such designated Restricted Subsidiary) and (ii) without duplication, the aggregate principal amount of all Indebtedness owed by such designated Unrestricted Subsidiary and its Subsidiaries (to the extent such Subsidiaries are not previously Unrestricted Subsidiaries) to the Borrower or any Restricted Subsidiary immediately prior to such designation, all calculated, except as set forth in the parenthetical to clause (i), on a consolidated basis in accordance with GAAP (and such designation shall only be permitted to the extent such Investment is permitted under Section 8.03). (b) If at any time: (i) an Unrestricted Subsidiary becomes a guarantor of the Subordinated Notes or of any other Indebtedness of the Borrower or any Restricted Subsidiary, then the Borrower shall provide prompt notice thereof to the Administrative Agent, and in any case within 10 days of such occurrence, and such Subsidiary shall automatically become a Restricted Subsidiary and shall become a Guarantor in compliance with, and otherwise satisfy the provisions of, Section 7.12, or (ii) any of the following occurs: (x) the aggregate amount of revenues of the Unrestricted Subsidiaries exceeds 10% of the aggregate amount of revenues of the Borrower and its Subsidiaries on a consolidated basis, (y) the consolidated EBITDA (measured on the same basis as “Consolidated EBITDA” provided herein, but for the Unrestricted Subsidiaries only) of the Unrestricted Subsidiaries exceeds 10% of the Consolidated EBITDA (measured as if all Subsidiaries were Restricted Subsidiaries for this purpose) of the Borrower and its Subsidiaries on a consolidated basis, or (z) the aggregate amount of total assets of the Unrestricted Subsidiaries exceeds 10% of the total assets of the Borrower and its Subsidiaries, then in any such case the Borrower will promptly, and in any event within 10 days thereafter, designate one or more Unrestricted Subsidiaries as Restricted Subsidiaries so that, after such designation, none of the tests in subsections (i), (ii) and (iii) is then violated. (c) If at any time a Restricted Subsidiary is designated as an Unrestricted Subsidiary in compliance with this Agreement, the Administrative Agent shall be authorized to, and shall at the request of the Borrower’s investment therein. The designation , release such Unrestricted Subsidiary from any Loan Document to which it is a party, and release the Equity Interests of such Unrestricted Subsidiary from the pledge thereof pursuant to the Pledge Agreement. (d) If at any time any Unrestricted Subsidiary as is designated or becomes a Restricted Subsidiary shall constitute pursuant to the incurrence at the time terms of designation of any Indebtedness or Liens of this Agreement, such Restricted Subsidiary existing at such timeshall, to the extent required thereby, comply with the provisions of Section 7.12 within the time required therein.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, (a) The Borrower may designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and and, subject to Section 8.18(c), any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, (i) no Default or Event of Default shall have occurred and be continuing, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio Borrower shall be equal to or less than 2.50:1.00, in pro forma compliance with the Financial Performance Covenants (ciii) no Subsidiary may Borrowing Base Deficiency not otherwise cured shall be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any existing or result therefrom and (iv) the representations and warranties of the Priority Lien Notes DocumentsBorrower and the Guarantors set forth in this Agreement and in the other Loan Documents shall be true and correct in all material respects (unless already qualified by materiality in which case such applicable representation and warranty shall be true and correct) on and as of the date of such designation, except to the ABL Credit Documents or extent any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness such representations and (d) each Restricted Subsidiary warranties are expressly limited to an earlier date, in which case, on and as of the date of such designation, such representations and warranties shall continue to be designated true and correct in all material respects (unless already qualified by materiality in which case such applicable representation and warranty shall be true and correct) as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. such specified earlier date. (b) The designation of any Restricted Subsidiary as an Unrestricted Subsidiary and any Disposition of Property to an Unrestricted Subsidiary shall constitute (i) an Investment under Section 7.02 by the Borrower therein at 9.05 as of the date of designation or Disposition, as applicable, in an amount equal to the net book value Fair Market Value of the Borrower’s investment therein. therein and (ii) a Disposition as of the date of designation or Disposition, including (A) for purposes of the provisions of Section 2.08 and (B) for purposes of EBITDAX where such Disposition shall be deemed to be a Material Disposition. (c) The designation of Borrower may designate any Unrestricted Subsidiary as a Restricted Subsidiary once upon delivery of written notice to the Administrative Agent; provided that such designation (i) shall constitute the incurrence at the time of designation of any Indebtedness or and Liens of such Restricted Subsidiary existing at such time, (ii) shall constitute a reduction in any Investment under Section 9.05 to the extent that such Investment was attributable to such Restricted Subsidiary being an Unrestricted Subsidiary at the date of designation in an amount equal to the Fair Market Value of the Borrower’s investment therein, it being understood that any incurrence of Indebtedness and Liens in connection herewith shall require compliance with Section 9.02 and Section 9.03, as applicable and (iii) shall require the Borrower to be in compliance with the Financial Performance Covenants immediately before such designation and in pro forma compliance immediately after such designation. (d) Any designation of a Restricted Subsidiary of the Borrower as an Unrestricted Subsidiary, any designation of a Unrestricted Subsidiary as a Restricted Subsidiary and any Disposition to an Unrestricted Subsidiary will require the Borrower to provide the Administrative Agent a certificate signed by a Responsible Officer of the Borrower certifying that such designation complied with the preceding conditions in Section 8.18(b) or Section 8.18(c), as applicable.

Unrestricted Subsidiaries. Subject (a) The Borrower shall not designate any Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary unless (i) no Default or Event of Default shall exist immediately prior or immediately after giving effect to such designation; (ii) the Borrower shall have delivered to the exclusions Administrative Agent a Pro Forma Compliance Certificate demonstrating that after giving effect to such designation on a Pro Forma Basis, the Loan Parties would be in the proviso in the definition of “Unrestricted Subsidiary”, any Pro Forma Compliance; and (iii) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary and if such Restricted Subsidiary Guarantees any indebtedness in excess of the Threshold Amount of the Borrower or any Restricted Subsidiary. (i) No Unrestricted Subsidiary may be that has been designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and may subsequently be continuing, (b) other than for purposes of designating a Restricted Subsidiary re-designated as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, Subsidiary; and (cii) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each unless concurrent with such designation such Restricted Subsidiary to be is designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee “unrestricted subsidiary” (or otherwise become directly or indirectly liable with respect not be subject to the covenants) under any Indebtedness other than Non-Recourse Debt. Additional Indebtedness. (c) The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at in such Subsidiary on the date of such designation in an amount equal to the net book fair market value of such Subsidiary (as determined by the Borrower’s investment thereinBorrower in good faith) on such date. Accordingly, such designation shall be permitted only if the Investment represented thereby would be permitted under Section 7.02. (d) The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute (i) the incurrence at on the time date of such designation of any Investment, Indebtedness or Liens of such Restricted Subsidiary existing at on such timedate and (ii) for purposes of calculating the outstanding amount of Investments by the Borrower and its Restricted Subsidiaries in all Unrestricted Subsidiaries, a return on all Investments by the Borrower and its Restricted Subsidiaries in such Subsidiary in an amount equal to the outstanding amount of all such Investments in such Subsidiary on the date of such designation.

Unrestricted Subsidiaries. Subject to (a) The Parent Borrower may at any time after the exclusions in Funding Date, substantially contemporaneously upon the proviso in the definition organization or acquisition of “any Subsidiary, designate such Subsidiary as an Unrestricted Subsidiary”, or designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that provided, that, (ai) immediately before and after such designation, designation (x) no Default or Event of Default shall have occurred and be continuing, and (by) other than for purposes of designating the Parent Borrower shall be in compliance, on a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately pro forma basis after giving effect to such designation, with the covenants contained in Section 6.1, in each case recomputed as at the last day of the most recently ended fiscal quarter of the Parent Borrower for which the relevant information is available as if such designation had occurred on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, first day of each relevant period for testing such compliance; (cii) no Unrestricted Subsidiary shall own any Capital Stock in any Borrower or any Restricted Subsidiary; (iii) no Unrestricted Subsidiary shall hold any Indebtedness of, or any Lien on any property of, any Borrower or any Restricted Subsidiary; and (iv) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be was previously designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. Subsidiary. (b) The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Funding Date shall constitute an Investment under Section 7.02 by the Parent Borrower therein at the date of designation in an amount equal to the net book fair market value as determined in good faith by the Parent Borrower of the Borrower’s investment therein. such Investment. (c) The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence by the Parent Borrower at the time of such designation of any Investment, Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject to (a) The Borrower may at any time after the exclusions in Closing Date (i) substantially contemporaneously upon the proviso in the definition organization or acquisition of “Unrestricted any Subsidiary”, any Restricted designate such Subsidiary may be designated as an Unrestricted Subsidiary and or (ii) designate any Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that that, in each case, (ai) immediately before and after such designation, designation (x) no Default or Event of Default shall have occurred and be continuing, and (by) other than for purposes of designating the Borrower shall be in compliance, on a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately Pro Forma Basis after giving effect to such designation, with the covenant contained in clause (a) of Section 8.8, in each case recomputed as at the last day of the most recently ended Fiscal Quarter of the Borrower for which the relevant information is available as if such designation had occurred on a Pro Forma Basisthe first day of each relevant period for testing such compliance; (ii) no Unrestricted Subsidiary shall own any Equity Interests in the Borrower, any Guarantor or any Restricted Subsidiary; (iii) no Unrestricted Subsidiary shall hold any Indebtedness of, or any Lien on any property of, the Total Leverage Ratio shall be equal to Borrower, any Guarantor or less than 2.50:1.00, any Restricted Subsidiary; and (civ) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted was previously designated an Unrestricted Subsidiary” for purposes of any . Each Unrestricted Subsidiary as of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and First Amendment Effective Date is set forth on Schedule I. (db) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book fair market value as determined in good faith by the Borrower of such Investment; provided that, the Borrower’s investment therein. designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment pursuant to Section 8.6(k) by the Borrower therein at the date of designation in an amount equal to the fair market value as determined in good faith by the Borrower of such Investment. (c) The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence by the Borrower at the time of such designation of any Investment, Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject to (a) The Borrower may at any time designate, by a certificate executed by a Responsible Officer of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Borrower, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (ii) the Borrower is in pro forma compliance with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately and (iii) after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio (A) such Unrestricted Subsidiary shall be equal to or less have no Indebtedness other than 2.50:1.00Non-Recourse Debt, (cB) neither the Borrower nor any Restricted Subsidiary will have any direct or indirect obligation for any obligation or liability of such Unrestricted Subsidiary and (C) neither the Borrower nor any Restricted Subsidiary will be required to maintain or preserve such Unrestricted Subsidiary’s financial condition or cause such Unrestricted Subsidiary to achieve any specified level of operating results, (iv) such Unrestricted Subsidiary does not own, directly or indirectly, any Equity Interests of the Borrower or any Restricted Subsidiary, (v) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the purpose of any Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents Borrower or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness its Restricted Subsidiaries and (dvi) each Restricted Subsidiary to be designated as an the total assets of all Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness (other than Non-Recourse Debtthe Rover JV Holdco) shall be less than 10% of Consolidated Total Assets immediately after giving effect to such designation. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower or the relevant Restricted Subsidiary (as applicable) therein at the date of designation in an amount equal to the net book fair market value of the Borrowerall such Person’s investment outstanding Investment therein. . (b) The designation of Borrower may at any time designate any Unrestricted Subsidiary as to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary shall constitute of any outstanding Indebtedness of such Unrestricted Subsidiary and an incurrence of Liens by a Restricted Subsidiary on the incurrence property of such Unrestricted Subsidiary, and such designation will only be permitted if (i) such Indebtedness is permitted under Section 7.02 and such Liens are permitted under Section 7.01, (ii) no Default or Event of Default would be in existence immediately following such designation, (iii) all representations and warranties herein will be true and correct in all material respects as if remade at the time of designation of any Indebtedness or Liens such designation, except to the extent such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects as of such Restricted earlier date, (iv) the Borrower is in pro forma compliance with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b), and (v) such Subsidiary existing at such timebecomes a Loan Party to the extent required by Section 6.12.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerBorrower Representative; provided provided, that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio Payment Conditions shall be equal to or less than 2.50:1.00have been satisfied, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” (or equivalent) for purposes of any of the Priority Lien Notes Documents, the ABL Term Loan Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness or Junior Lien Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein Representative in such Unrestricted Subsidiary at the date of designation in an amount equal to the net book value of the Borrower’s Borrowers’ investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject The Parent Borrower: (a) may designate, by written notification thereof to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Administrative Agent, any Restricted Subsidiary may be designated Subsidiary, including a newly formed or newly acquired Subsidiary, as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that if (ai) immediately before prior, and after immediately giving effect, to such designation, no Default or Event of Default shall have has occurred and be is continuing, and (bii) other than for purposes of designating a Restricted Subsidiary as such designation is deemed to be an Investment in an Unrestricted Subsidiary in connection with an amount equal to the Fair Market Value as of the date of such designation of the Parent Borrower’s direct and indirect ownership interest in such Subsidiary and such Investment would not be prohibited under Section 7.5 at the time of such designation; (b) may designate or redesignate, by written notification thereof to the Administrative Agent, any Unrestricted Subsidiary to be a Permitted Securitization Program, Restricted Subsidiary if immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to designation or less than 2.50:1.00redesignation, (ci) the representations and warranties of the Parent Borrower and its Restricted Subsidiaries contained in each of the Credit Documents are true and correct in all material respects on and as of such date as if made on and as of such redesignation (or, if stated to have been made expressly as of an earlier date, were true and correct in all material respects as of such date), (ii) no Subsidiary may be designated as an Unrestricted Subsidiary if it Default has occurred and is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documentscontinuing, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (diii) each Restricted Subsidiary such designation is deemed to be designated as an Investment in an Unrestricted Subsidiary and its Subsidiaries has (iv) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such designation or redesignation would, if Incurred or made at such time, have been permitted to be Incurred or made for all purposes hereof; and (c) will not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect permit any Unrestricted Subsidiary (i) to Incur any Indebtedness other than Unrestricted Subsidiary Non-Recourse Debt. The designation of , except any Guaranty given solely to support a pledge by the Parent Borrower or any Restricted Subsidiary of the Capital Stock of such Unrestricted Subsidiary, which Guaranty is not recourse to the Parent Borrower or any Restricted Subsidiary, and except for obligations of the Parent Borrower or any Restricted Subsidiary in respect of Indebtedness of such Unrestricted Subsidiary that is permitted as both an Incurrence of Indebtedness under Section 7.3 and is an Investment not prohibited by Section 7.5, (ii) to guarantee or otherwise directly or indirectly provide credit support for any Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries, except for any pledge of Capital Stock of such Unrestricted Subsidiary to secure Indebtedness of the Parent Borrower or any of its Restricted Subsidiaries and (iii) to hold any Capital Stock in, or any Indebtedness of, the Parent Borrower or any Restricted Subsidiary. If, at any time, any Unrestricted Subsidiary fails to meet the requirements of Section 7.9(c), it shall thereafter cease to be an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value for purposes hereof and any Indebtedness and Investments of the Borrower’s investment therein. The designation Subsidiary and any Liens on assets of any Unrestricted such Subsidiary as shall be deemed to be Incurred or made by a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timetime and the Parent Borrower shall not be deemed to be in default of this Section 7.9, but if the Indebtedness is not permitted to be Incurred under Section 7.3, the Investments are prohibited by Section 7.5, or the Lien is not permitted under Section 7.2, the Parent Borrower shall be in default of the applicable covenant.

Unrestricted Subsidiaries. Subject (a) Schedule 6.08 sets forth those Subsidiaries that have been designated as Unrestricted Subsidiaries as of the date hereof, which Subsidiaries do not include any Guarantor or a Borrower. A Borrower may designate any other of its Subsidiaries (other than a Borrower or a Guarantor) as Unrestricted Subsidiaries from time to time in compliance with the exclusions in provisions of this Section 6.08. Such Borrower will not designate any of its Subsidiaries as an Unrestricted Subsidiary unless at the proviso in the definition of “Unrestricted Subsidiary”, any Restricted time such Subsidiary may be is designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately Subsidiary, before and after giving effect to such designationdesignation on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as certified in an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect Officers’ Certificate delivered to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not Administrative Agent at the time of such designation, and does not thereafter, create, incur, issue, assume, guarantee . Such Officers’ Certificate also shall state the specific purpose for which such designation is being made. All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted Subsidiaries. (b) A Borrower may designate or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of redesignate any Unrestricted Subsidiary as a Restricted Subsidiary from time to time in compliance with the provisions of this Section 6.08. Such Borrower will not designate or redesignate any Unrestricted Subsidiary as a Restricted Subsidiary, unless at the time such Unrestricted Subsidiary is so designated or redesignated as a Restricted Subsidiary, after giving effect to such designation or redesignation on a pro forma basis, no Event of Default shall constitute have occurred and be continuing, as certified in an Officer’s Certificate delivered to the incurrence Administrative Agent at the time of such designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timeredesignation.

Unrestricted Subsidiaries. Subject The Borrower: (a) may designate, by written notification thereof to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Administrative Agent, any Restricted Subsidiary may be designated Subsidiary, including a newly formed or newly acquired Subsidiary, as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that if (ai) immediately before prior, and after immediately giving effect, to such designation, no Default or Event of Default shall have has occurred and be is continuing, and (bii) other than for purposes of designating a Restricted Subsidiary as such designation is deemed to be an Investment in an Unrestricted Subsidiary in connection with an amount equal to the Fair Market Value as of the date of such designation of the Borrower’s direct and indirect ownership interest in such Subsidiary and such Investment would not be prohibited under Section 7.5 at the time of such designation; (b) may designate or redesignate, by written notification thereof to the Administrative Agent, any Unrestricted Subsidiary to be a Permitted Securitization Program, Restricted Subsidiary if immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to designation or less than 2.50:1.00redesignation, (ci) the representations and warranties of the Borrower and its Restricted Subsidiaries contained in each of the Credit Documents are true and correct in all material respects on and as of such date as if made on and as of such redesignation (or, if stated to have been made expressly as of an earlier date, were true and correct in all material respects as of such date), (ii) no Subsidiary may be designated as an Unrestricted Subsidiary if it Default has occurred and is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documentscontinuing, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (diii) each Restricted Subsidiary such designation is deemed to be designated as an Investment in an Unrestricted Subsidiary and its Subsidiaries has (iv) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such designation or redesignation would, if Incurred or made at such time, have been permitted to be Incurred or made for all purposes hereof; and (c) will not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect permit any Unrestricted Subsidiary (i) to Incur any Indebtedness other than Unrestricted Subsidiary Non-Recourse Debt. The designation of , except any Guaranty given solely to support a pledge by the Borrower or any Restricted Subsidiary of the Capital Stock of such Unrestricted Subsidiary, which Guaranty is not recourse to the Borrower or any Restricted Subsidiary, and except for obligations of the Borrower or any Restricted Subsidiary in respect of Indebtedness of such Unrestricted Subsidiary that is permitted as both an Incurrence of Indebtedness under Section 7.3 and is an Investment not prohibited by Section 7.5, (ii) to guarantee or otherwise directly or indirectly provide credit support for any Indebtedness of the Borrower or any of its Restricted Subsidiaries, except for any pledge of Capital Stock of such Unrestricted Subsidiary to secure Indebtedness of the Borrower or any of its Restricted Subsidiaries and (iii) to hold any Capital Stock in, or any Indebtedness of, the Borrower or any Restricted Subsidiary. If, at any time, any Unrestricted Subsidiary fails to meet the requirements of Section 7.9(c), it shall thereafter cease to be an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value for purposes hereof and any Indebtedness and Investments of the Borrower’s investment therein. The designation Subsidiary and any Liens on assets of any Unrestricted such Subsidiary as shall be deemed to be Incurred or made by a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timetime and the Borrower shall not be deemed to be in default of this Section 7.9, but if the Indebtedness is not permitted to be Incurred under Section 7.3, the Investments are prohibited by Section 7.5, or the Lien is not permitted under Section 7.2, the Borrower shall be in default of the applicable covenant.

Unrestricted Subsidiaries. Subject (a) Schedule 6.08 sets forth those Subsidiaries that have been designated as Unrestricted Subsidiaries as of the date hereof, which Subsidiaries do not include any Guarantor or a Borrower. A Borrower may designate any other of its Subsidiaries (other than a Borrower or a Guarantor) as Unrestricted Subsidiaries from time to time in compliance with the exclusions in provisions of this Section 6.08. Such Borrower will not designate any of its Subsidiaries as an Unrestricted Subsidiary unless at the proviso in the definition of “Unrestricted Subsidiary”, any Restricted time such Subsidiary may be is designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately Subsidiary, before and after giving effect to such designationdesignation on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, (b) other than as certified in an Officers' Certificate delivered to the Administrative Agent at the time of such designation. Such Officers' Certificate also shall state the specific purpose for purposes which such designation is being made. All Subsidiaries of designating a Restricted Subsidiary Unrestricted Subsidiaries shall be Unrestricted Subsidiaries. It is understood and agreed that, notwithstanding anything in this Agreement to the contrary, upon designation by AOLTW of TWE or TWEAN as an Unrestricted Subsidiary in connection accordance with this Section 6.08 subsequent to termination of its status as a Permitted Securitization ProgramBorrower in accordance with Section 2.21, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any determining compliance with the provisions of this Agreement and the Priority Lien Notes other Credit Documents, including the ABL Credit Documents or foregoing provisions of this Section 6.08, all representations and warranties, conditions, covenants and/or Defaults to the extent otherwise applicable to any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary such terminated Borrower but not applicable to all Unrestricted Subsidiaries generally, shall thereafter be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable deemed inapplicable with respect to any Indebtedness other than Nonsuch terminated Borrower until such time, if any, as such terminated Borrower shall subsequently be designated or redesignated a Restricted Subsidiary. (b) A Borrower may designate or re-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of designate any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute from time to time in compliance with the incurrence at the time provisions of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timethis Section 6.

Unrestricted Subsidiaries. Subject The Parent: (a) may designate, by written notification thereof to the exclusions Administrative Agent, any Restricted Subsidiary, including a newly formed or newly acquired Subsidiary, as an Unrestricted Subsidiary if (i) immediately prior, and after immediately giving effect, to such designation, no Default has occurred and is continuing, and (ii) such designation is deemed to be an Investment in an Unrestricted Subsidiary in an amount equal to the proviso Fair Market Value as of the date of such designation of the Parent’s direct and indirect ownership interest in such Subsidiary and such Investment would not be prohibited under Section 7.5 at the time of such designation; and (b) may designate or redesignate, by written notification thereof to the Administrative Agent, any Unrestricted Subsidiary to be a Restricted Subsidiary if immediately after giving effect to such designation or redesignation, (i) no Default has occurred and is continuing, (ii) such designation is deemed to be an Investment in an Unrestricted Subsidiary and (iii) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such designation or redesignation would, if Incurred or made at such time, have been permitted to be Incurred or made for all purposes hereof. If, at any time, any Unrestricted Subsidiary fails to meet the requirements of the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may it shall thereafter cease to be designated as an Unrestricted Subsidiary for purposes hereof and any Unrestricted Indebtedness and Investments of the Subsidiary may and any Liens on assets of such Subsidiary shall be designated as deemed to be Incurred or made by a Restricted Subsidiary upon delivery at such time and the Parent shall not be deemed to be in default of this Section 7.8, but if the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and Indebtedness is not permitted to be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma BasisIncurred under Section 7.3, the Total Leverage Ratio Investments are prohibited by Section 7.5, or the Lien is not permitted under Section 7.2, the Parent shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any in default of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timeapplicable covenant.

Unrestricted Subsidiaries. Subject Prior to the exclusions in Plant Completion Date, no subsidiaries of the proviso in Borrower shall be Unrestricted Subsidiaries. The Borrower may at any time after the definition Plant Completion Date designate any of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated its Subsidiaries as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery that is not an Unrestricted Subsidiary by written notice to the Administrative Agent of written notice from the BorrowerAgent; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, the Total Secured Debt Leverage Ratio (calculated on a Pro Forma Basis, ) as of the Total Leverage Ratio end of the most recent Test Period shall be less than or equal to or less than 2.50:1.002.50 to 1.00, (ciii) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” restricted by and subject to the covenants contained in the documents governing Indebtedness expressly subordinated to the Obligations, (iv) the LNG Group Members shall have sufficient Investment capacity hereunder (determined in accordance with the following sentence) in respect of such designation, and (v) for purposes the avoidance of any of the Priority Lien Notes Documentsdoubt, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to Borrower shall not be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtSubsidiary. The designation of any Restricted Subsidiary of the Borrower as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment under Section 7.02 by the Borrower LNG Group Members therein at the date of designation in an amount equal to the net book fair market value (as determined in good faith by a Responsible Officer) of the Borrower’s LNG Group Members’ investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary of the Borrower that is not an Unrestricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time. Notwithstanding anything in this Agreement to the contrary, any LNG Group Member designated as an Unrestricted Subsidiary shall not be deemed to be an LNG Group Member for any purposes of this Agreement, including without limitation for purposes of financial definitions and financial calculations contained herein.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition The board of “Unrestricted Subsidiary”, directors (or similar governing body) of Borrower may at any time designate any Restricted Subsidiary may be designated of Borrower acquired or formed after the Effective Date as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that provided, that, (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuingcontinuing or would result therefrom, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, the Credit Parties shall be in compliance on a Pro Forma Basispro forma basis with the covenants set forth in Article VII, recomputed for the Total Leverage Ratio shall be equal most recent Fiscal Quarter for which financial statements have been delivered (or are required to or less than 2.50:1.00have been delivered), (ciii) no Subsidiary may be designated as an Unrestricted Subsidiary if it is was previously an unrestricted Subsidiary and has been redesignated as a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (div) each Restricted no Subsidiary to may be designated as an Unrestricted Subsidiary to the extent that after giving effect thereto, all Unrestricted Subsidiaries would have total assets (including Stock in other Subsidiaries and its Subsidiaries has not excluding investments that are eliminated in consolidation) equal to or greater than 2.50% of Consolidated Total Assets, (v) Borrower shall deliver to Agent at least three Business Days prior to such designation a certificate of a Responsible Officer of Borrower, together with all relevant financial information reasonably requested by Agent, demonstrating compliance with the time foregoing clauses (i) through (iv) of designationthis Section 5.16 and, if applicable, certifying that such Subsidiary meets the requirements of an “Unrestricted Subsidiary” and does not thereafter(vi) at least ten days prior to the designation of any Unrestricted Subsidiary as a Restricted Subsidiary, createthe Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, incurincluding the USA Patriot Act, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debtsuch Subsidiary. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower Credit Parties therein at the date of designation in an amount equal to the net book fair market value of the Borrower’s investment thereinapplicable Credit Parties’ Investment in such Subsidiary; provided that upon a designation of such Unrestricted Subsidiary as a Restricted Subsidiary (including by means of a transfer of assets of an Unrestricted Subsidiary to a Restricted Subsidiary or a combination of an Unrestricted Subsidiary with a Restricted Subsidiary in which the Restricted Subsidiary survives), the Credit Parties shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to (i) the lesser of (A) the fair market value of the Investments of the Credit Parties and their Restricted Subsidiaries in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) and (B) the fair market value of Investments of the Credit Parties and their Restricted Subsidiaries made in connection with the designation of such Restricted Subsidiary as an Unrestricted Subsidiary minus (ii) the portion (proportionate to the Credit Parties’ and their Subsidiaries’ Stock in such resulting Restricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence or making, as applicable, at the time of designation of any Investments, Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject to (a) The Board of Directors of the exclusions in Parent Guarantor may designate after the proviso in Issue Date any of its Subsidiaries (other than the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated Company) as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as under this Indenture (a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that “Designation”) only if: (a1) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuingcontinuing at the time of or after giving effect to such Designation; (2) (x) the Parent Guarantor would be permitted to make an Investment at the time of Designation (assuming the effectiveness of such Designation) pursuant to paragraph (a) of Section 4.08 or as a Permitted Payment or Permitted Investment in an amount (the “Designation Amount”) equal to the greater of (1) the net book value of the Parent Guarantor’s interest in such Subsidiary calculated in accordance with GAAP and (2) the Fair Market Value of the Parent Guarantor’s interest in such Subsidiary as determined in good faith by the Parent Guarantor’s Board of Directors, or (y) the Designation Amount is less than $1,000; (3) such Unrestricted Subsidiary does not own any Capital Stock in any Restricted Subsidiary which is not simultaneously being designated an Unrestricted Subsidiary; (4) such Unrestricted Subsidiary is not liable, directly or indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness; provided that an Unrestricted Subsidiary may provide a Guarantee for the Notes; and (5) such Unrestricted Subsidiary is not a party to any agreement, contract, arrangement or understanding at such time with the Parent Guarantor, the Company or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Parent Guarantor, the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company or, in the event such condition is not satisfied, the value of such agreement, contract, arrangement or understanding to such Unrestricted Subsidiary shall be deemed a Restricted Payment. (b) In the event of any such Designation, the Parent Guarantor shall be deemed, for all purposes of this Indenture, to have made an Investment equal to the Designation Amount that, as designated by the Parent Guarantor, constitutes a Restricted Payment pursuant to paragraph (a) of Section 4.08 or a Permitted Payment or Permitted Investment. (c) The Parent Guarantor shall not and shall not cause or permit the Company or any Restricted Subsidiary to at any time: (1) provide credit support for, guarantee or subject any of its property or assets (other than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of, any Indebtedness of any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness) or enter into or become a party to any agreement, contract, arrangement or understanding with any Unrestricted Subsidiary, the terms of which, together with the terms of all other agreements, contracts, arrangements and understandings with such Unrestricted Subsidiary, taken as a whole, in the good-faith judgment of the Board of Directors, are less favorable to the Parent Guarantor, the Company and the Restricted Subsidiaries than those that would be available in a comparable transaction in arm’s-length dealings with a party that is not an Affiliate of the Company; provided that this Section 4.15 shall not be deemed to prevent Permitted Investments, Restricted Payments or Permitted Payments in Unrestricted Subsidiaries that are otherwise allowed under this Indenture, or (2) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary (other than by pledge of the Capital Stock thereof). (d) For purposes of designating this Section 4.15, the Designation of a Subsidiary of the Parent Guarantor as an Unrestricted Subsidiary shall be deemed to be the Designation of all of the Subsidiaries of such Subsidiary as Unrestricted Subsidiaries. Unless so designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Parent Guarantor will be classified as a Restricted Subsidiary. (e) The Parent Guarantor may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary in connection with (a “Revocation”) if: (1) no Default or Event of Default shall have occurred and be continuing at the time of and after giving effect to such Revocation; (2) all Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if incurred at such time, have been permitted to be incurred for all purposes of this Indenture; and (3) unless such redesignated Subsidiary shall not have any Indebtedness outstanding (other than Indebtedness that would be Permitted Securitization ProgramDebt), immediately after giving effect to such designationproposed Revocation, on a Pro Forma Basis, and after giving pro forma effect to the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes incurrence of any such Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted such redesignated Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at if such Indebtedness was incurred on the date of designation in an amount equal the Revocation, the Parent Guarantor or the Company could incur $1.00 of additional Indebtedness (other than Permitted Debt) pursuant to Section 4.07. (f) All Designations and Revocations shall be evidenced by a Board Resolution of the Board of Directors of the Parent Guarantor delivered to the net book value Trustee certifying compliance with the provisions of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timethis Section 4.15.

Unrestricted Subsidiaries. Subject to (a) The Board of Directors or other applicable governing body of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, Borrower may at any time designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or designate any Unrestricted Subsidiary may be designated as a Restricted Subsidiary Subsidiary, upon delivery to receipt by the Administrative Agent of written notice from the BorrowerBorrower that from and after such notice such subsidiary shall be or cease to be an Unrestricted Subsidiary, as applicable; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with that is a Permitted Securitization ProgramSpecial Purpose Receivables Subsidiary, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio Borrower shall be equal in compliance with Sections 6.10 and 6.11, and, as a condition precedent to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the effectiveness of any of the Priority Lien Notes Documentssuch designation, the ABL Credit Documents or Borrower shall deliver to the Administrative Agent a certificate notifying the Administrative Agent of any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness such designation and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at also setting forth in reasonable detail the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable calculations demonstrating compliance with respect to any Indebtedness other than Non-Recourse Debtthe such covenants. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 6.01 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time. (b) The Borrower shall cause each Unrestricted Subsidiary to: (i) maintain entity records and books of account separate from those of the Borrower and its Restricted Subsidiaries, (ii) not commingle its funds or assets with those of any of the Borrower and its Restricted Subsidiaries and (iii) provide that its board of directors or other analogous governing body will hold all appropriate meetings to authorize and approve such entity’s actions, which meetings will be separate from those of the Borrower and its Restricted Subsidiaries.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.002.00:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject The Issuer may designate any ------------------------- Subsidiary of the Issuer to the exclusions in the proviso in the definition of “be an "Unrestricted Subsidiary”" as provided below in which event such Subsidiary and each other Person that is then, or thereafter becomes, a Subsidiary of such Subsidiary will be deemed to be an Unrestricted Subsidiary. "Unrestricted Subsidiary" means (1) any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated such by the Board of Directors as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that set forth below where (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable default with respect to any Indebtedness Debt of such Subsidiary or any Subsidiary of such Subsidiary (including any right which the holders thereof may have to take enforcement action against such Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Debt in a principal amount in excess of $10.0 million of the Issuer and its Subsidiaries (other than Non-Recourse Debt. The designation of any another Unrestricted Subsidiary) to declare a default on such other Debt or cause the payment thereof to be accelerated or payable prior to its final scheduled maturity and (b) the Issuer could make a Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation Payment in an amount equal to the net greater of the fair market value and book value of such Subsidiary pursuant to Section 1011 and such amount is thereafter treated as a Restricted Payment for the Borrower’s investment thereinpurpose of calculating the aggregate amount available for Restricted Payments thereunder and (2) any Subsidiary of an Unrestricted Subsidiary. The designation Board of Directors may not designate a Subsidiary to be an Unrestricted Subsidiary if such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property of, any other Subsidiary of the Issuer which is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary. The Board of Directors may designate any Unrestricted Subsidiary as a Restricted Subsidiary and shall constitute the incurrence at the time of be deemed to have made such designation of any Indebtedness or Liens of such Restricted Subsidiary existing if at such timetime the condition set forth in clause (a) in the definition of "Unrestricted Subsidiary" shall cease to be true.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be (a) Unless designated as an Unrestricted Subsidiary and any Unrestricted in accordance with this Section 5.16, each Subsidiary may of Kodiak Corp shall be designated classified as a Restricted Subsidiary upon delivery Subsidiary. Kodiak Corp may at any time designate by written notification thereof to the Administrative Agent of written notice from the Borrower; provided that any Subsidiary (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (cKodiak Borrower) no Subsidiary may be designated as an Unrestricted Subsidiary if it (i) prior, and after giving effect, to such designation (including after giving effect to the reclassification of any Investments in, Indebtedness of, and/or Liens on the assets of, such Subsidiary), no Event of Default exists, (ii) such designation is deemed to be an Investment in an Unrestricted Subsidiary in an amount equal to the fair market value as of the date of such designation of the applicable Obligor’s direct and indirect ownership interest in such Subsidiary and such Investment would be permitted to be made at the time of such designation under Section 6.04 and (iii) such Subsidiary is not a guarantor of any Indebtedness (other than of such Unrestricted Subsidiary’s own Subsidiaries) in excess of $75,000,000. (b) Kodiak Corp may designate any Subsidiary which is then an Unrestricted Subsidiary to be a Restricted Subsidiary by (i) providing the Administrative Agent with written notice of such redesignation and thereafter (ii) causing such Subsidiary to comply with the requirements of Section 5.15, if applicable, at which time, such Subsidiary shall cease to be an “Unrestricted Subsidiary” and shall become a “Restricted Subsidiary” for purposes of this Agreement and the other Loan Documents without any amendment, modification or other supplement to any of the Priority Lien Notes Documentsforegoing. (c) No Obligor may (i) transfer any contract or agreement constituting a Material Designated Contract (as determined immediately prior to such transfer) to an Unrestricted Subsidiary (whether by Investment, the ABL Credit Documents Restricted Payment, disposition or otherwise) or (ii) designate a Restricted Subsidiary that is party to any documents evidencing any Permitted Refinancing Indebtedness contract or any Subordinated Indebtedness and agreement constituting a Material Designated Contract (as determined immediately prior to such designation) as an Unrestricted Subsidiary. (d) each The Unrestricted Subsidiaries may not hold or exclusively license (or receive from the Obligors or any Restricted Subsidiary Subsidiary), individually or in the aggregate, any Material Intellectual Property. (e) The Obligors will cause the management, business and affairs of Kodiak Corp and its Restricted Subsidiaries to be designated as an conducted in such a manner (including, without limitation, by keeping separate books of account, furnishing separate balance sheets and income statements of Unrestricted Subsidiaries to creditors and potential creditors thereof (to the extent required hereunder) and by not permitting properties of Unrestricted Subsidiaries to be commingled with those of the Obligors) so that each Unrestricted Subsidiary that is a corporation will be treated as a corporate entity separate and distinct from Parent and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtRestricted Subsidiaries. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of Obligors will not permit any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of to hold any Equity Interest in, or any Indebtedness of, Kodiak Corp, the Kodiak Borrower or Liens of such any Restricted Subsidiary existing at such timeSubsidiary.

Unrestricted Subsidiaries. Subject (a) The Borrower may designate any Subsidiary of the Borrower (other than a Borrower or any direct or indirect parent of a Borrower) that at the time of determination shall be designated by the Board of Directors of the Borrower or any Parent Holding Company in the manner provided, and subject to the exclusions in restrictions set forth in, clause (b) below. (b) The Board of Directors of the proviso in Borrower or any Parent Holding Company may designate any Subsidiary of the definition of “Unrestricted Subsidiary”, Borrower (including any Restricted Subsidiary may be designated as an Unrestricted existing Subsidiary and any Unrestricted newly acquired or newly formed Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower, but excluding any Borrower or any direct or indirect parent of the Borrower) to be an Unrestricted Subsidiary; provided provided, that (a) immediately before and after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes continuing as a result of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment under Section 7.02 by the Borrower (or its applicable Restricted Subsidiary) therein at the date of designation in an amount equal to the net book value Fair Market Value of the Borrower’s or the applicable Restricted Subsidiary’s investment therein. . (c) The designation Board of Directors of the Borrower or any Parent Holding Company may designate any Unrestricted Subsidiary as to be a Restricted Subsidiary shall constitute the incurrence (a “Subsidiary Redesignation”). Any Indebtedness of such Subsidiary and any Liens encumbering its assets at the time of such designation shall be deemed newly incurred or established, as applicable, at such time the Fair Market Value of the Borrower’s or such Restricted Subsidiaries’ investment therein at the time of redesignation shall constitute a return on any Indebtedness or Liens investment therein. For the avoidance of doubt, the Borrower may not be designated as an Unrestricted Subsidiary at any time; provided, however, that any Co-Borrower that has ceased to be a Co-Borrower pursuant to Section 11.03 prior to the effectiveness of such Restricted designation may be designated as an Unrestricted Subsidiary existing at (provided that such timedesignation is otherwise permitted hereunder).

Unrestricted Subsidiaries. Subject to (a) The Borrower may at any time designate, by a certificate executed by a Responsible Officer of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Borrower, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (ii) the Borrower is in pro forma compliance with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately and (iii) after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio (A) such Unrestricted Subsidiary shall be equal to or less have no Indebtedness other than 2.50:1.00Non-Recourse Debt, (cB) neither the Borrower nor any Restricted Subsidiary will have any direct or indirect obligation for any obligation or liability of such Unrestricted Subsidiary and (C) neither the Borrower nor any Restricted Subsidiary will be required to maintain or preserve such Unrestricted Subsidiary’s financial condition or cause such Unrestricted Subsidiary to achieve any specified level of operating results, (iv) such Unrestricted Subsidiary does not own, directly or indirectly, any Equity Interests of the Borrower or any Restricted Subsidiary, (v) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the purpose of any Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents Borrower or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness its Restricted Subsidiaries and (dvi) each Restricted Subsidiary the total assets of all Unrestricted Subsidiaries shall be less than 10% of Consolidated Total Assets immediately after giving effect to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of such designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower or the relevant Restricted Subsidiary (as applicable) therein at the date of designation in an amount equal to the net book fair market value of the Borrowerall such Person’s investment outstanding Investment therein. . (b) The designation of Borrower may at any time designate any Unrestricted Subsidiary as to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary shall constitute of any outstanding Indebtedness of such Unrestricted Subsidiary and an incurrence of Liens by a Restricted Subsidiary on the incurrence property of such Unrestricted Subsidiary, and such designation will only be permitted if (i) such Indebtedness is permitted under Section 7.02 and such Liens are permitted under Section 7.01, (ii) no Default or Event of Default would be in existence immediately following such designation, (iii) all representations and warranties herein will be true and correct in all material respects as if remade at the time of designation of any Indebtedness or Liens such designation, except to the extent such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects as of such Restricted earlier date, (iv) the Borrower is in pro forma compliance with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b), and (v) such Subsidiary existing at such timebecomes a Loan Party to the extent required by Section 6.12.

Unrestricted Subsidiaries. Subject to (a) The Company may designate a subsidiary (including a newly formed or newly acquired subsidiary) of the exclusions in the proviso in the definition Company or any of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated its Subsidiaries as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before after giving effect to the transaction, the Company could incur $1.00 of additional Indebtedness pursuant to the first sentence of Section 4.03 and (ii) such designation is at the time permitted under Section 4.05. Notwithstanding any provisions of this covenant all subsidiaries of an Unrestricted Subsidiary will be Unrestricted Subsidiaries. (b) The Company will not, and will not permit any of its Subsidiaries to, take any action or enter into any transaction or series of transactions that would result in a Person (other than a newly formed subsidiary having no outstanding Indebtedness (other than Indebtedness to the Company or a Subsidiary) at the date of determination) becoming a Subsidiary (whether through an acquisition, the redesignation of an Unrestricted Subsidiary or otherwise) unless, after giving effect to such designationaction, transaction or series of transactions on a pro forma basis, (i) the Company could incur at least $1.00 of additional Indebtedness pursuant to the first sentence of Section 4.03 and (ii) no Default or Event of Default shall have occurred would occur. (c) Subject to Sections 4.12(a) and be continuing, (b) other than for purposes ), an Unrestricted Subsidiary may be redesignated as a Subsidiary. The designation of designating a Restricted Subsidiary subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, or the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as designation of an Unrestricted Subsidiary as a Subsidiary in compliance with this Section 4.12 shall be made by the Board of Directors pursuant to a Board Resolution delivered to the Trustee and shall be effective as of the date specified in such Board Resolution, which shall not be prior to the date such Board Resolution is delivered to the Trustee. Any Unrestricted Subsidiary shall become a Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to incurs any Indebtedness other than Non-Recourse DebtIndebtedness. The designation If at any time Indebtedness of any Restricted Subsidiary as an Unrestricted Subsidiary which was Non-Recourse Indebtedness no longer so qualifies, such Indebtedness shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal be deemed to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any have been incurred when such Non-Recourse Indebtedness or Liens of such Restricted Subsidiary existing at such timebecomes Indebtedness.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Restricted (a) The Loan Parties shall only designate or redesignate a Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery after the Closing Date by written notice from the Borrower to the Administrative Agent of written notice from if such designation or redesignation is in compliance with the Borrower; provided that following conditions: (ai) immediately before and after such designationdesignation (or redesignation), (x) no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately continuing or shall exist after giving effect to such designation, designation and (y) the Borrower shall be in compliance with the Financial Condition Covenant on a Pro Forma BasisBasis (for purposes of such compliance at any time prior to September 30, 2016, the Total maximum First Lien Leverage Ratio permitted under the Financial Condition Covenant shall be equal deemed to or less than 2.50:1.00be 5.75:1.00), (cii) no Subsidiary may be designated (or redesignated) as an Unrestricted Subsidiary if if, after such designation (or redesignation), it is would be a “Restricted Subsidiary” for purposes the purpose of any of the Priority Lien Notes DocumentsSpecified Junior Debt Facility, the ABL Credit Documents any Incremental Facility or any documents evidencing any Permitted Refinancing Indebtedness Incremental Equivalent Debt, (iii) the designation (or any Subordinated Indebtedness and (dredesignation) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower applicable Group Members therein at the date of designation (or redesignation) in an amount equal to the net book value Fair Market Value of the Group Members’ Investment therein, and (iv) the Borrower shall have delivered to the Administrative Agent an officer’s certificate executed by a Responsible Officer of the Borrower’s investment therein. The designation , certifying compliance with the requirements of any the preceding clauses (i) through (iii); provided, that no Unrestricted Subsidiary that has been designated as a Restricted Subsidiary may again be designated as an Unrestricted Subsidiary. (b) The Loan Parties shall constitute only designate an Unrestricted Subsidiary as Restricted Subsidiary after the Closing Date by written notice from the Borrower to the Administrative Agent if (i) immediately before and after such designation, (x) no Event of Default shall have occurred and be continuing or shall exist after giving effect to such designation and (y) the Borrower shall be in compliance with the Financial Condition Covenant on a Pro Forma Basis (for purposes of such compliance at any time prior to September 30, 2016, the maximum First Lien Leverage Ratio permitted under the Financial Condition Covenant shall be deemed to be 5.75:1.00), (ii) the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timetime is permitted under Sections 7.2 and 7.3, respectively, and (iii) the Borrower shall have delivered to the Administrative Agent an officer’s certificate executed by a Responsible Officer of the Borrower, certifying compliance with the requirements of the preceding clauses (i) and (ii).

Unrestricted Subsidiaries. Subject to The Credit Parties shall not: (a) designate any Subsidiary of the exclusions in Borrower formed or acquired after the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated Closing Date (other than an OpCo Obligor) as an Unrestricted Subsidiary unless: (i) neither such Subsidiary nor any of its Subsidiaries has any Indebtedness except Non-Recourse Debt; (ii) neither such Subsidiary nor any of its Subsidiaries is a party to any agreement, arrangement, understanding or other transaction with any Credit Party or any Restricted Subsidiary, except those agreements and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to other transactions permitted under Section 8.6; (iii) at the Administrative Agent time of written notice from the Borrower; provided that (a) such designation and immediately before and after such designationgiving effect thereto, no Default or Event of Default shall have occurred and be continuing; (iv) neither such Subsidiary nor any of its Subsidiaries owns any Indebtedness (excluding any accounts payable in the ordinary course of business) or Capital Stock of, or is the beneficiary of any Lien on any property of, any Credit Party or any Restricted Subsidiary; (v) at or immediately prior to such designation and as of any relevant date of determination (1) the assets of such Subsidiary together with the assets of all other Unrestricted Subsidiaries (other than the Bostco Joint Venture or Frontera) do not constitute more than five percent (5%) of the Consolidated Net Tangible Assets as determined at the time of such designation and (2) the revenues of such Subsidiary together with the aggregate revenues of all other Unrestricted Subsidiaries (other than the Bostco Joint Venture or Frontera) do not constitute more than five percent (5%) of the aggregate revenues of the OpCo Credit Agreement Borrower and its consolidated Restricted Subsidiaries as determined at the time of such designation; (vi) at or immediately prior to such designation, the Borrower delivers a certificate to the Agent certifying (A) the name of such Subsidiary and of all of such Subsidiary’s Subsidiaries, (bB) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, that before and immediately after giving effect to such designation, the Credit Parties and the Restricted Subsidiaries shall be in compliance, on a Pro Forma Basispro forma basis, with the Total Leverage Ratio shall be equal covenant set forth in Section 7.1, and (C) that all requirements of this Section 8.9(a) have been met for such designation; (vii) at or immediately prior to or less than 2.50:1.00such designation, (c) no such Subsidiary may be is also designated as an “Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of or the Priority Lien Notes Documents, equivalent thereof under the ABL OpCo Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and Agreement; and (dviii) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an such Unrestricted Subsidiary shall constitute an be capitalized solely with cash or Cash Equivalents and no Investment under Section 7.02 by the Borrower therein at the date may be made in and no sale, transfer, license, lease or other disposition may be made to any Unrestricted Subsidiary unless such Investment or sale, transfer, license, lease or other disposition shall consist of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of cash or Cash Equivalents. (b) designate any Unrestricted Subsidiary as a Restricted Subsidiary unless: (i) the representations and warranties of the Credit Parties set forth in this Credit Agreement and in the other Credit Documents shall constitute be true and correct in all material respects (provided that if any representation or warranty already includes a materiality or material adverse effect or change qualifier, such representation or warranty shall be true and correct in all respects) on and as of the incurrence date of such designation, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date of such designation, such representations and warranties shall continue to be true and correct in all material respects as of such specified earlier date; (ii) at the time of such designation and immediately after giving effect thereto, no Default or Event of any Indebtedness Default shall have occurred and be continuing; (iii) the Credit Parties comply with Section 6.5 of the Credit Agreement; and (iv) at or Liens immediately prior to such designation, the Borrower delivers a certificate to the Agent certifying (A) the name of such Subsidiary and of all of such Subsidiary’s Subsidiaries, (B) that before and immediately after giving effect to such designation, the Credit Parties and the Restricted Subsidiary existing at Subsidiaries shall be in compliance, on a pro forma basis, with the covenant set forth in Section 7.1, and (C) that all requirements of Section 8.9(b) have been met for such timedesignation.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any No Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any on or following the Closing Date. (a) Any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerBorrower and (b) those Subsidiaries identified in the definition of Unrestricted Subsidiary may continue to be Unrestricted Subsidiaries hereunder; provided that that, in respect to each of clauses (a) and (b), (i) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (ciii) no Subsidiary may continue to be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness (other than this Agreement) and (div) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not not, at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than (x) Non-Recourse Debt or (y) to the extent it does not constitute Non-Recourse Debt, the Wilpinjong Mandatory Offer. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute constituted an Investment under Section 7.02 by the Borrower therein at the date of designation under the Existing Credit Agreement in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject To the extent agreed upon in writing by the Administrative Agent and the Required Lenders and subject to terms and conditions satisfactory to the exclusions in Required Lenders, the proviso in the definition of “Unrestricted Subsidiary”, Borrower may designate any Restricted Subsidiary may be designated of Holdings acquired or formed after the Closing Date as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that provided, that, (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuingcontinuing or would result therefrom, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately before and after giving effect to such designation, the Borrower shall be in compliance on a Pro Forma Basispro forma basis with the covenants set forth in Section 7.1, recomputed for the Total Leverage Ratio shall be equal most recent Reference Period for which financial statements have been delivered (or are required to or less than 2.50:1.00have been delivered), (ciii) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of (or other similar term) under any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Subordinated Indebtedness or any Subordinated Indebtedness and other material Indebtedness, (div) each no Restricted Subsidiary to may be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee if such Subsidiary is a Loan Party or otherwise become directly or indirectly liable owns any stock of, or holds a Lien on, any property of, Borrower, any Loan Party or any Restricted Subsidiary that is not a Subsidiary to be so designated as an Unrestricted Subsidiary, (v) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if such Subsidiary owns (and no Loan Party or Restricted Subsidiary may transfer to any Unrestricted Subsidiary) any Intellectual Property of the Loan Parties, (vi) Borrower shall deliver to Administrative Agent at least five (5) Business Days prior to such designation a certificate of a Responsible Officer of Borrower, demonstrating compliance with the foregoing clauses (i) through (v) of this Section 6.14 and, if applicable, certifying that such Subsidiary meets the requirements of an “Unrestricted Subsidiary” and (vii) at least ten (10) days prior to the designation of any Unrestricted Subsidiary as a Restricted Subsidiary, the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA Patriot Act, with respect to any Indebtedness other than Non-Recourse Debtsuch Subsidiary. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower Loan Parties therein at the date of designation designation, in an amount equal to the net book fair market value of the Borrower’s investment thereinapplicable Loan Parties’ Investment in such Subsidiary; provided, that, upon a designation of such Unrestricted Subsidiary as a Restricted Subsidiary (including by means of a transfer of assets of an Unrestricted Subsidiary to a Restricted Subsidiary or a combination of an Unrestricted Subsidiary with a Restricted Subsidiary in which the Restricted Subsidiary survives), the Loan Parties shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to (i) the lesser of (A) the fair market value of the Investments of the Loan Parties and their Restricted Subsidiaries in such Unrestricted Subsidiary at the time of such designation, combination or transfer (or of the assets transferred or conveyed, as applicable) and (B) the fair market value of Investments of the Loan Parties and their Restricted Subsidiaries made in connection with the designation of such Restricted Subsidiary as an Unrestricted Subsidiary minus (ii) the portion (proportionate to the Loan Parties’ and their Subsidiaries’ Capital Stock in such resulting Restricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence or making, as applicable, at the time of designation of any Investments, Indebtedness or Liens of such Restricted Subsidiary existing at such time. An Unrestricted Subsidiary that has subsequently been designated as a Restricted Subsidiary may not be redesignated as an Unrestricted Subsidiary.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, (a) The Parent Entity may at any time designate any Restricted Subsidiary may be designated (other than a Borrower) as an Unrestricted Subsidiary and or designate (or re-designate, as the case may be) any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that provided, that: (ai) immediately before and after such designation (or re-designation), no Default or Event of Default shall have occurred and be continuing, unless such re-designation is otherwise required under this Agreement; (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary the Parent Entity shall be in connection with a Permitted Securitization Program, immediately after giving effect to such designationcompliance, on a Pro Forma Basis, with Section 6.09 as of the Total Leverage Ratio shall be equal last day of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or less than 2.50:1.00, (cb); (iii) no Subsidiary may be designated as an Unrestricted Subsidiary if such Subsidiary or any of its Subsidiaries owns any Equity Interests of, or owns or holds any Lien on any property of, any Borrower or any Restricted Subsidiary of the Parent Entity that is not a Subsidiary of the Subsidiary to be so designated or if such Subsidiary has Indebtedness outstanding that is recourse to the Parent Entity or any Restricted Subsidiary; and (iv) no Subsidiary may be designated as an Unrestricted Subsidiary if, after such designation, it is would be a “Restricted Subsidiary” for purposes the purpose of any Material Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and Loan Party. (db) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any a Restricted Subsidiary as an Unrestricted Subsidiary shall constitute be deemed to be an Investment under Section 7.02 by the Borrower therein at the date of designation Parent Entity in an Unrestricted Subsidiary in an amount equal to the net book value Fair Market Value of such Unrestricted Subsidiary at the Borrower’s investment thereintime of such designation. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall will constitute (i) a deemed return of Investment to the Parent Entity in an amount equal to the lesser of (x) the original amount of all Investments made by the Parent Entity and its Restricted Subsidiaries in such Unrestricted Subsidiary and (y) the Fair Market Value of the Parent Entity’s and is Restricted Subsidiaries’ Investments in such Unrestricted Subsidiary at such time and (ii) the incurrence at the time of designation of any Indebtedness or and Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any (a) Each Subsidiary shall be a Restricted Subsidiary may be unless it is designated by a Borrower as an Unrestricted Subsidiary pursuant to, and meets the requirements set forth in, this Section 5.17. (b) After the Closing Date, any Borrower may designate a Subsidiary that is not a Regulated Subsidiary as an “Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery Subsidiary” by written notification thereof to the Administrative Agent of written notice from the Borrower; Agent, provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary the Borrowers are in connection pro forma compliance with a Permitted Securitization Program, the financial covenants set forth in Sections 6.13 and 6.14 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrowers for which financial statements have been delivered pursuant to Section 5.01(a) or (b) (or Section 3.01(d)), and (iii) immediately before and after such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be newly-designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time Loan Parties shall be in compliance with the applicable requirements of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtSection 6.15. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower Borrowers or the relevant Restricted Subsidiary (as applicable) therein at the date of designation in an amount equal to the net book fair market value of the Borrowerall such Person’s investment outstanding Investment therein. The designation of . (c) Any Borrower may at any time designate any Unrestricted Subsidiary as to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Debt by a Restricted Subsidiary shall constitute of any outstanding Debt of such Unrestricted Subsidiary and an incurrence of Liens by a Restricted Subsidiary on the incurrence property of such Unrestricted Subsidiary, and such designation will only be permitted if (i) such Debt is permitted under Section 6.02 and such Liens are permitted under Section 6.01, (ii) no Default or Event of Default would be in existence immediately following such designation, (iii) all representations and warranties set forth in the Loan Documents will be true and correct in all material respects (provided that to the extent any representation and warranty is qualified as to “Material Adverse Change” or otherwise as to “materiality”, such representation and warranty is true and correct in all respects) as if remade at the time of designation of such designation, except to the extent such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects (provided that to the extent any Indebtedness representation and warranty is qualified as to “Material Adverse Change” or Liens otherwise as to “materiality”, such representation and warranty is true and correct in all respects) as of such Restricted earlier date, (iv) the Borrowers are in pro forma compliance with the financial covenants set forth in Sections 6.13 and 6.14 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrowers for which financial statements have been delivered pursuant to Section 5.01(a) or (b) (or Section 3.01(d)) and (v) such Subsidiary existing at such timebecomes a Loan Party to the extent required by Section 5.11.

Unrestricted Subsidiaries. Subject (a) Schedule 6.08 sets forth those Subsidiaries that have been designated as Unrestricted Subsidiaries as of the date hereof, which Subsidiaries do not include any Guarantor. The Borrower may designate any of its Subsidiaries (other than a Guarantor) as Unrestricted Subsidiaries from time to time in compliance with the exclusions in provisions of this Section 6.08. The Borrower will not designate any of its Subsidiaries as an Unrestricted Subsidiary unless at the proviso in the definition of “Unrestricted Subsidiary”, any Restricted time such Subsidiary may be is designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately Subsidiary, before and after giving effect to such designationdesignation on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes as certified in a certificate of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect Responsible Officer delivered to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not Administrative Agent at the time of such designation, and does not thereafter, create, incur, issue, assume, guarantee . Such certificate also shall state the specific purpose for which such designation is being made. All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted Subsidiaries. (b) The Borrower may designate or otherwise become directly or indirectly liable with respect to any Indebtedness other than Nonre-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of designate any Unrestricted Subsidiary as a Restricted Subsidiary from time to time in compliance with the provisions of this Section 6.08. The Borrower will not designate or re-designate any Unrestricted Subsidiary as a Restricted Subsidiary, unless at the time such Unrestricted Subsidiary is so designated or re-designated as a Restricted Subsidiary, after giving effect to such designation or re-designation on a pro forma basis, no Event of Default shall constitute have occurred and be continuing, as certified in a certificate of a Responsible Officer delivered to the incurrence Administrative Agent at the time of such designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timere-designation.

Unrestricted Subsidiaries. Subject (a) The Board of Directors of Borrower may at any time designate any Subsidiary of Borrower (other than any Loan Party) to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, if no Default or Event of Default shall have has occurred and be continuingis continuing or would result therefrom. If a Subsidiary of Borrower is designated as an Unrestricted Subsidiary, (b) other than for purposes the aggregate Fair Market Value of designating a all outstanding Investments of Borrower and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be deemed to be an Investment made as of the time of the designation and shall reduce the amount available for Restricted Payments under Section 6.9 or under one or more clauses of the definition of Permitted Investments, as determined by Borrower, by an amount equal to or less than 2.50:1.00the amount of such Investment. The designation of a Subsidiary of Borrower as an Unrestricted Subsidiary shall only be permitted if the Investment would be permitted by this Agreement at the time of designation and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Additionally, (c) no Subsidiary of Borrower may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for the purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents Senior Note Document or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary incurred to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debtrefinance such Indebtedness. The Any designation of any Restricted a Subsidiary of Borrower as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 be evidenced to Agent by the Borrower therein at the date submitting to Agent a certified copy of designation in an amount equal to the net book value a resolution of the BorrowerBoard of Directors of Borrower giving effect to such designation and an Officer’s investment thereinCertificate certifying that such designation complied with the requirements and conditions set forth in this clause (a) and was permitted by Section 6.9. The designation of If, at any time, any Unrestricted Subsidiary fails to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness of such Subsidiary and Liens on such Subsidiary’s assets shall be deemed to be incurred by a Restricted Subsidiary of Borrower as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 6.1 or such Liens are not permitted to be incurred as of such date under Section 6.2, an Event of Default shall constitute immediately arise. (b) The Board of Directors of Borrower may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of Borrower; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Borrower of any outstanding Indebtedness of such Unrestricted Subsidiary and the incurrence of Liens on the assets of a Restricted Subsidiary of Borrower of any Liens on such Unrestricted Subsidiary’s assets, and such designation will only be permitted if (i) such Indebtedness is permitted under Section 6.1 and such Liens are permitted under Section 6.2, calculated on a pro forma basis as if such designation had occurred at the time beginning of designation the applicable reference period; and (ii) no Default or Event of any Indebtedness Default has occurred and is continuing or Liens of such Restricted Subsidiary existing at such timewould result therefrom.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be (a) Unless designated as an Unrestricted Subsidiary in accordance with Section 8.17(b), any Person that becomes a Domestic Subsidiary of the Borrower or any of its Restricted Subsidiaries shall be classified as a Restricted Subsidiary. (b) The Borrower may designate by written notification thereof to the Administrative Agent, any Person that would otherwise be a Restricted Subsidiary of the Borrower, including a newly formed or newly acquired Person that would otherwise be a Restricted Subsidiary of the Borrower, as an Unrestricted Subsidiary if (i) prior, and after giving effect, to such designation, neither a Default nor a Borrowing Base Deficiency would exist, (ii) such Person does not own or operate any Oil and Gas Properties included in the most recently delivered Reserve Report for which a Borrowing Base has been established, other than Oil and Gas Properties permitted to be sold or otherwise transferred pursuant to Section 9.10 (which shall count as a Transfer thereunder), (iii) such Person is not a guarantor or the primary obligor with respect to any Permitted Additional Debt, Permitted Pari Term Loan Debt or any Permitted Refinancing thereof unless such Person will be released contemporaneously with such designation, (iv) such Person is not a party to any agreement, contract, arrangement or understanding with the Borrower or any Subsidiary unless the terms of such agreement, contract, arrangement or understanding are permitted by Section 9.11, (v) such designation is deemed to be an Investment in an Unrestricted Subsidiary and such Investment would be permitted to be made under Section 9.05(k) and (vi) the Administrative Agent shall have received a certificate of a Responsible Officer certifying that such designation complies with the requirements of this Section 8.17(b). For purposes of the foregoing, the designation of a Person as an Unrestricted Subsidiary shall be deemed to be the designation of all present and future subsidiaries of such Person as Unrestricted Subsidiaries. Except as provided in this Section 8.17(b), no Restricted Subsidiary may be designated redesignated as a Restricted an Unrestricted Subsidiary. For the avoidance of doubt, the Borrower may designate any Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary directly owns Qualified Midstream Assets as an Unrestricted Subsidiary in connection accordance with the requirements of this Section 8.17(b). (c) The Borrower may designate any Unrestricted Subsidiary to be a Permitted Securitization Program, immediately Restricted Subsidiary if after giving effect to such designation, (i) the representations and warranties of the Credit Parties contained in each of the Loan Documents are true and correct in all material respects on a Pro Forma Basisand as of such date as if made on and as of the date of such designation (or, the Total Leverage Ratio shall be equal if stated to or less than 2.50:1.00have been made expressly as of an earlier date, were true and correct in all material respects as of such date), (cii) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes Default would exist and (iii) the Borrower complies with the requirements of any of the Priority Lien Notes DocumentsSection 8.14, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness Section 8.18 and Section 9.11. (d) The Borrower will cause the management, business and affairs of each Restricted Subsidiary Credit Party to be designated conducted in such a manner (including, without limitation, by keeping separate books of account, furnishing separate financial statements of Unrestricted Subsidiaries to creditors and potential creditors thereof and by not permitting Properties of the Credit Parties to be commingled) so that each Unrestricted Subsidiary will be treated as an entity separate and distinct from Credit Parties; (e) The Borrower will cause each Unrestricted Subsidiary (i) to refrain from maintaining its assets in such a manner that would make it costly or difficult to segregate, ascertain or identify as its individual assets from those of any other Credit Party and its Subsidiaries has not at the time of designation(ii) to observe all corporate formalities; (f) The Borrower will not, and does will not thereafter, createpermit any other Credit Party to, incur, issue, assume, guarantee or otherwise be or become directly or indirectly liable with respect to for any Indebtedness other than Non-Recourse Debt. The designation Debt of any Restricted Subsidiary as of the Unrestricted Subsidiaries except to the extent permitted by this Agreement; (g) The Borrower will not, and will not permit any other Credit Party to, permit any credit agreement for a senior credit facility, a loan agreement for a senior credit facility, a note purchase agreement for the sale of promissory notes or an indenture governing capital markets debt instruments pursuant to which any Credit Party is a borrower, issuer or guarantor (the “Relevant Debt”), the terms of which would, upon the occurrence of a default under any Debt of an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by Subsidiary, (i) result in, or permit the holder of any Relevant Debt to declare a default on such Relevant Debt or (ii) cause the payment of any Relevant Debt to be accelerated or payable before the fixed date on which the principal of such Relevant Debt is due and payable; and (h) The Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of will not permit any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of to hold any Indebtedness Equity Interest in, or Liens of such Restricted Subsidiary existing at such timeany Debt of, any Credit Party.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerCompany; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio Payment Conditions shall be equal to or less than 2.50:1.00have been satisfied, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Term Loan Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness or Junior Lien Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower Company therein at the date of designation in an amount equal to the net book value of the BorrowerCompany’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject to (a) The Company may designate a subsidiary (including a newly formed or newly acquired subsidiary) of the exclusions in the proviso in the definition Company or any of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated its Subsidiaries as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before after giving effect to the transaction, the Company could incur $1.00 of additional Indebtedness pursuant to the first sentence of Section 4.03(a) and (ii) such designation is at the time permitted under Section 4.05. Notwithstanding any provisions of this covenant all subsidiaries of an Unrestricted Subsidiary will be Unrestricted Subsidiaries. (b) The Company will not, and will not permit any of its Subsidiaries to, take any action or enter into any transaction or series of transactions that would result in a Person (other than a subsidiary having no outstanding Indebtedness (other than Indebtedness to the Company or a Subsidiary) at the date of determination) becoming a Subsidiary (whether through an acquisition, the redesignation of an Unrestricted Subsidiary or otherwise) unless, after giving effect to such designationaction, transaction or series of transactions on a pro forma basis, (i) the Company could incur at least $1.00 of additional Indebtedness pursuant to the first sentence of Section 4.03(a) and (ii) no Default or Event of Default shall have occurred would occur. (c) Subject to Sections 4.12(a) and be continuing, (b) other than for purposes ), an Unrestricted Subsidiary may be redesignated as a Subsidiary. The designation of designating a Restricted Subsidiary subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, or the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as designation of an Unrestricted Subsidiary as a Subsidiary in compliance with this Section 4.12 shall be made by the Board of Directors pursuant to a Board Resolution delivered to the Trustee and shall be effective as of the date specified in such Board Resolution, which shall not be prior to the date such Board Resolution is delivered to the Trustee. Any Unrestricted Subsidiary shall become a Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to incurs any Indebtedness other than Non-Recourse DebtIndebtedness. The designation If at any time Indebtedness of any Restricted Subsidiary as an Unrestricted Subsidiary which was Non-Recourse Indebtedness no longer so qualifies, such Indebtedness shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal be deemed to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any have been incurred when such Non-Recourse Indebtedness or Liens of such Restricted Subsidiary existing at such timebecomes Indebtedness.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, (a) The Borrower may at any time designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (cii) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be was previously designated as an Unrestricted Subsidiary or if any of its Subsidiaries is a Restricted Subsidiary (unless such Subsidiaries are being designated as Unrestricted Subsidiaries simultaneously therewith), (iii) immediately after giving effect to such designation (A) the Borrower and the Restricted Subsidiaries shall be in compliance, on a historical pro forma basis, with the covenants set forth in Sections 8.02 and 8.12, (B) the aggregate amount of revenues of the Unrestricted Subsidiaries shall not exceed 10% of the aggregate amount of revenues of the Borrower and its Subsidiaries has on a consolidated basis, (C) the consolidated EBITDA (measured on the same basis as “Consolidated EBITDA” provided herein, but for the Unrestricted Subsidiaries only) of the Unrestricted Subsidiaries shall not at exceed 10% of the time Consolidated EBITDA (measured as if all Subsidiaries were Restricted Subsidiaries for this purpose) of the Borrower and its Subsidiaries on a consolidated basis, and (D) the aggregate amount of total assets of the Unrestricted Subsidiaries shall not exceed 10% of the total assets of the Borrower and its Subsidiaries, and (iv) prior to the effectiveness of any such designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable the Borrower shall deliver to the Administrative Agent a certificate setting forth in reasonable detail the calculations demonstrating compliance with respect to any Indebtedness other than Non-Recourse Debtthe preceding subsections (iii)(A) through (iii)(D). The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the sum of (i) the Borrower’s direct or indirect equity ownership percentage of the net book value worth of such designated Restricted Subsidiary immediately prior to such designation (such net worth to be calculated without regard to any guarantee provided by such designated Restricted Subsidiary) and (ii) without duplication, the aggregate principal amount of all Indebtedness owed by such designated Unrestricted Subsidiary and its Subsidiaries (to the extent such Subsidiaries are not previously Unrestricted Subsidiaries) to the Borrower or any Restricted Subsidiary immediately prior to such designation, all calculated, except as set forth in the parenthetical to clause (i), on a consolidated basis in accordance with GAAP (and such designation shall only be permitted to the extent such Investment is permitted under Section 8.03). (b) If at any time: (i) an Unrestricted Subsidiary becomes a guarantor of the Subordinated Notes or of any other Indebtedness of the Borrower or any Restricted Subsidiary, then the Borrower shall provide prompt notice thereof to the Administrative Agent, and in any case within 10 days of such occurrence, and such Subsidiary shall automatically become a Restricted Subsidiary and shall become a Guarantor in compliance with, and otherwise satisfy the provisions of, Section 7.12, or (ii) any of the following occurs: (x) the aggregate amount of revenues of the Unrestricted Subsidiaries exceeds 10% of the aggregate amount of revenues of the Borrower and its Subsidiaries on a consolidated basis, (y) the consolidated EBITDA (measured on the same basis as “Consolidated EBITDA” provided herein, but for the Unrestricted Subsidiaries only) of the Unrestricted Subsidiaries exceeds 10% of the Consolidated EBITDA (measured as if all Subsidiaries were Restricted Subsidiaries for this purpose) of the Borrower and its Subsidiaries on a consolidated basis, or (z) the aggregate amount of total assets of the Unrestricted Subsidiaries exceeds 10% of the total assets of the Borrower and its Subsidiaries, then in any such case the Borrower will promptly, and in any event within 10 days thereafter, designate one or more Unrestricted Subsidiaries a Restricted Subsidiaries so that, after such designation, none of the tests in subsections (i), (ii) and (iii) is then violated. (c) If at any time a Restricted Subsidiary is designated as an Unrestricted Subsidiary in compliance with this Agreement, the Administrative Agent shall be authorized to, and shall at the request of the Borrower’s investment therein. The designation , release such Unrestricted Subsidiary from any Loan Document to which it is a party, and release the Equity Interests of such Unrestricted Subsidiary from the pledge thereof pursuant to the Pledge Agreement. (d) If at any time any Unrestricted Subsidiary as is designated or becomes a Restricted Subsidiary shall constitute pursuant to the incurrence at the time terms of designation of any Indebtedness or Liens of this Agreement, such Restricted Subsidiary existing at such timeshall, to the extent required thereby, comply with the provisions of Section 7.12 within the time required therein.

Unrestricted Subsidiaries. Subject (a) The Parent Borrower may designate any Subsidiary of the Parent Borrower (other than a Borrower or any direct or indirect parent of a Borrower) that at the time of determination shall be designated by the Board of Directors of the Parent Borrower in the manner provided, and subject to the exclusions in restrictions set forth in, clause (b) below. (b) The Board of Directors of the proviso in Parent Borrower may designate any Subsidiary of the definition of “Unrestricted Subsidiary”, Parent Borrower (including any Restricted Subsidiary may be designated as an Unrestricted existing Subsidiary and any newly acquired or newly formed Subsidiary of the Parent Borrower, but excluding any Borrower or any direct or indirect parent of a Borrower) to be an Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery Subsidiary; provided, that immediately after giving effect to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes continuing as a result of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment under Section 7.02 by the Parent Borrower (or its applicable Restricted Subsidiary) therein at the date of designation in an amount equal to the net book value Fair Market Value of the Parent Borrower’s or the applicable Restricted Subsidiary’s investment therein. . (c) The designation Board of Directors of the Parent Borrower may designate any Unrestricted Subsidiary as to be a Restricted Subsidiary shall constitute the incurrence (a “Subsidiary Redesignation”). Any Indebtedness of such Subsidiary and any Liens encumbering its assets at the time of such designation shall be deemed newly incurred or established, as applicable, at such time the Fair Market Value of the Parent Borrower’s or such Restricted Subsidiaries’ investment therein at the time of redesignation shall constitute a return on any Indebtedness or Liens investment therein. For the avoidance of doubt, the no Borrower may be designated as an Unrestricted Subsidiary at any time; provided, however, that any Co-Borrower that has ceased to be a Co-Borrower pursuant to Section 11.03 prior to the effectiveness of such designation may be designated as an Unrestricted Subsidiary (provided that such designation is otherwise permitted hereunder). Notwithstanding the foregoing, (i) no ownership of intellectual property may be transferred to (including by way of an exclusive license) an Unrestricted Subsidiary by any Borrower Party to the extent such intellectual property is material to the business of the Borrower Parties (taken as a whole) after giving effect to such transfer (or exclusive license) (such intellectual property, “Material IP”) and (ii) no Restricted Subsidiary existing at may be designated an Unrestricted Subsidiary if, on the date of and after giving effect to such timedesignation, such Unrestricted Subsidiary would own (or hold an exclusive license with respect to) any Material IP; provided that the foregoing shall not restrict any Borrower Party from entering into an non-exclusive license of Material IP in the ordinary course of business.

Unrestricted Subsidiaries. Subject to The Parent may at any time after the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, Closing Date designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any or remove an Unrestricted Subsidiary may be designated Subsidiary’s designation as such (a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower“Designation Removal”); provided that (ai) immediately before and after any such designation, no Default or Event of Default shall have has occurred and be continuing, is continuing (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately including after giving effect to such designationthe reclassification of Investments in, Indebtedness of, and Liens on the assets of, the applicable Subsidiary or Unrestricted Subsidiary) and (ii) the Company shall be in compliance on a Pro Forma Basispro forma basis with Sections 9.09 through 9.11 and (iii) as of the date of the designation thereof, no Unrestricted Subsidiary shall own any Capital Stock in any Subsidiary of the Total Leverage Ratio shall be equal Parent (other than another Unrestricted Subsidiary) or hold any Indebtedness of, or any Lien on, any property of the Parent and its Subsidiaries; provided, further, that any Unrestricted Subsidiary that is re-designated as a Subsidiary pursuant to or less than 2.50:1.00, (c) no Subsidiary a Designation Removal may not subsequently be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower Parent (or its applicable Subsidiary) therein at the date of designation in an amount equal to the net book portion of the fair market value of the Borrowernet assets of such Subsidiary attributable to the Parent’s investment therein(or its applicable Subsidiary’s) equity interests therein as reasonably estimated by the Parent (and such designation shall only be permitted to the extent such Investment is permitted under Section 9.14). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary A Designation Removal shall constitute the making, incurrence or granting, as applicable, at the time of designation of any then-existing Investment, Indebtedness or Liens Lien of such Restricted Subsidiary, as applicable; provided that upon any Designation Removal, the Parent shall be deemed to have received a return on any Investment by the Parent and its Subsidiaries in the resulting Subsidiary existing in an amount equal to the portion of the fair market value of the net assets of such Subsidiary attributable to the Parent’s equity therein at the time of such timere-designation.

Unrestricted Subsidiaries. Subject to (a) The Borrower may at any time designate, by a certificate executed by a Responsible Officer of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Borrower, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (ii) the Borrower is in compliance on a Pro Forma Basis with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.1(a) or (b), and (iii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately at all times after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio such Unrestricted Subsidiary shall be equal to or less have no Indebtedness other than 2.50:1.00Non-Recourse Debt, (civ) such Unrestricted Subsidiary does not own, directly or indirectly, any Equity Interests in the Borrower or any Restricted Subsidiary and (v) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the purpose of any Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents Borrower or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each its Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtSubsidiaries. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower or the relevant Restricted Subsidiary (as applicable) therein at the date of designation in an amount equal to the net book fair market value of the Borrowerall such Person’s investment outstanding Investment therein. . (b) The designation of Borrower may at any time designate any Unrestricted Subsidiary as to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary shall constitute of any outstanding Indebtedness of such Unrestricted Subsidiary and an incurrence of Liens by a Restricted Subsidiary on the incurrence property of such Unrestricted Subsidiary then subject to any Liens, and such designation will only be permitted if (i) such Indebtedness is permitted under Section 7.2 and such Liens are permitted under Section 7.1, (ii) no Event of Default would be in existence immediately following such designation, (iii) all representations and warranties herein with respect to such designated Subsidiary will be true and correct in all material respects as if remade at the time of designation of any Indebtedness or Liens such designation, except to the extent such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects as of such Restricted earlier date, (iv) the Borrower is in compliance on a Pro Forma Basis with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.1(a) or (b) and (v) such Subsidiary existing at such timebecomes a Loan Party to the extent required by Section 6.12.

Unrestricted Subsidiaries. Subject to If any Unsecured Subsidiary incurs Unsecured Subsidiaries’ Permitted Project Debt, the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Borrower may request that such Unsecured Subsidiary may be designated as an Unrestricted Subsidiary such that the representations, covenants, Events of Default and other relevant provisions of this Agreement shall not apply in respect of such Unrestricted Subsidiary, and the Lenders agree to act reasonably in considering any such request. Any such designation shall be approved in writing by the Lenders acting unanimously, and shall be subject to the execution and delivery of an amendment to this Agreement to reflect all conditions and restrictions the Lenders acting reasonably may require. Without limiting the generality of the foregoing, such amendment may include provisions with respect to the following: • amendments to the financial covenants herein; • the assets of the Unrestricted Subsidiary may not be designated as a Restricted commingled with the assets of the other Companies; • the liabilities of the Unrestricted Subsidiary upon delivery to may not be commingled with the Administrative Agent liabilities of written notice the other Companies; • the books and records of the Unrestricted Subsidiary will be maintained separately from the Borrower; provided that (a) immediately before books and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any records of the Priority Lien Notes Documents, other Companies; • the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has the other Companies will not at the time of designationtake any action or omit to take any action which would, and does not thereafteror would reasonably be expected to, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect result in any Company becoming subject to any Indebtedness Insolvency Proceeding in respect of the Unrestricted Subsidiary by way of procedural or substantive consolidation of their estates, joint administration or any other procedure or proceeding which may result in anything other than Nona completely separate “ring-Recourse Debt. The designation fenced” administration of any Restricted Subsidiary as an the assets and liabilities of each of Unrestricted Subsidiary and the other Companies; • the other Companies shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal not be permitted to the net book value guarantee any indebtedness or other obligations of the Borrower’s investment therein. The designation Unrestricted Subsidiary; • limits on the amount of any Investments which the Companies may make in the Unrestricted Subsidiary; • all dealings between the Companies and the Unrestricted Subsidiary as must be on a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timecommercially reasonable basis; and • ancillary amendments.

Unrestricted Subsidiaries. Subject to (a) The Borrower may at any time designate, by a certificate executed by a Responsible Officer of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Borrower, any Restricted Subsidiary may be designated Subsidiary, including a newly formed or newly acquired Subsidiary, as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ax) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (by) other the Borrower is in Financial Covenant Compliance immediately after giving effect to such designation as of the most recent Date of Determination and (z) the total assets of all Unrestricted Subsidiaries shall be less than for purposes 15% of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, Consolidated Total Assets immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 investment by the Borrower or the relevant Restricted Subsidiary (as applicable) therein at the date of designation in an amount equal to the net book aggregate fair market value of the Borrowerall such Person’s outstanding investment therein. The . (b) Any designation of a Subsidiary as an Unrestricted Subsidiary will be evidenced to the Administrative Agent by delivering to the Administrative Agent an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 6.04. If, at any time, any Unrestricted Subsidiary should fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for the purposes of this Agreement (subject to the Administrative Agent approval, that shall not be unreasonably withheld) and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary shall constitute as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 6.01, the Borrower will be in default of such covenant. (c) The Borrower may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (i) such designation will be deemed to be an incurrence at the time of designation Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness or Liens of such Restricted Subsidiary existing at Unrestricted Subsidiary, and such timedesignation will only be permitted if such Indebtedness is permitted under Section 6.01, (ii) no Default or Event of Default would be in existence immediately following such designation and (iii) the Borrower is in Financial Covenant Compliance immediately after giving effect to such designation as of the most recent Date of Determination.

Unrestricted Subsidiaries. Subject to The Borrower may at any time after the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, Closing Date designate (or redesignate) any Restricted Subsidiary may be designated subsidiary as an Unrestricted Subsidiary and any or remove an Unrestricted Subsidiary may be designated Subsidiary’s designation as such (a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower“Designation Removal”); provided that (ai) immediately before and after any such designation, no Default or Event of Default shall have occurred and be continuing, exists (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately including after giving effect to such designationthe reclassification of Investments in, Indebtedness of, and Liens on a Pro Forma Basisthe assets of, the Total Leverage Ratio shall be equal to applicable Subsidiary or less than 2.50:1.00Unrestricted Subsidiary) and (ii) as of the date of the designation thereof, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of shall own any Capital Stock in any Subsidiary of the Priority Lien Notes DocumentsBorrower or hold any Indebtedness of, the ABL Credit Documents or any documents evidencing Lien on, any Permitted Refinancing Indebtedness property of the Borrower or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtSubsidiaries. The designation of any Restricted Subsidiary subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower (or its applicable Subsidiary) therein at the date of designation in an amount equal to the net book portion of the fair market value of the net assets of such Subsidiary attributable to the Borrower’s investment therein(or its applicable Subsidiary’s) equity interest therein as reasonably estimated by the Borrower (and such designation shall only be permitted to the extent such Investment is permitted under Section 7.7). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary A Designation Removal shall constitute the making, incurrence or granting, as applicable, at the time of designation of any then-existing Investment, Indebtedness or Liens Lien of such Restricted subsidiary, as applicable; provided that upon any Designation Removal, the Borrower shall be deemed to continue to have an Investment in the resulting Subsidiary existing in an amount (if positive) equal to (a) the Borrower’s “Investment” in such Subsidiary at the time of such timere-designation, less (b) the portion of the fair market value of the net assets of such Subsidiary attributable to the Borrower’s equity therein at the time of such re-designation.

Unrestricted Subsidiaries. Subject to (a) The Borrower may at any time designate, by a certificate executed by a Responsible Officer of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Borrower, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (ii) the Borrower is in pro forma compliance with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately and (iii) at all times after giving effect to such designation, on a Pro Forma Basis(A) such Unrestricted Subsidiary shall have no Indebtedness other than Non-Recourse Debt, the Total Leverage Ratio shall be equal to or less other than 2.50:1.00as contemplated by Section 7.02(d)(iii), (cB) neither the Borrower nor any Restricted Subsidiary will have any direct or indirect obligation for any obligation or liability of such Unrestricted Subsidiary, other than as contemplated by Section 7.02(d)(iii) and (C) neither the Borrower nor any Restricted Subsidiary will be required to maintain or preserve such Unrestricted Subsidiary’s financial condition or cause such Unrestricted Subsidiary to achieve any specified level of operating results, (iv) such Unrestricted Subsidiary does not own, directly or indirectly, any Equity Interests in the Borrower or any Restricted Subsidiary and (v) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the purpose of any Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents Borrower or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each its Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtSubsidiaries. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower or the relevant Restricted Subsidiary (as applicable) therein at the date of designation in an amount equal to the net book fair market value of the Borrowerall such Person’s investment outstanding Investment therein. . (a) The designation of Borrower may at any time designate any Unrestricted Subsidiary as to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary shall constitute of any outstanding Indebtedness of such Unrestricted Subsidiary and an incurrence of Liens by a Restricted Subsidiary on the incurrence property of such Unrestricted Subsidiary then subject to any Liens, and such designation will only be permitted if (i) such Indebtedness is permitted under Section 7.02 and such Liens are permitted under Section 7.01, (ii) no Default or Event of Default would be in existence immediately following such designation, (iii) all representations and warranties herein will be true and correct in all material respects as if remade at the time of designation of any Indebtedness or Liens such designation, except to the extent such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects as of such Restricted earlier date, (iv) the Borrower is in pro forma compliance with the financial covenants set forth in Section 7.11 immediately after giving effect to such designation as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 6.01(a) or (b) and (v) such Subsidiary existing at such timebecomes a Loan Party to the extent required by Section 6.12.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition (a) The Board of “Directors may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) an Unrestricted Subsidiary”, Subsidiary so long as: (i) neither Baytex nor any Restricted Subsidiary may is directly or indirectly liable for any Indebtedness of such Subsidiary; (ii) no default with respect to any Indebtedness of such Subsidiary would permit (upon notice, lapse of time or otherwise) any holder of any other Indebtedness of Baytex or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment thereof to be designated accelerated or payable prior to its stated Maturity; (iii) any Investment in such Subsidiary made as a result of designating such Subsidiary an Unrestricted Subsidiary and will not violate the provisions of Section 5.9; (iv) neither Baytex nor any Restricted Subsidiary has a contract, agreement, arrangement, understanding or obligation of any kind, whether written or oral, with such Subsidiary other than those that might be obtained at the time from Persons who are not Affiliates of Baytex; and (v) neither Baytex nor any Restricted Subsidiary has any obligation to subscribe for additional shares of Capital Stock or other equity interest in such Subsidiary, or to maintain or preserve such Subsidiary's financial condition or to cause such Subsidiary to achieve certain levels of operating results. (b) Baytex may designate any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; Subsidiary, provided that that: (ai) immediately before and after such designation, no Default or Event of Default shall have has occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to is continuing following such designation, on a Pro Forma Basis, ; (ii) Baytex could incur at least $1.00 of additional Indebtedness (except for Permitted Indebtedness) pursuant to the Total Leverage Ratio shall be equal to or less than 2.50:1.00, first paragraph of Section 5.8 (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to treating any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any such Unrestricted Subsidiary as the incurrence of Indebtedness by a Restricted Subsidiary shall constitute Subsidiary); and (iii) such designation is evidenced by a Board Resolution, which is filed with the incurrence at Indenture Trustee, together with an Officers' Certificate certifying that such designation complied with the time provisions of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timethis subsection (b).

Unrestricted Subsidiaries. Subject After the Closing Date, the Borrower shall have the right to the exclusions in the proviso in the definition of designate any Subsidiary from time to time as an “Unrestricted Subsidiary”” for purposes of this Agreement, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery by giving written notice thereof to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, so long as no Default or Event of Default shall have has occurred and be continuingis continuing or, after giving pro forma effect thereto, would result therefrom (b) other than for purposes of designating including, without limitation, under Section 7.04 and Section 7.07). The Borrower may redesignate any Unrestricted Subsidiary as a Restricted Subsidiary so long as no Default or Event of Default has occurred and is continuing or would result therefrom. The designation of any Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect subsequent to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes date of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary this Agreement shall constitute an Investment under Section 7.02 by the Borrower and the other Restricted Subsidiaries therein at the date of designation in an amount equal to the net book fair market value of the Borrower’s investment thereinor Restricted Subsidiary’s Investment in such Subsidiary. Upon a redesignation of any Unrestricted Subsidiary that was designated as an Unrestricted Subsidiary after the Closing Date as a Restricted Subsidiary, the Borrower and its Restricted Subsidiaries shall be deemed to continue to have an Investment in the Equity Interests of an Unrestricted Subsidiary in an amount (if positive) equal to (i) the lesser of (A) the fair market value of the Investments of the Borrower and its Restricted Subsidiaries in such Subsidiary at the time of such redesignation and (B) the fair market value of Investments of the Borrower and its Restricted Subsidiaries made in connection with the designation of such Subsidiary as an Unrestricted Subsidiary, minus (ii) the portion (proportionate to the Borrower’s and its Restricted Subsidiaries’ Equity Interests in such Subsidiary) of the fair market value of the Net Worth of such Subsidiary at the time of such redesignation. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence or making, as applicable, at the time of designation of any Indebtedness Investments, Debt or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject (a) SCHEDULE 6.08 sets forth those Subsidiaries of Guarantor that have been designated as Unrestricted Subsidiaries as of the Signing Date, which Subsidiaries do not include any Subsidiary Guarantors. Guarantor may designate any other of its Subsidiaries (other than a Subsidiary Guarantor) as Unrestricted Subsidiaries from time to time in compliance with the exclusions in provisions of this Section 6.08. Guarantor will not designate any of its Subsidiaries as an Unrestricted Subsidiary unless at the proviso in the definition of “Unrestricted Subsidiary”, any Restricted time such Subsidiary may be is designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately Subsidiary, before and after giving effect to such designationdesignation on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, as certified in an Officers’ Certificate delivered to the Administrative Agent at the time of such designation. Such Officers’ Certificate also shall state the specific purpose for which such designation is being made. All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted Subsidiaries. (b) other than for purposes of designating Guarantor may designate or redesignate any Unrestricted Subsidiary as a Restricted Subsidiary from time to time in compliance with the provisions of this Section 6.08. Guarantor will not designate or redesignate any Unrestricted Subsidiary as a Restricted Subsidiary, unless at the time such Unrestricted Subsidiary is so designated or redesignated as a Restricted Subsidiary, after giving effect to such designation or redesignation on a pro forma basis, no Event of Default shall have occurred and be continuing, as certified in an Officer’s Certificate delivered to the Administrative Agent at the time of such designation or redesignation. (c) Notwithstanding anything to the contrary above in this Section 6.08, so long as a Lender is also a lender under the Time Warner Credit Agreement, any Officer’s Certificate delivered under the Time Warner Credit Agreement designating or re-designating, as applicable, any Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute be deemed to satisfy the incurrence at requirements of this Section 6.08 and such Subsidiary shall be an Unrestricted Subsidiary or Restricted Subsidiary, as applicable, for all purposes under this Agreement. Additionally, if a Lender is not also a lender under the time of designation Time Warner Credit Agreement, in the event Time Warner delivers to the Administrative Agent a copy of any Indebtedness certificate delivered pursuant to Section 6.08 of the Time Warner Credit Agreement, Time Warner will be deemed to have satisfied the requirements of this Section 6.08. Notwithstanding the foregoing, if, after the Signing Date, any amendment, waiver, consent, amendment and restatement, supplement or Liens other modification of such Restricted Subsidiary existing at such timeSection 6.08 of the Time Warner Credit Agreement modifies the requirements therein so they are no longer the same as those in this Section 6.08, this paragraph shall not apply.

Unrestricted Subsidiaries. Subject to (a) The Company may designate, after the exclusions in the proviso in the definition of Issue Date, any Subsidiary (other than ▇▇▇▇▇ ▇▇▇▇▇ GP) as an “Unrestricted Subsidiary” under this Indenture (a “Designation”, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that ) only if: (a1) immediately before and after such designation, no Default or Event of Default shall have occurred occur and be continuingcontinuing as a result of giving effect to such Designation; (2) (A) the Company would be permitted by this Indenture to make an Investment at the time of Designation (assuming the effectiveness of such Designation) in an amount (the “Designation Amount”) equal to the Fair Market Value of the Company’s interest in such Subsidiary as determined in good faith by the Company’s Board of Directors, or (B) the Designation Amount is less than $1,000; (3) such Unrestricted Subsidiary does not own any Capital Stock in any Restricted Subsidiary of the Company which is not simultaneously being designated an Unrestricted Subsidiary; and (4) such Unrestricted Subsidiary is not liable, directly or indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness, provided that an Unrestricted Subsidiary may provide a Guarantee for the Notes. (b) In the event of any such Designation, the Company shall be deemed to have made an Investment constituting a Permitted Investment or a Restricted Payment pursuant to Section 4.08 hereof for all purposes of this Indenture in the Designation Amount. (c) The Company shall not and shall not cause or permit any Restricted Subsidiary to at any time (1) provide credit support for, guarantee or subject any of its property or assets (other than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of, any Indebtedness of any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness) (other than Permitted Investments in Unrestricted Subsidiaries) or (2) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary. (d) For purposes of designating the foregoing, the Designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be deemed to be the Designation of all of the Subsidiaries of such Subsidiary as Unrestricted Subsidiaries. Unless so designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Company shall be classified as a Restricted Subsidiary. (e) The Company may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary in connection (a “Revocation”) if: (1) no Default shall occur and be continuing as a result of giving effect to such Revocation; (2) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if incurred at such time, have been permitted to be incurred by a Restricted Subsidiary for all purposes of this Indenture; and (3) unless such redesignated Subsidiary shall not have any Indebtedness outstanding (other than Indebtedness that is simultaneously with a such redesignation being designated as Permitted Securitization ProgramIndebtedness), immediately after giving effect to such designationproposed Revocation, on a Pro Forma Basis, and after giving pro forma effect to the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes incurrence of any such Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted such redesignated Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at if such Indebtedness was incurred on the date of designation in an amount equal the Revocation, the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to paragraph (a) of Section 4.07 hereof. (f) All Designations and Revocations must be evidenced by a Board Resolution of the Board of Directors of the Company delivered to the net book value Trustee certifying compliance with the foregoing provisions of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timethis Section 4.15.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents Term Loan Documents, the LC Agreement or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than (x) Non-Recourse Debt or (y) to the extent it does not constitute Non-Recourse Debt, the Wilpinjong Mandatory Offer to the extent permitted under Section 7.02 (Investments) and Section 7.03 (Indebtedness). The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject Company may from time to the exclusions in the proviso in the definition time deliver to each Administrative Agent an Officers’ Certificate designating one or more of “its Subsidiaries (other than Canada Safeway) as Unrestricted Subsidiary”, any Restricted Subsidiaries; provided no Subsidiary may shall be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary if, upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basisthe aggregate Book Value of all assets of all Unrestricted Subsidiaries would exceed 15% of the Book Value of the consolidated assets of Company and its Subsidiaries or if doing so would cause an Event of Default under subsection 9.2. Company will not, and will not permit its Subsidiaries, including any Unrestricted Subsidiary, to enter into any contract, agreement, financing or other arrangement that would provide the creditors of any Unrestricted Subsidiary (including Persons with contingent claims against any Unrestricted Subsidiary) with any recourse to or against Company or any of its Subsidiaries (other than Unrestricted Subsidiaries) or any of their respective assets or revenues. Any Officers’ Certificate designating any Unrestricted Subsidiaries shall show, in reasonable detail, the Total Leverage Ratio Book Value of such Subsidiary’s assets and the consolidated assets of Company and its Subsidiaries, shall provide pro forma financial statements demonstrating Company will continue to be equal in compliance with subsection 9.2 upon giving effect to such designation, and shall certify that Company and its Subsidiaries are not parties to any contract or agreement that would provide any such creditors of such Subsidiary with recourse to or less against Company or any of its Subsidiaries (other than 2.50:1.00, Unrestricted Subsidiaries) and that no such creditor of such Subsidiary would have recourse to or against Company or any of its Subsidiaries (cother than Unrestricted Subsidiaries) no Subsidiary may be as a matter of law. Any Person designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of in any of the Priority Lien Notes Documentssuch Officers’ Certificate shall, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as without further action, become an Unrestricted Subsidiary on the fifth Business Day after each Administrative Agent receives such Officers’ Certificate. Company shall not, and shall not permit any of its Subsidiaries (other than Unrestricted Subsidiaries) to convey, transfer, sell or otherwise dispose of (including in connection with any merger or consolidation) any of its assets or properties to any Unrestricted Subsidiary if, after giving effect thereto, the aggregate Book Value of all assets of all Unrestricted Subsidiaries would exceed 15% of the Book Value of all assets of Company and its Subsidiaries has not at Subsidiaries. Company may from time to time deliver to each Administrative Agent an Officers’ Certificate changing the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary so that such Subsidiary ceases to be an Unrestricted Subsidiary, which change shall constitute an Investment under Section 7.02 by be effective on the Borrower therein at the date third Business Day after each Administrative Agent receives such Officers’ Certificate. Upon effectiveness of designation in an amount equal such change, such formerly Unrestricted Subsidiary shall be subject to the net book value provisions of the Borrower’s investment therein. The designation this Agreement applicable to all other Subsidiaries of any Company that are not Unrestricted Subsidiaries and such formerly Unrestricted Subsidiary as a Restricted shall not maintain any contract or condition that is not permitted hereunder for any Subsidiary shall constitute the incurrence at the time of designation Company that is not an Unrestricted Subsidiary regardless of any Indebtedness when it first entered into such contract or Liens of permitted such Restricted Subsidiary existing at such timecondition to exist.

Unrestricted Subsidiaries. Subject (a) The Borrower may designate any Subsidiary of the Borrower (other than a Borrower or any direct or indirect parent of a Borrower) that at the time of determination shall be designated by the Board of Directors of the Borrower or any Parent Holding Company in the manner provided, and subject to the exclusions in restrictions set forth in, clause (b) below. (b) The Board of Directors of the proviso in Borrower or any Parent Holding Company may designate any Subsidiary of the definition of “Unrestricted Subsidiary”, Borrower (including any Restricted Subsidiary may be designated as an Unrestricted existing Subsidiary and any Unrestricted newly acquired or newly formed Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower, but excluding the Borrower or any direct or indirect parent of the Borrower) to be an Unrestricted Subsidiary; provided provided, that (a) immediately before and after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing, continuing as a result of such designation (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of and any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debtresulting Investment therein). The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment under Section 7.02 by the Borrower (or its applicable Restricted Subsidiary) therein at the date of designation in an amount equal to the net book value Fair Market Value of the Borrower’s or the applicable Restricted Subsidiary’s investment therein. . (c) The designation Board of Directors of the Borrower or any Parent Holding Company may designate any Unrestricted Subsidiary as to be a Restricted Subsidiary shall constitute the incurrence (a “Subsidiary Redesignation”). Any Indebtedness of such Subsidiary and any Liens encumbering its assets at the time of such designation shall be deemed newly incurred or established, as applicable, at such time the Fair Market Value of the Borrower’s or such Restricted Subsidiaries’ investment therein at the time of redesignation shall constitute a return on any Indebtedness or Liens investment therein. Notwithstanding the foregoing, no Restricted Subsidiary of the Borrower may be designated as an Unrestricted Subsidiary if such Subsidiary owns Material Intellectual Property. For the avoidance of doubt, the Borrower may not be designated as an Unrestricted Subsidiary at any time; provided, however, that any Co-Borrower that has ceased to be a Co‑Borrower pursuant to Section 11.03 prior to the effectiveness of such Restricted designation may be designated as an Unrestricted Subsidiary existing at (provided that such timedesignation is otherwise permitted hereunder).

Unrestricted Subsidiaries. Subject to (a) Each of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be Subsidiaries listed on Exhibit B-2 is designated as an Unrestricted Subsidiary and as of the Closing Date. BPL may at any time designate any Restricted Subsidiary as an “Unrestricted Subsidiary” or an Unrestricted Subsidiary may be designated as a “Restricted Subsidiary upon delivery Subsidiary” by written notice to the Administrative Agent of written notice from the Borrower; provided that (a) so long as immediately before and after such designation, designation no Default or Event of Default shall have occurred and be continuingcontinuing or result therefrom. Notwithstanding anything else herein to the contrary, (b) other than for purposes of designating any Unrestricted Subsidiary that has been re-designated as a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall may not be equal to or less than 2.50:1.00, (c) no Subsidiary may be subsequently re-designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time. No Unrestricted Subsidiary shall be subject to or included within the scope of any provision herein or in any other Loan Document, including without limitation any representation, warranty, covenant or Event of Default herein or in any other Loan Document, except as set forth in this Section. (b) No Restricted Subsidiary shall guarantee or otherwise become liable in respect of any Indebtedness of, grant any Lien on any of its property (other than Equity Interests of an Unrestricted Subsidiary owned by such Restricted Subsidiary) to secure any Indebtedness of or other obligation of, or provide any other form of credit support to, any Unrestricted Subsidiary, other than Guarantees for the benefit of Unrestricted Subsidiaries not to exceed $25,000,000 at any one time outstanding. (c) Notwithstanding the foregoing, the General Partner shall remain a Restricted Subsidiary at all times, and so long as any Buckeye Merchant Service Company is a Borrower, such Buckeye Merchant Service Company and its respective Subsidiaries shall be a Restricted Subsidiary.

Unrestricted Subsidiaries. Subject to The Company at any time may designate any Person that is a Subsidiary, or after the exclusions in date of this Second Supplemental Indenture becomes a Subsidiary, of the proviso in the definition of “Company as an "Unrestricted Subsidiary”," whereupon (and until such Person ceases to be an Unrestricted Subsidiary) such Person and each other Person that is then or thereafter becomes a Subsidiary of such Person shall be deemed to be an Unrestricted Subsidiary. In addition, the Company may at any Restricted time terminate the status of any Unrestricted Subsidiary may be designated as an Unrestricted Subsidiary, whereupon such Subsidiary and any Unrestricted each other Subsidiary may of the Company (if any) of which such Subsidiary is a Subsidiary shall be designated as a Restricted Subsidiary. Notwithstanding the foregoing, no change in the status of a Subsidiary of the Company from a Restricted Subsidiary upon delivery to an Unrestricted Subsidiary or from an Unrestricted Subsidiary to a Restricted Subsidiary will be effective, and no Person may otherwise become a Restricted Subsidiary, if: (i) in the Administrative Agent case of written any change in status of a Restricted Subsidiary to an Unrestricted Subsidiary, the Restricted Payment resulting from such change, would violate the provisions of subsection 13(e) of Section 1.01 of this Second Supplemental Indenture; or (ii) such change or other event would otherwise result (after the giving of notice from or the Borrower; provided that (alapse of time, or both) immediately before in an Event of Default. In addition and after such designationnotwithstanding the foregoing, no Default or Event Restricted Subsidiary of Default shall have occurred the Company may become an Unrestricted Subsidiary, and be continuing, (b) other than for purposes the status of designating a Restricted any Unrestricted Subsidiary as an Unrestricted Subsidiary in connection with will be deemed to have been immediately terminated (whereupon such Subsidiary and each other Subsidiary of the Company (if any) of which such Subsidiary is a Permitted Securitization ProgramSubsidiary will be a Restricted Subsidiary) at any time when: (i) such Subsidiary (A) has outstanding Debt that is Unpermitted Debt (as defined below) or (B) owns or holds any Capital Stock of or other ownership interests in, immediately after giving effect to such designation, or a Lien on a Pro Forma Basisany property or other assets of, the Total Leverage Ratio shall be equal to Company or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of its Restricted Subsidiaries; or (ii) the Priority Lien Notes Documents, the ABL Credit Documents Company or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each other Restricted Subsidiary to be designated as an Unrestricted (A) provides credit support for, or a Guaranty of, any debt of such Subsidiary and its Subsidiaries has not at the time of designation(including any undertaking, and does not thereafter, create, incur, issue, assume, guarantee agreement or otherwise become instrument evidencing such Debt) or (B) is directly or indirectly liable with respect to on any Indebtedness other than Non-Recourse DebtDebt of such Subsidiary. The designation Any termination of any Restricted the status of an Unrestricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal pursuant to the net book value preceding sentence will be deemed to result in a breach of this covenant in any circumstance in which the Borrower’s investment therein. The designation Company would not be permitted to change the status of any such Unrestricted Subsidiary as to the status of a Restricted Subsidiary shall constitute pursuant to the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timepreceding paragraph.

Unrestricted Subsidiaries. Subject (a) Each of Parent and the Borrower will cause the management, business and affairs of each of Parent, the Borrower, the Restricted Subsidiaries and the Unrestricted Subsidiaries to be conducted in such a manner (including, without limitation, by keeping separate books of account and by not permitting properties of the Borrower and the Restricted Subsidiaries to be commingled) so that each Unrestricted Subsidiary will be treated as a legal entity separate and distinct from the Borrower and its Restricted Subsidiaries. (b) Unless designated as an Unrestricted Subsidiary on Schedule 5.14 as of the Effective Date or designated as such thereafter, subject to Section 5.14(c), any Person that becomes a Subsidiary of the Borrower or any of its Restricted Subsidiaries shall be classified as a Restricted Subsidiary. (c) The Borrower may designate by written notification thereof to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”Administrative Agent, any Restricted Subsidiary, including a newly formed or newly acquired Subsidiary, as an Unrestricted Subsidiary if (i) immediately prior, and upon giving effect, to such designation, no Default has occurred and is continuing or would immediately result therefrom, (ii) such designation is deemed to be an Investment in an Unrestricted Subsidiary in an amount equal to the fair market value as of the date of such designation of the Borrower’s direct and indirect ownership interest in such Subsidiary and such Investment would be permitted to be made at the time of such designation under Section 6.05 and (iii) the Borrower and such Subsidiary comply with the requirements of Section 5.12. Except as provided in this Section 5.14(c), no Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary. None of the Borrower or any Subsidiary that owns any Equity Interests or Indebtedness of, or holds any Lien on any property of, the Borrower or any Restricted Subsidiary of the Borrower that is not a Subsidiary to be so designated may be designated as an Unrestricted Subsidiary and Subsidiary. (d) The Borrower may designate any Unrestricted Subsidiary may to be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Programif, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (ci) no Subsidiary may Default has occurred and is continuing or would immediately result therefrom and (ii) such designation is deemed to be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the incurrence at such time of designation of any of the Priority Lien Notes DocumentsInvestment, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Liens of such Subsidiary existing at such time and such Investment, Indebtedness and Liens would be permitted to be designated as an Unrestricted Subsidiary and its Subsidiaries has not made or incurred at the time of designationsuch designation under each of Section 6.05, Section 6.01 and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to Section 6.02. (e) No Unrestricted Subsidiary shall have any Indebtedness other than Non-Recourse Debt. The designation Debt and the Borrower will not, and will not permit any of the Restricted Subsidiaries to, incur, assume, guarantee or be or become liable for any Indebtedness of any Restricted of the Unrestricted Subsidiaries. (f) The Borrower will not permit any Unrestricted Subsidiary as to hold any Equity Interest in, or any indebtedness of, any Loan Party. If, at any time, any Unrestricted Subsidiary fails to meet the requirements of Section 5.14(d), it shall thereafter cease to be an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value for purposes hereof and any Indebtedness and Investments of the Borrower’s investment therein. The designation Subsidiary and any Liens on assets of any Unrestricted such Subsidiary as shall be deemed to be incurred or made by a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timetime and the Borrower shall not be deemed to be in default of this Section 5.14, but if the Indebtedness is not permitted to be incurred under Section 6.01, the Investments are prohibited by Section 6.05, or the Lien is not permitted under Section 6.02, the Borrower shall be in default of the applicable covenant.

Unrestricted Subsidiaries. Subject to (a) Designate any Subsidiary of the exclusions in Borrower formed or acquired after the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated Closing Date (other than a Credit Party) as an Unrestricted Subsidiary unless: (i) neither such Subsidiary nor any of its Subsidiaries has any Indebtedness except Non-Recourse Debt; (ii) neither such Subsidiary nor any of its Subsidiaries is a party to any agreement, arrangement, understanding or other transaction with any Credit Party or any Restricted Subsidiary, except those agreements and other transactions permitted under Section 9.8; (iii) neither such Subsidiary nor any Unrestricted Subsidiary may be designated as of its Subsidiaries is a Restricted Subsidiary upon delivery to Guarantor or has any outstanding Letters of Credit issued for its account; (iv) at the Administrative Agent time of written notice from the Borrower; provided that (a) such designation and immediately before and after such designationgiving effect thereto, no Default or Event of Default shall have occurred and be continuing; (v) neither such Subsidiary nor any of its Subsidiaries owns any Indebtedness (excluding any accounts payable in the ordinary course of business) or Capital Stock of, or is the beneficiary of any Lien on any property of, any Credit Party or any Restricted Subsidiary; (bvi) at the time of such designation and immediately after giving effect thereto the aggregate Investment in such Subsidiary together with the aggregate Investments in all other than Unrestricted Subsidiaries are permitted under clause (j) and, for purposes so long as such Unrestricted Subsidiary is also a Joint Venture in accordance with the definition thereof, clause (h), of designating a Restricted Subsidiary as the definition of Permitted Investments, it being acknowledged that such designation shall be deemed to be an Investment in an Unrestricted Subsidiary in connection an amount equal to the fair market value as of the date of such designation of any Credit Party’s or any Restricted Subsidiary’s direct and indirect Capital Stock in such Subsidiary; (vii) at or immediately prior to such designation (1) the assets of such Subsidiary together with the assets of all other Unrestricted Subsidiaries (other than the Bostco Joint Venture or Frontera) do not constitute more than five percent (5%) of the Consolidated Net Tangible Assets as determined at the time of such designation and (2) the revenues of such Subsidiary together with the aggregate revenues of all other Unrestricted Subsidiaries (other than the Bostco Joint Venture or Frontera) do not constitute more than five percent (5%) of the aggregate revenues of the Borrower and its consolidated Restricted Subsidiaries as determined at the time of such designation; and (viii) at or immediately prior to such designation, the Borrower delivers a Permitted Securitization Programcertificate to the Agent certifying (A) the name of such Subsidiary and of all of such Subsidiary’s Subsidiaries, (B) that before and immediately after giving effect to such designation, the Credit Parties and the Restricted Subsidiaries shall be in compliance, on a Pro Forma Basispro forma basis, with the Total Leverage Ratio shall be equal to or less than 2.50:1.00covenants set forth in Sections 8.1 through 8.3, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (dC) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time that all requirements of this Section 9.17(a) have been met for such designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of . (b) designate any Unrestricted Subsidiary as a Restricted Subsidiary unless: (i) the representations and warranties of the Credit Parties set forth in this Credit Agreement and in the other Credit Documents shall constitute be true and correct in all material respects (provided that if any representation or warranty already includes a materiality or material adverse effect or change qualifier, such representation or warranty shall be true and correct in all respects) on and as of the incurrence date of such designation, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date of such designation, such representations and warranties shall continue to be true and correct in all material respects as of such specified earlier date; (ii) at the time of such designation and immediately after giving effect thereto, no Default or Event of any Indebtedness Default shall have occurred and be continuing; (iii) the Credit Parties comply with Sections 7.8 and 7.15 of the Credit Agreement; and (iv) at or Liens immediately prior to such designation, the Borrower delivers a certificate to the Agent certifying (A) the name of such Subsidiary and of all of such Subsidiary’s Subsidiaries, (B) that before and immediately after giving effect to such designation, the Credit Parties and the Restricted Subsidiary existing at Subsidiaries shall be in compliance, on a pro forma basis, with the covenants set forth in Sections 8.1 through 8.3, and (C) that all requirements of Section 9.17(b) have been met for such timedesignation.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition (a) Schedule 6.12 sets forth those Subsidiaries of “each Borrower that have been designated Unrestricted Subsidiary”, Subsidiaries. Such Borrower will not designate any Restricted Subsidiary may be designated as of its Subsidiaries an Unrestricted Subsidiary and any unless (i) such Subsidiary is designated an Unrestricted Subsidiary may be at the time it becomes a Subsidiary of any Credit Party; and (ii) at the time such Subsidiary is designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately an Unrestricted Subsidiary, before and after giving effect to such designationdesignation on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, as shown in an Officers' Certificate delivered to the Administrative Agent at the time of such designation. Such Officers' Certificate shall also state the specific purpose for which such designation is being made. All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted Subsidiaries. (b) other than for purposes of designating Such Borrower will not re-designate any Unrestricted Subsidiary a Restricted Subsidiary as an unless at the time such Unrestricted Subsidiary in connection with is designated a Permitted Securitization ProgramRestricted Subsidiary, immediately before and after giving effect to such designation, redesignation on a Pro Forma Basispro forma basis, no Default shall have occurred and be continuing, as shown in an Officer's Certificate delivered to the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not Administrative Agent at the time of such designation. (c) An Unrestricted Subsidiary shall be deemed to be redesignated a Restricted Subsidiary at any time if (a) any Restricted Company (i) provides guarantees or similar credit support for any Indebtedness or other monetary obligations of such Unrestricted Subsidiary (including any undertaking, and does not thereafter, create, incur, issue, assume, guarantee agreement or otherwise become instrument evidencing such Indebtedness or other monetary obligations) or (ii) is directly or indirectly liable with respect for any Indebtedness of such Unrestricted Subsidiary or (b) such Unrestricted Subsidiary incurs Indebtedness or other monetary obligations pursuant to which the lender has recourse (including by way of set-off) to any Indebtedness other than Non-Recourse Debt. The designation of the assets of any Restricted Subsidiary as an Unrestricted Subsidiary Company; provided that the foregoing shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal not apply to the net book value (x) a pledge of the Borrower’s investment therein. The designation Capital Stock of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any to secure Indebtedness or Liens other obligations of such Unrestricted Subsidiary, (y) any Copyright Lien or (z) any recourse to any Restricted Subsidiary existing at Company in respect of customary representations, warranties and covenants made or agreed to by such timeRestricted Company in connection with the sale and securitization of accounts receivable or similar contract rights.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, (i) Designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery unless such designation is made on or after the Effective Date by the Company delivering to the Administrative Agent a certificate of written notice from a Responsible Officer of the Borrower; provided that Company certifying such designation and the satisfaction of the following conditions: (aA) Investments in such Subsidiary by the Company and the Restricted Subsidiaries, as applicable, valued at the fair market value of such Unrestricted Subsidiary immediately before and after prior to the time of such designation, shall be permitted by Section 5.02(g), (B) at the time of such designation, no Default or Event of Default shall have occurred and be continuingcontinuing or would result therefrom, (bC) other than for purposes of designating on a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, Pro Forma Basis immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, Restricted Payment Conditions are satisfied and (cD) no such Subsidiary may be designated as an Unrestricted Subsidiary if it is not a “Restricted Subsidiary” (or “restricted subsidiary” or similar term) under, to the extent outstanding, the Term Facility, the Senior Notes or any other Debt for purposes borrowed money of the Company or any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and its Domestic Subsidiaries that are Material Subsidiaries with an outstanding principal amount exceeding $100,000,000; or (dii) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than NonRe-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of designate any Unrestricted Subsidiary as a Restricted Subsidiary unless such re-designation is made by Company delivering to the Administrative Agent a certificate of a Responsible Officer of the Company certifying such re-designation and certifying that (A) immediately after giving effect to such re-designation as a Restricted Subsidiary, such Subsidiary shall constitute be in compliance with the incurrence covenants hereunder, (B) at the time of such re-designation, no Default or Event of Default shall have occurred and be continuing or would result therefrom and the Company shall be in compliance with the financial covenants in Section 5.04 on a Pro Forma Basis immediately after giving effect to such re-designation of any Indebtedness or Liens of as a Restricted Subsidiary, and (C) on a Pro Forma Basis immediately after giving effect to such re-designation, the Restricted Subsidiary existing at such time.Payment Conditions are satisfied. 129 Chemtura (Revolving Facility) Credit Agreement

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, (i) Designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery unless such designation is made on or after the Amendment No. 2 Effective Date by the Borrower delivering to the Administrative Agent a certificate of written notice from a Responsible Officer of the Borrower; provided that Borrower certifying such designation and the satisfaction of the following conditions: (aA) Investments in such Subsidiary by the Borrower and the Restricted Subsidiaries, as applicable, valued at the fair market value of such Unrestricted Subsidiary immediately before and after prior to the time of such designation, shall be permitted by Section 5.02(g), (B) at the time of such designation, no Default or Event of Default shall have occurred and be continuingcontinuing or would result therefrom, (bC) other than for purposes of designating on a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, Pro Forma Basis immediately after giving effect to such designation, on a Pro Forma Basis, the Total Net Leverage Ratio shall be equal to or less than 2.50:1.00, not exceed 3.00:1.00 and (cD) no such Subsidiary may be designated as an Unrestricted Subsidiary if it is not a “Restricted Subsidiary” (or “restricted subsidiary” or similar term) under, to the extent outstanding, the Revolving Facility, the Senior Notes or any other Debt for purposes borrowed money of the Borrower or any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and its Domestic Subsidiaries that are Material Subsidiaries with an outstanding principal amount exceeding $100,000,000; or (dii) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than NonRe-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of designate any Unrestricted Subsidiary as a Restricted Subsidiary unless such re-designation is made by Borrower delivering to the Administrative Agent a certificate of a Responsible Officer of the Borrower certifying such re-designation and certifying that (A) immediately after giving effect to such re-designation as a Restricted Subsidiary, such Subsidiary shall constitute be in compliance with the incurrence covenants hereunder, (B) at the time of such re-designation, no Default or Event of Default shall have occurred and be continuing or would result therefrom and the Borrower shall be in compliance with the financial covenants in Section 5.04 on a Pro Forma Basis immediately after giving effect to such re-designation of any Indebtedness or Liens of as a Restricted Subsidiary, and (C) on a Pro Forma Basis immediately after giving effect to such re-designation as a Restricted Subsidiary existing at such timeSubsidiary, the Total Net Leverage Ratio shall not exceed 3.00:1.00.

Unrestricted Subsidiaries. Subject to The Borrowers may at any time on or after the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, Amendment Effective Date designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (a) immediately before and after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basisthe Borrowers shall be in pro forma compliance with the covenants set forth in Section 7.13 (it being understood that if no Fiscal Quarter cited in Section 7.13 has ended, the Total Leverage Ratio covenant in Section 7.13 for the first Fiscal Quarter cited in Section 7.13 shall be equal satisfied as of the last four quarters ended on or prior to or less than 2.50:1.00, such designation) and the Borrower shall deliver to the Administrative Agent a certificate setting forth in reasonable detail the calculations demonstrating such compliance and (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the purpose of any Indebtedness for borrowed money permitted under Section 7.02 with an aggregate outstanding principal amount in excess of the Priority Lien Notes Documents$5,000,000, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Junior Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary incurred pursuant to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtSection 7.02(c). The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Amendment Effective Date shall constitute an Investment under Section 7.02 by the Borrower PETIQ therein at the date of designation in an amount equal to the net book fair market value of the BorrowerPETIQ’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute (i) the incurrence at the time of designation of any Investment, Indebtedness or and Liens of such Restricted Subsidiary existing at such timetime and (ii) a return on any Investment by PETIQ in such Subsidiary pursuant to the preceding sentence in an amount equal to the fair market value at the date of such designation of PETIQ’s Investment in such Subsidiary. Notwithstanding the foregoing, neither PETIQ nor any direct or indirect parent of PETIQ that is a Subsidiary shall be permitted to be an Unrestricted Subsidiary.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition The board of “Unrestricted Subsidiary”, directors (or similar governing body) of Borrower may at any time designate any Restricted Subsidiary may be designated of Borrower acquired or formed after the Closing Date as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that provided, that, (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuingcontinuing or would result therefrom, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, the Credit Parties shall be in compliance on a Pro Forma Basispro forma basis with the covenants set forth in Article VII, recomputed for the Total Leverage Ratio shall be equal most recent Fiscal Quarter for which financial statements have been delivered (or are required to or less than 2.50:1.00have been delivered), (ciii) no Subsidiary may be designated as an Unrestricted Subsidiary if it is was previously an unrestricted Subsidiary and has been redesignated as a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (div) each Restricted no Subsidiary to may be designated as an Unrestricted Subsidiary to the extent that after giving effect thereto, all Unrestricted Subsidiaries would (x) generate more than 5.00% of Consolidated Adjusted EBITDA on a pro forma basis or (y) have total assets (including Stock in other Subsidiaries and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation excluding investments that are eliminated in an amount consolidation) equal to or greater than 5.00% of Consolidated Total Assets, (v) Borrower shall deliver to Agent at least three Business Days prior to such designation a certificate of a Responsible Officer of Borrower, together with all relevant financial information reasonably requested by Agent, demonstrating compliance with the net book value foregoing clauses (i) through (iv) of this Section 5.16 and, if applicable, certifying that such Subsidiary meets the Borrower’s investment therein. The requirements of an “Unrestricted Subsidiary” and (vi) at least ten days prior to the designation of any Unrestricted Subsidiary as a Restricted Subsidiary Subsidiary, the Lenders shall constitute have received all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the incurrence at the time of designation of any Indebtedness or Liens of USA Patriot Act, with respect to such Restricted Subsidiary existing at such timeSubsidiary.

Unrestricted Subsidiaries. Subject to (a) If, as of the exclusions in end of any fiscal quarter of the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery Parent for which financial statements have been delivered to the Administrative Agent hereunder pursuant to Section 7.01(a) or Section 7.01(b), the aggregate assets of written notice from all Unrestricted Subsidiaries exceeds 10% of the Borrower; provided that total assets of the Parent and its Subsidiaries on a consolidated basis determined in accordance with GAAP as of the end of such fiscal quarter (aas reflected in such financial statements), cause the Borrower Representative to designate, within twenty (20) immediately before and days after delivery of such designationfinancial statements, no Default one or Event of Default shall have occurred and be continuingmore Unrestricted Subsidiaries as Restricted Subsidiaries such that, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an aggregate assets of all Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any Subsidiaries does not exceed 10% of the Priority Lien Notes Documents, total assets of the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary Parent and its Subsidiaries has not on a consolidated basis determined in accordance with GAAP as of the end of the most recent fiscal quarter for which financial statements have been delivered to the Administrative Agent hereunder pursuant to Section 7.01(a) or Section 7.01(b) (as reflected in such financial statements). (b) If at any time any Unrestricted Subsidiary (i) owns any Equity Interests in, or Indebtedness of, the Parent or any Restricted Subsidiary, (ii) holds a Lien on any assets or property of the Parent or any Restricted Subsidiary, (iii) Guarantees or holds any Indebtedness owing by the Parent or any Restricted Subsidiary, or incurs any Indebtedness provided by the Parent or any Restricted Subsidiary, (iv) owns any IP Rights that are (or were at the time of designationacquired by such Unrestricted Subsidiary or at the time such Unrestricted Subsidiary was designated an Unrestricted Subsidiary) material to the Parent and its Restricted Subsidiaries, and does not thereafter, create, incur, issue, assume, guarantee or (v) ceases to be an “unrestricted subsidiary” (or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal becomes subject to the net book value covenants) under any other Indebtedness with an outstanding principal amount in excess of the Borrower’s investment therein. The designation of any Threshold Amount, then the Parent shall, concurrently therewith, re-designate such Unrestricted Subsidiary as a Restricted Subsidiary shall constitute (or, in the incurrence at case of clause (iv), transfer such IP Rights to the time of designation of any Indebtedness Parent or Liens of such a Restricted Subsidiary existing at such timeSubsidiary).

Unrestricted Subsidiaries. Subject to (a) Create or otherwise designate any Subsidiary as an Unrestricted Subsidiary unless the exclusions in the proviso terms set forth in the definition of “Unrestricted Subsidiary are complied with respect to such Subsidiary and no Default would result from the designation, creation and operation of such Unrestricted Subsidiary”. (b) Without the prior written consent of the Supermajority Lenders, any change the characterization of a Subsidiary from a Restricted Subsidiary may be designated as to an Unrestricted Subsidiary and any or an Unrestricted Subsidiary may to a Restricted Subsidiary; provided however, the prior written consent of the Supermajority Lenders shall not be designated as required to (i) change the characterization of an Unrestricted Subsidiary to a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that if (aA) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuingcontinuing at such time or would result therefrom, (bB) other than for purposes after giving effect to such re-characterization, each of designating the representations and warranties made by each Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects as of the date of such re-characterization, (C) such Subsidiary shall have complied with the provisions of subsection 7.9 and (D) the Borrower provides the Administrative Agent five days advance written notice of its intent to re-characterize such Subsidiary or (ii) change the characterization of a Restricted Subsidiary to an Unrestricted Subsidiary if (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and assuming that all investments made by the Borrower or any other Subsidiary in such Restricted Subsidiary prior to the date of such re-characterization were investments in an Unrestricted Subsidiary and (B) the Borrower provides the Administrative Agent five days advance written notice of its intent to re-characterize such Subsidiary. If any Restricted Subsidiary is designated as an Unrestricted Subsidiary in connection accordance with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basisthe terms of this Agreement, the Total Leverage Ratio Administrative Agent shall, and the Lenders hereby instruct the Administrative Agent to, release, upon the written request of the Borrower, such Subsidiary from any Guarantee Obligations arising under the Loan Documents and the Capital Stock of such Subsidiary from the Liens created under the Pledge Agreement; provided that such Subsidiary shall not have any Guarantee Obligations with respect to, or Liens in favor of, any Subordinated Indebtedness that are not so released. The Administrative Agent, at the Borrower's request and expense, shall execute such releases, termination statements or agreements as may be equal reasonably necessary to effect the release of Guarantee Obligations under the Loan Documents or less than 2.50:1.00, Liens created under the Pledge Agreement. (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of Permit any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute to fail to comply with the incurrence at requirements set forth in the time definition of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time"Unrestricted Subsidiary."

Unrestricted Subsidiaries. Subject to (a) The Company may designate a subsidiary (including a newly formed or newly acquired subsidiary) of the exclusions in the proviso in the definition Company or any of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated its Subsidiaries as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before after giving effect to the transaction, the Company could incur $1.00 of additional Indebtedness pursuant to the first sentence of Section 4.3 and (ii) such designation is at the time permitted under Section 4.5. Notwithstanding any provisions of this covenant all subsidiaries of an Unrestricted Subsidiary will be Unrestricted Subsidiaries. (b) The Company will not, and will not permit any of its Subsidiaries to, take any action or enter into any transaction or series of transactions that would result in a Person (other than a newly formed subsidiary having no outstanding Indebtedness (other than Indebtedness to the Company or a Subsidiary) at the date of determination) becoming a Subsidiary (whether through an acquisition, the redesignation of an Unrestricted Subsidiary or otherwise) unless, after giving effect to such designationaction, transaction or series of transactions on a pro forma basis, (i) the Company could incur at least $1.00 of additional Indebtedness pursuant to the first sentence of Section 4.3 and (ii) no Default or Event of Default shall have occurred would occur. (c) Subject to Sections 4.12(a) and be continuing, (b) other than for purposes ), an Unrestricted Subsidiary may be redesignated as a Subsidiary. The designation of designating a Restricted Subsidiary subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, or the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as designation of an Unrestricted Subsidiary as a Subsidiary in compliance with this Section 4.12 shall be made by the Board of Directors pursuant to a Board Resolution delivered to the Trustee and shall be effective as of the date specified in such Board Resolution, which shall not be prior to the date such Board Resolution is delivered to the Trustee. Any Unrestricted Subsidiary shall become a Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to incurs any Indebtedness other than Non-Recourse DebtIndebtedness. The designation If at any time Indebtedness of any Restricted Subsidiary as an Unrestricted Subsidiary which was Non-Recourse Indebtedness no longer so qualifies, such Indebtedness shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal be deemed to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any have been incurred when such Non-Recourse Indebtedness or Liens of such Restricted Subsidiary existing at such timebecomes Indebtedness.

Unrestricted Subsidiaries. Subject to The Company may at any time after the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, Closing Date designate any Foreign Subsidiary that is a Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted no Loan Party or Foreign Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary Qualified Jurisdiction may be designated as an Unrestricted Subsidiary, (c) without Agent’s consent, no Restricted Subsidiary may be designated an Unrestricted Subsidiary if it is a “Restricted was previously designated an Unrestricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each without Agent’s consent, no Unrestricted Subsidiary may be designated a Restricted Subsidiary to be if it was previously designated a Restricted Subsidiary; provided further that, unless designated by the Company as an Unrestricted a Restricted Subsidiary and its Subsidiaries has not at the time of designationthe formation or acquisition thereof, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness Subsidiary (other than Non-Recourse Debtany Subsidiary organized in a Qualified Jurisdiction) formed or acquired after the Closing Date shall be an Unrestricted Subsidiary until, if ever, such Subsidiary is designated as a Restricted Subsidiary in accordance with this Section 5.18. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book fair market value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute (A) the incurrence at the time of designation of any Investment, Indebtedness or Liens of such Restricted Subsidiary existing at such timetime and (B) a return on any Investment by the Borrower in Unrestricted Subsidiaries pursuant to the preceding sentence in an amount equal to the fair market value at the date of such designation of the Borrower’s Investment in such Subsidiary.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition A Responsible Officer of “Unrestricted Subsidiary”, Parent may designate any Restricted Subsidiary may (other than Holdings, the Borrower or a Material Subsidiary) to be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated so long as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) both immediately before and after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing, and (b) other than for purposes immediately after such designation, the Unrestricted Subsidiary Total Assets does not exceed 5.0% of designating Total Assets. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma BasisSubsidiary, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no aggregate Fair Market Value of all outstanding Investments owned by Parent and its Restricted Subsidiaries in the Subsidiary may be designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under Section 6.02 or under one or more clauses of the definition of Permitted Investments, as determined by Parent. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Any designation of a Subsidiary of Parent as an Unrestricted Subsidiary will be evidenced to the Administrative Agent by filing with the Administrative Agent a Certificate of a Responsible Officer certifying that such designation complied with the preceding conditions and was permitted by Section 6.02. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it is a “Restricted Subsidiary” will thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness of the Priority Lien Notes Documentssuch Subsidiary will be deemed to be incurred by a Restricted Subsidiary as of such date and, the ABL Credit Documents or if such Indebtedness is not permitted to be incurred as of such date under Section 6.03, Parent will be in default of such covenant. A Responsible Officer of Parent may at any documents evidencing time designate any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (a) such Indebtedness is permitted under Section 6.03, calculated on a pro forma basis as if such designation had occurred at the beginning of the applicable reference period; and (b) no Default or Event of Default would be in existence following such designation; provided, further, that any such Unrestricted Subsidiary that has been designated as a Restricted Subsidiary in accordance with the foregoing provisions may not at any time after such designation be re-designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timeSubsidiary.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, (a) The Borrower Agent may at any time designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (cii) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be was previously designated as an Unrestricted Subsidiary or if any of its Subsidiaries is a Restricted Subsidiary (unless such Subsidiaries are being designated as Unrestricted Subsidiaries simultaneously therewith), (iii) immediately after giving effect to such designation (A) the Borrowers and the Restricted Subsidiaries shall be in compliance, on a historical pro forma basis, with the covenants set forth in Sections 8.02 and 8.12, (B) Pro Forma Availability shall be at least 25% of the Aggregate Commitments, (C) the aggregate amount of net sales of the Unrestricted Subsidiaries shall not exceed 10% of the aggregate amount of net sales of the Company and its Subsidiaries has on a consolidated basis, (D) the consolidated EBITDA (measured on the same basis as “Consolidated EBITDA” provided herein, but for the Unrestricted Subsidiaries only) of the Unrestricted Subsidiaries shall not at exceed 10% of the time Consolidated EBITDA (measured as if all Subsidiaries were Restricted Subsidiaries for this purpose) of the Company and its Subsidiaries on a consolidated basis, and (E) the aggregate amount of total assets of the Unrestricted Subsidiaries shall not exceed 10% of the total assets of the Company and its Subsidiaries, and (iv) prior to the effectiveness of any such designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable the Borrower Agent shall deliver to the Administrative Agent a certificate setting forth in reasonable detail the calculations demonstrating compliance with respect to any Indebtedness other than Non-Recourse Debtthe preceding subsections (iii)(A) through (iii)(E). The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower Company therein at the date of designation in an amount equal to the net book value sum of (i) the Company’s direct or indirect equity ownership percentage of the Borrowernet worth of such designated Restricted Subsidiary immediately prior to such designation (such net worth to be calculated without regard to any guarantee provided by such designated Restricted Subsidiary) and (ii) without duplication, the aggregate principal amount of all Indebtedness owed by such designated Unrestricted Subsidiary and its Subsidiaries (to the extent such Subsidiaries are not previously Unrestricted Subsidiaries) to the Company or any Restricted Subsidiary immediately prior to such designation, all calculated, except as set forth in the parenthetical to clause (i), on a consolidated basis in accordance with GAAP (and such designation shall only be permitted to the extent such Investment is permitted under Section 8.02). (b) If at any time: (i) an Unrestricted Subsidiary becomes a guarantor of the Subordinated Notes, the Senior Notes or of any other Indebtedness of the Company or any Restricted Subsidiary, then the Borrower Agent shall provide prompt notice thereof to the Administrative Agent, and in any case within 10 days of such occurrence, and such Subsidiary shall automatically become a Restricted Subsidiary and a Borrower hereunder in compliance with, and otherwise satisfy the provisions of, Section 7.12, or (ii) any of the following occurs: (x) the aggregate amount of net sales of the Unrestricted Subsidiaries exceeds 10% of the aggregate amount of net sales of the Company and its Subsidiaries on a consolidated basis, (y) the consolidated EBITDA (measured on the same basis as “Consolidated EBITDA” provided herein, but for the Unrestricted Subsidiaries only) of the Unrestricted Subsidiaries exceeds 10% of the Consolidated EBITDA (measured as if all Subsidiaries were Restricted Subsidiaries for this purpose) of the Company and its Subsidiaries on a consolidated basis, or (z) the aggregate amount of total assets of the Unrestricted Subsidiaries exceeds 10% of the total assets of the Company and its Subsidiaries, then in any such case the Borrower Agent will promptly, and in any event within 10 days thereafter, designate one or more Unrestricted Subsidiaries a Restricted Subsidiaries so that, after such designation, none of the tests in subsections (x), (y) and (z) is then violated. (c) If at any time a Restricted Subsidiary is designated as an Unrestricted Subsidiary in compliance with this Agreement, the Administrative Agent shall be authorized to, and shall at the request of the Borrower Agent, (i) release such Unrestricted Subsidiary from any Loan Document to which it is a party and release any Administrative Agent’s investment therein. The designation Liens on the property or assets of such Unrestricted Subsidiary, and (ii) all Accounts and Inventory of such Subsidiary shall be excluded from the Borrowing Base. (d) If at any time any Unrestricted Subsidiary as is designated or becomes a Restricted Subsidiary shall constitute pursuant to the incurrence at the time terms of designation of any Indebtedness or Liens of this Agreement, such Restricted Subsidiary existing at shall, to the extent required thereby, comply with the provisions of Section 7.12 within the time required therein. (e) Except as otherwise provided in the definitions of “Accounts Formula Amount” and “Inventory Formula Amount”, none of the Accounts or Inventory of any Subsidiary newly designated as a Borrower shall be included in the calculation of the Borrowing Base until Agent has conducted Field Exams and appraisals reasonably required by it with results reasonably satisfactory to the Administrative Agent and the Person owning such timeAccounts or Inventory shall be a (directly or indirectly) wholly-owned Subsidiary of the Company and have become a Borrower.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any (a) Designate a newly organized or acquired Subsidiary or an existing Restricted Subsidiary may be designated as an Unrestricted Subsidiary unless: (i) such Subsidiary (and any Unrestricted Subsidiary may be designated as a of such Subsidiary) does not own any Equity Interests in any Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that and (aii) immediately before and after giving effect to such designationDesignation, as determined on a Pro Forma Basis, (A) no Default or Event of Default shall have occurred and be continuingcontinuing or would result from such Designation, including, without limitation, pursuant Section 7.05(f) or Section 7.11(c), (bB) other than for purposes of designating a the Consolidated Restricted Subsidiary as an Unrestricted Subsidiary in connection with Leverage Ratio determined on a Permitted Securitization Program, immediately after Pro Forma Basis giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be Designation is less than or equal to or less than 2.50:1.004.50 to 1.0 and (C) if the Consolidated Operating Cash Flow of all Unrestricted Subsidiaries for the Measurement Period then most recently ended would be a negative amount, such amount (cexpressed as a positive number) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any does not exceed 50% of the Priority Lien Notes Documents, Consolidated Operating Cash Flow of the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary Borrower and its Restricted Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as for such Measurement Period. (b) Designate an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute unless: (i) at least 50% of the incurrence at the time of designation of any Indebtedness or Liens Voting Interests of such Unrestricted Subsidiary are owned directly by the Borrower or a Restricted Subsidiary; (ii) no Default shall have occurred and be continuing or would result; and (iii) the Consolidated Restricted Subsidiary existing at Leverage Ratio determined on a Pro Forma Basis giving effect to such timeDesignation is less than or equal to 4.50 to 1.0. (c) Permit (i) the sum of (A) Consolidated Operating Cash Flow of the Borrower and its Restricted Subsidiaries for any Measurement Period and (B) the Unrestricted Subsidiary Operating Cash Flow of each Unrestricted Subsidiary the primary business of which is of a Target Business for such Measurement Period to be less than (ii) the combined Unrestricted Subsidiary Operating Cash Flow of all Unrestricted Subsidiaries the primary business of which is not a Target Business for such period.

Unrestricted Subsidiaries. Subject to The Administrative Borrower may at any time after the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, Closing Date designate any Restricted Subsidiary may be designated of the Administrative Borrower as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery by written notice to the Administrative Agent of written notice from the BorrowerAgent; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (bii) other than for purposes in the case of designating a Restricted the designation of any Subsidiary as an Unrestricted Subsidiary, such designation shall constitute an Investment in such Unrestricted Subsidiary in connection with a Permitted Securitization Program(calculated as an amount equal to the sum of (x) the fair market value of the Stock of the designated Subsidiary that are owned by the Borrower or any Restricted Subsidiary, immediately after giving effect prior to such designation and (y) the aggregate principal amount of any Indebtedness owed by such Subsidiary to the Borrower or any of its Restricted Subsidiaries immediately prior to such designation, all calculated, on a Pro Forma Basisconsolidated basis in accordance with GAAP), the Total Leverage Ratio and such Investment shall be equal to or less than 2.50:1.00permitted under Section 7.03, (ciii) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the purpose of (I) the Senior Notes Indenture or any refinancing thereof permitted by Section 7.01(f) or (II) any Incremental Equivalent Debt or other debt instrument, in each case of this clause (II), with a principal amount in excess of $50,000,000, (iv) immediately after giving effect to the Priority Lien Notes Documentsdesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and Borrower shall comply with the provisions of Section 6.22 with respect to such designated Restricted Subsidiary, (dv) each no Restricted Subsidiary to may be designated as a Subsidiary of an Unrestricted Subsidiary and (vi) in the case of the designation of any Subsidiary as an Unrestricted Subsidiary, each of (x) the Subsidiary to be so designated and (y) its Subsidiaries has not not, at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation pursuant to which the lender has recourse to any of the assets of the Borrower or any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation (other than Stock in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time.Unrestricted

Unrestricted Subsidiaries. Subject Celestica may, from time to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”time and at any time hereafter, designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary so long as: (a) (i) such Subsidiary shall not be a Subsidiary of Celestica existing as at the date of this Agreement; (ii) such Subsidiary shall never have been a Designated Subsidiary; and (iii) such Subsidiary shall never have been a Restricted Subsidiary; (b) neither Celestica nor any of its Subsidiaries (other than Unrestricted Subsidiaries) shall be liable, contingently or otherwise, for any indebtedness or other liability or obligation of the Unrestricted Subsidiary, except for guarantees provided by the immediate parent of such Unrestricted Subsidiary in connection with respect of indebtedness of such Unrestricted Subsidiary, where such guarantees are: (i) made solely for the purpose of facilitating a Permitted Securitization Programpledge by the guarantor of Shares of such Unrestricted Subsidiary; and (ii) the recourse under such guarantees are limited to such pledged Shares; and (c) neither Celestica nor any of its Restricted Subsidiaries shall have applied the proceeds of any Advance under the Facility to fund the equity of, or otherwise capitalize the Unrestricted Subsidiary. Provided that an Event of Default has not occurred and is not continuing, Celestica may from time to time and at any time hereafter, designate an Unrestricted Subsidiary as a Restricted Subsidiary provided that: (i) immediately after upon giving effect to such designation, Celestica shall remain in compliance with all covenants set out in Section 9.3 on a Pro Forma Basis, pro-forma (four quarter) basis; and (ii) the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any such Unrestricted Subsidiary as a Restricted Subsidiary shall constitute would not otherwise result in the incurrence at the time occurrence of designation a Default or an Event of any Indebtedness or Liens of such Restricted Subsidiary existing at such timeDefault.

Unrestricted Subsidiaries. Subject (a) The Borrower may designate any of its Restricted Subsidiaries to the exclusions in the proviso in the be an Unrestricted Subsidiary if that designation would not cause a Default and if that designation otherwise is consistent with this definition of “an Unrestricted Subsidiary”, any . If a Restricted Subsidiary may be is designated as an Unrestricted Subsidiary, the Fair Market Value of all outstanding Investments owned by the Borrower and its Restricted Subsidiaries in the Subsidiary properly designated shall be deemed to be an Investment made as of the time of the designation and any will either reduce the amount available for Restricted Payments under Section 7.5 or be an Investment permitted under Section 7.4, as determined by the Borrower; provided that no designation of an Unrestricted Subsidiary may be designated as a made in reliance on Section 7.5(c). Such designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary upon otherwise meets the definition of an Unrestricted Subsidiary. (b) Any designation of a Subsidiary of the Borrower as an Unrestricted Subsidiary shall be evidenced by the Borrower’s delivery to the Administrative Agent a certified copy of written notice from a resolution of the Borrower; provided that (a) immediately before and after such designation, no Default or Event board of Default shall have occurred and be continuing, (b) other than for purposes directors of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after the Borrower giving effect to such designationdesignation and a certificate of a Responsible Officer certifying that such designation complied with the preceding conditions and was permitted by Section 7.5. If, on a Pro Forma Basisat any time, any Unrestricted Subsidiary would fail to meet the Total Leverage Ratio shall requirements of an Unrestricted Subsidiary, it will thereafter cease to be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of this Agreement, and any Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted such Subsidiary will be deemed to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 incurred by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute of the incurrence at the time of designation of any Indebtedness or Liens Borrower as of such Restricted date and, if such Indebtedness is not permitted to be incurred as of such date under Section 7.1, the Borrower will be in default of Section 7.1 unless such Unrestricted Subsidiary existing at is made to meet such timerequirements.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition Notwithstanding any other provisions of “Unrestricted Subsidiary”, this Agreement or any Restricted Subsidiary may be designated as an other Credit Document: (a) No Unrestricted Subsidiary and shall be a "Company" under the Credit Agreement or any other Credit Document, nor shall any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery subject to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designationany covenant, no representation or Default made or Event of Default shall have occurred and be continuing, set forth herein or therein. (b) other than for purposes All accounting and financial calculations and determinations hereunder (including all compliance determinations under Section 9 of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio Credit Agreement) shall be equal to or less than 2.50:1.00made without consolidating the accounts of the Unrestricted Subsidiaries with those of the Companies, notwithstanding that such treatment is inconsistent with GAAP. (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes Investments (including pursuant to guarantees of Indebtedness of any Unrestricted Subsidiary) by the Companies in the Unrestricted Subsidiaries shall be permitted in an amount not exceeding 4% of the Priority Lien Notes Documentsconsolidated total assets of Parent and its Consolidated Subsidiaries (as determined from time to time in accordance with GAAP as of the most recently ended Test Date, but not including any assets held or owned by the ABL Credit Documents or Unrestricted Subsidiaries) at any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and time outstanding. (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time Dispositions of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to Equity Interests in any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under not be subject to Section 7.02 by 9.06, except as expressly set forth therein. (e) The Companies will be permitted to pledge their Equity Interests in the Borrower therein at Unrestricted Subsidiaries and encumber the date of designation in an amount equal to the net book value assets of the Borrower’s investment therein. The designation Unrestricted Subsidiaries to secure Indebtedness and other obligations for the Unrestricted Subsidiaries, and no such pledge of any such Equity Interests shall, by itself, cause any such Indebtedness or other obligations to be Indebtedness of such pledgor Company. (f) No Unrestricted Subsidiary as may own any Equity Interests of a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timeSubsidiary, other than Equity Interests in other Unrestricted Subsidiaries.

Unrestricted Subsidiaries. Subject to (a) The Board of Directors may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) an Unrestricted Subsidiary so long as: (i) neither the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, Trust nor any Restricted Subsidiary may is directly or indirectly liable for any Indebtedness of such Subsidiary; (ii) no default with respect to any Indebtedness of such Subsidiary would permit (upon notice, lapse of time or otherwise) any holder of any other Indebtedness of the Company or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment thereof to be designated accelerated or payable prior to its stated Maturity; (iii) any Investment in such Subsidiary made as a result of designating such Subsidiary an Unrestricted Subsidiary and will not violate the provisions of Section 6.9; (iv) neither the Trust nor any Restricted Subsidiary has a contract, agreement, arrangement, understanding or obligation of any kind, whether written or oral, with such Subsidiary other than those that might be obtained at the time from Persons who are not Affiliates of the Trust; and (v) neither the Trust nor any Restricted Subsidiary has any obligation to subscribe for additional shares of Capital Stock or other equity interest in such Subsidiary, or to maintain or preserve such Subsidiary’s financial condition or to cause such Subsidiary to achieve certain levels of operating results. (b) The Trust may designate any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; Subsidiary, provided that that: (ai) immediately before and after such designation, no Default or Event of Default shall have has occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to is continuing following such designation, on a Pro Forma Basis, ; (ii) the Total Leverage Ratio shall be equal Trust could incur at least $1.00 of additional Indebtedness (except for Permitted Indebtedness) pursuant to or less than 2.50:1.00, the first paragraph of Section 6.8 (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to treating any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any such Unrestricted Subsidiary as the incurrence of Indebtedness by a Restricted Subsidiary shall constitute Subsidiary); and (iii) such designation is evidenced by a Board Resolution, which is filed with the incurrence at Indenture Trustee, together with an Officer’s Certificate certifying that such designation complied with the time provisions of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timethis paragraph (b).

Unrestricted Subsidiaries. Subject to (a) The Parent Borrower may, at any time after the exclusions in Effective Date, substantially contemporaneously upon the proviso in the definition organization or acquisition of “any Subsidiary, designate such Subsidiary as an Unrestricted Subsidiary”, or designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that provided, that, (ai) immediately before and after such designation, designation (A) no Default or Event of Default shall have occurred and be continuing, and (bB) other than for purposes of designating the Parent Borrower shall be in compliance, on a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately Pro Forma Basis after giving effect to such designation, with the covenants contained in Section 6.1, in each case, recomputed as at the last day of the most recently ended fiscal quarter of the Parent Borrower for which the relevant information is available as if such designation had occurred on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00first (1st) day of each relevant period for testing such compliance, (cii) no Unrestricted Subsidiary shall own any Capital Stock in any Borrower or any Restricted Subsidiary, (iii) no Unrestricted Subsidiary shall hold any Indebtedness of, or any Lien on any property of, any Borrower or any Restricted Subsidiary, and (iv) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be was previously designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. Subsidiary. (b) The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Effective Date shall constitute an Investment under Section 7.02 by the Parent Borrower therein at the date of designation in an amount equal to the net book fair market value as determined in good faith by the Parent Borrower of the Borrower’s investment therein. such Investment. (c) The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence by the Parent Borrower at the time of such designation of any Investment, Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject (a) Schedule 6.08 sets forth those Subsidiaries that have been designated as Unrestricted Subsidiaries as of the date hereof, which Subsidiaries do not include any Guarantor or the Borrower. The Borrower may designate any other of its Subsidiaries (other than the Borrower or a Guarantor) as Unrestricted Subsidiaries from time to time in compliance with the exclusions in provisions of this Section 6.08. The Borrower will not designate any of its Subsidiaries as an Unrestricted Subsidiary unless at the proviso in the definition of “Unrestricted Subsidiary”, any Restricted time such Subsidiary may be is designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately Subsidiary, before and after giving effect to such designationdesignation on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as certified in an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect Officers’ Certificate delivered to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not Administrative Agent at the time of such designation, and does not thereafter, create, incur, issue, assume, guarantee . Such Officers’ Certificate also shall state the specific purpose for which such designation is being made. All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted Subsidiaries. (b) The Borrower may designate or otherwise become directly or indirectly liable with respect to any Indebtedness other than Nonre-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of designate any Unrestricted Subsidiary as a Restricted Subsidiary from time to time in compliance with the provisions of this Section 6.08. The Borrower will not designate or re-designate any Unrestricted Subsidiary as a Restricted Subsidiary, unless at the time such Unrestricted Subsidiary is so designated or re-designated as a Restricted Subsidiary, after giving effect to such designation or re-designation on a pro forma basis, no Event of Default shall constitute have occurred and be continuing, as certified in an Officer’s Certificate delivered to the incurrence Administrative Agent at the time of such designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timere-designation.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, (a) Not designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that unless (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuingcontinuing or would result therefrom, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, the Borrowers and the Restricted Subsidiaries shall be in compliance, on a Pro Forma Basis, with the Total Leverage Ratio shall be equal to or less than 2.50:1.00, Financial Covenant (cregardless of whether the Financial Covenant is then applicable under the parenthetical in Section 7.10(a)) no and (iii) such Subsidiary may be is also designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for the purposes of any of the Priority Credit Agreement Refinancing Indebtedness, any Second Lien Notes Documents, the ABL Credit Loan Documents or any documents evidencing any Permitted Refinancing Indebtedness or in respect of any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debtthereof. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Initial Closing Date shall constitute an Investment under Section 7.02 by the Borrower Borrowers therein at the date of designation in an amount equal to the net book fair market value of the Borrower’s investment Borrowers’ Investment therein. (b) Not re-designate any Unrestricted Subsidiary as a Restricted Subsidiary unless (i) immediately before and after such re-designation, no Event of Default shall have occurred and be continuing or would result therefrom, (ii) immediately after giving effect to such re-designation, the Borrowers and the Restricted Subsidiaries shall be in compliance, on a Pro Forma Basis, with the Financial Covenant (regardless of whether the Financial Covenant is then applicable under the parenthetical in Section 7.10(a)) and (iii) such Unrestricted Subsidiary is also re-designated as a Restricted Subsidiary for the purposes of any Credit Agreement Refinancing Indebtedness, any Second Lien Loan Documents or any Permitted Refinancing Indebtedness in respect of any thereof. The re-designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of re-designation of any Investment, Indebtedness or Liens of such Restricted Subsidiary existing at such time. (c) Not designate any Subsidiary as an “Unrestricted Subsidiary” under and as defined in any Credit Agreement Refinancing Indebtedness, any Second Lien Loan Documents or any Permitted Refinancing Indebtedness in respect of any thereof without designating such Subsidiary as an Unrestricted Subsidiary hereunder, or re-designate any “Unrestricted Subsidiary” as a “Restricted Subsidiary”, in each case under and as defined in any definitive debt documentation for the applicable Credit Agreement Refinancing Indebtedness, Second Lien Loan Documents or Permitted Refinancing Indebtedness in respect of any thereof without re-designating such Person as a Restricted Subsidiary hereunder. (d) Notwithstanding anything to the contrary contained here, in no event shall (i) (1) Holdings or the Borrowers or (2) any Restricted Subsidiary that holds any Equity Interests in, any Liens on, any Indebtedness of, any Investments in or any Collateral of any Restricted Subsidiary (unless such Restricted Subsidiary is included in the designation pursuant to Section 6.17(a)), in each case, be designated as an Unrestricted Subsidiary or (ii) Holdings, any Borrower or any Restricted Subsidiary transfer or otherwise exclusively license any Material IP Assets to any Unrestricted Subsidiary.

Unrestricted Subsidiaries. Subject (a) Schedule 6.08 sets forth those Subsidiaries that have been designated as Unrestricted Subsidiaries as of the date hereof, which Subsidiaries do not include TWE. TWC may designate any other of its Subsidiaries (other than TWE) as Unrestricted Subsidiaries from time to time in compliance with the exclusions in provisions of this Section 6.08. TWC will not designate any of its Subsidiaries as an Unrestricted Subsidiary unless at the proviso in the definition of “Unrestricted Subsidiary”, any Restricted time such Subsidiary may be is designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately Subsidiary, before and after giving effect to such designationdesignation on a pro forma basis, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as certified in an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect Officers' Certificate delivered to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not Administrative Agent at the time of such designation, and does not thereafter, create, incur, issue, assume, guarantee . Such Officers' Certificate also shall state the specific purpose for which such designation is being made. All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted Subsidiaries. (b) TWC may designate or otherwise become directly or indirectly liable with respect to any Indebtedness other than Nonre-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of designate any Unrestricted Subsidiary as a Restricted Subsidiary from time to time in compliance with the provisions of this Section 6.08. TWC will not designate or re-designate any Unrestricted Subsidiary as a Restricted Subsidiary, unless at the time such Unrestricted Subsidiary is so designated or re-designated as a Restricted Subsidiary, after giving effect to such designation or re-designation on a pro forma basis, no Event of Default shall constitute have occurred and be continuing, as certified in an Officer's Certificate delivered to the incurrence Administrative Agent at the time of such designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timere-designation.

Unrestricted Subsidiaries. Subject to (a) The Borrowers may at any time from and after the exclusions in Third Amendment Effective Date designate, by a certificate executed by a Responsible Officer of the proviso in the definition of “Unrestricted Subsidiary”Borrowers, (i) any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and (ii) any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided Subsidiary, provided, that (aw) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, ; (bx) other than for purposes the Loan Parties are in compliance with all of designating a Restricted Subsidiary as an Unrestricted Subsidiary the covenants contained in connection with a Permitted Securitization Program, Section 7.18 hereof both before and immediately after giving effect to such designation, on and (y) to the extent a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be is being designated as an Unrestricted Subsidiary, such Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee own any Equity Interests in any Borrower or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtGuarantor. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower applicable Loan Party therein at the date of designation in an amount equal to the net book aggregate fair market value of the Borrower’s all of such Person's outstanding investment therein, and such designation will only be permitted if such Investment is permitted under Section 7.02 hereof. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the be deemed to be an incurrence at the time of designation of any Indebtedness or then outstanding Indebtedness, Liens and Investments of such former Unrestricted Subsidiary designated as a Restricted Subsidiary by such Restricted Subsidiary existing at the date of designation, and such designation shall only be permitted if such Indebtedness is permitted under Section 7.03 hereof, such Liens are permitted under Section 7.01 hereof and such Investments are permitted under Section 7.02 hereof. (b) Any designation of a Subsidiary as an Unrestricted Subsidiary will be evidenced to the Administrative Agent by delivering to the Administrative Agent a certificate executed by a Responsible Officer of the Borrowers certifying that such designation complied with the applicable conditions set forth in this Section 6.18. (c) If, at any time, any Unrestricted Subsidiary should fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness, Liens and Investments of such Subsidiary shall be deemed to be an incurrence of Indebtedness, Liens and Investments by a Restricted Subsidiary as of such date and, if such Indebtedness, Liens and Investments are not permitted to be incurred as of such date under Sections 7.01, 7.02 or 7.03, as applicable, the Loan Parties shall be in default of such covenants. (d) The income, assets and liabilities of any Unrestricted Subsidiary shall not be included for purposes of calculating any financial or other covenants contained herein and shall not be included in the Borrowing Base.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, (a) The Parent Entity may at any Restricted time designate any Subsidiary may be designated (other than a Borrower) as an Unrestricted Subsidiary and or designate (or re-designate, as the case may be) any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that provided, that: (ai) immediately before and after such designation (or re-designation), no Default or Event of Default shall have occurred and be continuing, unless such re-designation is otherwise required under this Agreement; (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary the Parent Entity shall be in connection with a Permitted Securitization Program, immediately after giving effect to such designationcompliance, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, with Section 6.08; (ciii) no Subsidiary may be designated as an Unrestricted Subsidiary if such Subsidiary or any of its Subsidiaries owns any Equity Interests of, or owns or holds any Lien on any property of, any Borrower or any Restricted Subsidiary of the Parent Entity that is not a Subsidiary of the Subsidiary to be so designated or if such Subsidiary has Indebtedness outstanding that is recourse to the Parent Entity or any Restricted Subsidiary; and (iv) no Subsidiary may be designated as an Unrestricted Subsidiary if, after such designation, it is would be a “Restricted Subsidiary” for purposes the purpose of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Material Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. Loan Party. (b) The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall will constitute the incurrence at the time of designation (or, solely in the case of any such designation made to satisfy the Unrestricted Subsidiary Cap, the 91st day following such designation) of any Indebtedness or and Liens of such Restricted Subsidiary existing at such time; provided that, if any such designations made to satisfy the Unrestricted Subsidiary Cap and the operation of this Section 5.10(b) would cause, without giving effect to the 90-day grace period herein, a breach of Section 6.01 or 6.02, the Parent Entity shall use its commercially reasonable efforts to cause it and its Restricted Subsidiaries to comply as promptly as practicable with Section 6.01 and/or 6.02, as applicable, including causing one or more of such newly-designated Restricted Subsidiaries to become Guarantors (subject to any limitations under agreements of such Subsidiaries or applicable Law). Notwithstanding the foregoing, during the Covenant Relief Period, the Parent Entity shall not be permitted to designate any Subsidiary as an Unrestricted Subsidiary.

Unrestricted Subsidiaries. Subject to (a) The Company may designate, after the exclusions in the proviso in the definition of Issue Date, any Subsidiary (other than ▇▇▇▇▇ ▇▇▇▇▇ GP) as an “Unrestricted Subsidiary” under this Indenture (a “Designation”, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that ) only if: (a1) immediately before and after such designation, no Default or Event of Default shall have occurred occur and be continuingcontinuing as a result of giving effect to such Designation; (2) (A) the Company would be permitted by this Indenture to make an Investment at the time of Designation (assuming the effectiveness of such Designation) in an amount (the “Designation Amount”) equal to the Fair Market Value of the Company’s interest in such Subsidiary as determined in good faith by the Company’s Board of Directors, or (B) the Designation Amount is less than $1,000; (3) such Unrestricted Subsidiary does not own any Capital Stock in any Restricted Subsidiary of the Company which is not simultaneously being designated an Unrestricted Subsidiary; and (4) such Unrestricted Subsidiary is not liable, directly or indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness; provided that an Unrestricted Subsidiary may provide a Guarantee for the Notes. (b) In the event of any such Designation, the Company shall be deemed to have made an Investment constituting a Permitted Investment or a Restricted Payment pursuant to Section 4.08 hereof for all purposes of this Indenture in the Designation Amount. (c) The Company shall not and shall not cause or permit any Restricted Subsidiary to at any time: (1) provide credit support for, guarantee or subject any of its property or assets (other than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of, any Indebtedness of any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness) (other than Permitted Investments in Unrestricted Subsidiaries) or (2) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary. (d) For purposes of designating the foregoing, the Designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be deemed to be the Designation of all of the Subsidiaries of such Subsidiary as Unrestricted Subsidiaries. Unless so designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Company shall be classified as a Restricted Subsidiary. (e) The Company may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary in connection (a “Revocation”) if: (1) no Default shall occur and be continuing as a result of giving effect to such Revocation; (2) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if incurred at such time, have been permitted to be incurred by a Restricted Subsidiary for all purposes of this Indenture; and (3) unless such redesignated Subsidiary shall not have any Indebtedness outstanding (other than Indebtedness that is simultaneously with a such redesignation being designated as Permitted Securitization ProgramIndebtedness), immediately after giving effect to such designationproposed Revocation, on a Pro Forma Basis, and after giving pro forma effect to the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes incurrence of any such Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted such redesignated Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at if such Indebtedness was incurred on the date of designation in an amount equal the Revocation, the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to paragraph (a) of Section 4.07 hereof. (f) All Designations and Revocations must be evidenced by a Board Resolution of the Board of Directors of the Company delivered to the net book value Trustee certifying compliance with the foregoing provisions of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timethis Section 4.18.

Unrestricted Subsidiaries. Subject The Company may designate any Subsidiary of the Company to the exclusions in the proviso in the definition of “be an "Unrestricted Subsidiary”" as provided below in which event such Subsidiary and each other Person that is then or thereafter becomes a Subsidiary of such Subsidiary will be deemed to be an Unrestricted Subsidiary. "Unrestricted Subsidiary" means (1) any Subsidiary designated as such by the Board of Directors as set forth below where (a) neither the Company nor any of its other Subsidiaries (other than another Unrestricted Subsidiary) (i) provides credit support for, or any Guarantee of, any Restricted Debt of such Subsidiary or any Subsidiary of such Subsidiary (including any undertaking, agreement or instrument evidencing such Debt) or (ii) is directly or indirectly liable for any Debt of such Subsidiary or any Subsidiary of such Subsidiary, and (b) no default with respect to any Debt of such Subsidiary or any Subsidiary of such Subsidiary (including any right which the holders thereof may have to take enforcement action against such Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Debt of the Company and its Subsidiaries (other than another Unrestricted Subsidiary) to declare a default on such other Debt or cause the payment thereof to be designated as accelerated or payable prior to its final scheduled maturity and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary to be an Unrestricted Subsidiary and unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property of, any other Subsidiary of the Company which is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; Subsidiary, provided that either (ax) immediately before and after such designation, no Default the Subsidiary to be so designated has total assets of $1,000 or Event of Default shall have occurred and be continuing, less or (by) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal Company could Incur at least $1.00 of additional Debt pursuant to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment first paragraph under Section 7.02 by 10.08 hereof and provided, further, that the Borrower therein at the date of designation Company could make a Restricted Payment in an amount equal to the net greater of the fair market value and book value of the Borrower’s investment therein. The designation of any Unrestricted such Subsidiary pursuant to Section 10.12 hereof and such amount is thereafter treated as a Restricted Subsidiary shall constitute Payment for the incurrence at purpose of calculating the time of designation of any Indebtedness or Liens of such aggregate amount available for Restricted Subsidiary existing at such timePayments thereunder.

Unrestricted Subsidiaries. Subject to (a) The Parent may at any time after the exclusions in Effective Date, substantially contemporaneously upon the proviso in the definition organization or acquisition of “any Subsidiary, designate such Subsidiary as an Unrestricted Subsidiary”, or designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that that: (ai) immediately before and after such designation, designation (A) no Default or Event of Default shall have occurred and be continuing, and (bB) other than for purposes of designating the Parent shall be in compliance, on a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately pro forma basis after giving effect to such designation, with the covenants contained in Section 6.1, in each case recomputed as at the last day of the most recently ended fiscal quarter of the Parent for which the relevant information is available as if such designation had occurred on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, first day of each relevant period for testing such compliance; (cii) no Unrestricted Subsidiary shall own any Capital Stock in any Borrower or any Restricted Subsidiary; (iii) no Unrestricted Subsidiary shall hold any Indebtedness of, or any Lien on any property of, any Borrower or any Restricted Subsidiary; and (iv) no Restricted Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be was previously designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. Subsidiary. (b) The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Effective Date shall constitute an Investment under Section 7.02 by the Borrower Parent therein at the date of designation in an amount equal to the net book fair market value as determined in good faith by the Parent of the Borrower’s investment therein. such Investment. (c) The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence by the Parent at the time of such designation of any Investment, Indebtedness or Liens of such Restricted Subsidiary existing at such time.

Unrestricted Subsidiaries. Subject Celestica may, from time to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”time and at any time hereafter, designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary so long as: (a) (i) such Subsidiary shall not be a Subsidiary existing as at the date of this Agreement; and (ii) such Subsidiary shall never have been a Restricted Subsidiary; (b) neither Celestica nor any of its Subsidiaries (other than Unrestricted Subsidiaries) shall be liable, contingently or otherwise, for any indebtedness or other liability or obligation of the Unrestricted Subsidiary, except for guarantees provided by the immediate parent of such Unrestricted Subsidiary in connection with respect of indebtedness of such Unrestricted Subsidiary, where such guarantees are: (i) made solely for the purpose of facilitating a Permitted Securitization Programpledge by the guarantor of Shares of such Unrestricted Subsidiary; and (ii) the recourse under such guarantees are limited to such pledged Shares; and (c) neither Celestica nor any of its Restricted Subsidiaries shall have applied the proceeds of any Advance under the Facility to fund the equity of, or otherwise capitalize the Unrestricted Subsidiary. Provided that an Event of Default has not occurred and is not continuing, Celestica may from time to time and at any time hereafter, designate an Unrestricted Subsidiary as a Restricted Subsidiary provided that: (i) immediately after upon giving effect to such designation, Celestica shall remain in compliance with all covenants set out in Section 7.3 on a Pro Forma Basis, pro-forma (four quarter) basis; and (ii) the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any such Unrestricted Subsidiary as a Restricted Subsidiary shall constitute would not otherwise result in the incurrence at the time occurrence of designation a Default or an Event of any Indebtedness or Liens of such Restricted Subsidiary existing at such timeDefault.

Unrestricted Subsidiaries. Subject to The Borrowers may at any time on or after the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, Amendment Effective Date designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the BorrowerSubsidiary; provided that (a) immediately before and after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basisthe Borrowers shall be in pro forma compliance with the covenants set forth in Section 7.13 (it being understood that if no Fiscal Quarter cited in Section 7.13 has ended, the Total Leverage Ratio covenant in Section 7.13 for the first Fiscal Quarter cited in Section 7.13 shall be equal satisfied as of the last four quarters ended on or prior to or less than 2.50:1.00, such designation) and the Borrower shall deliver to the Administrative Agent a certificate setting forth in reasonable detail the calculations demonstrating such compliance and (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes the purpose of any Indebtedness for borrowed money permitted under Section 7.02 with an aggregate outstanding principal amount in excess of the Priority Lien Notes Documents$5,000,000, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Junior Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary incurred pursuant to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse DebtSection 7.02(c). The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Amendment Effective Date shall constitute an Investment under Section 7.02 by the Borrower PETIQ therein at the date of designation in an amount equal to the net book fair market value of the BorrowerPETIQ’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute (i) the incurrence at the time of designation of any Investment, Indebtedness or and Liens of such Restricted Subsidiary existing at such timetime and (ii) a return on any Investment by PETIQ in such Subsidiary pursuant to the preceding sentence in an amount equal to the fair market value at the date of such designation of PETIQ’s Investment in such Subsidiary. Notwithstanding the foregoing, neither PETIQ nor 119 any direct or indirect parent of PETIQ that is a Subsidiary shall be permitted to be an Unrestricted Subsidiary.

Unrestricted Subsidiaries. Subject (a) The Parent Borrower may designate any Subsidiary of the Parent Borrower (other than a Borrower or any direct or indirect parent of a Borrower) that at the time of determination shall be designated by the Board of Directors of the Parent Borrower in the manner provided, and subject to the exclusions in restrictions set forth in, clause (b) below. (b) The Board of Directors of the proviso in Parent Borrower may designate any Subsidiary of the definition of “Unrestricted Subsidiary”, Parent Borrower (including any Restricted Subsidiary may be designated as an Unrestricted existing Subsidiary and any newly acquired or newly formed Subsidiary of the Parent Borrower, but excluding any Borrower or any direct or indirect parent of a Borrower) to be an Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery Subsidiary; provided, that immediately after giving effect to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes continuing as a result of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary after the Closing Date shall constitute an Investment under Section 7.02 by the Parent Borrower (or its applicable Restricted Subsidiary) therein at the date of designation in an amount equal to the net book value Fair Market Value of the Parent Borrower’s or the applicable Restricted Subsidiary’s investment therein. . (c) The designation Board of Directors of the Parent Borrower may designate any Unrestricted Subsidiary as to be a Restricted Subsidiary shall constitute the incurrence (a “Subsidiary Redesignation”). Any Indebtedness of such Subsidiary and any Liens encumbering its assets at the time of such designation shall be deemed newly incurred or established, as applicable, at such time the Fair Market Value of the Parent Borrower’s or such Restricted Subsidiaries’ investment therein at the time of redesignation shall constitute a return on any Indebtedness or Liens investment therein. For the avoidance of doubt, the no Borrower may be designated as an Unrestricted Subsidiary at any time; provided, however, that any Co-Borrower that has ceased to be a Co-Borrower pursuant to Section 11.03 prior to the effectiveness of such Restricted designation may be designated as an Unrestricted Subsidiary existing at (provided that such time.designation is otherwise permitted hereunder). Notwithstanding the foregoing, (i) no ownership of intellectual property may be transferred to (including by way of an exclusive license) an Unrestricted Subsidiary by any Borrower Party to the extent such intellectual property is material to the business of the Borrower Parties (taken as a whole) after giving effect to such transfer (or exclusive license) (such intellectual property, “Material IP”) and

Unrestricted Subsidiaries. Subject to (a) The Board of Directors of the exclusions in Parent Guarantor may designate after the proviso in Issue Date any of its Subsidiaries (other than the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated Company) as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as under this Supplemental Indenture (a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that “Designation”) only if: (a1) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuingcontinuing at the time of or after giving effect to such Designation; (2) (x) the Parent Guarantor would be permitted to make an Investment at the time of Designation (assuming the effectiveness of such Designation) pursuant to paragraph (a) of Section 4.08 or as a Permitted Payment or Permitted Investment in an amount (the “Designation Amount”) equal to the greater of (1) the net book value of the Parent Guarantor’s interest in such Subsidiary calculated in accordance with GAAP and (2) the Fair Market Value of the Parent Guarantor’s interest in such Subsidiary as determined in good faith by the Parent Guarantor’s Board of Directors, or (y) the Designation Amount is less than $1,000; (3) such Unrestricted Subsidiary does not own any Capital Stock in any Restricted Subsidiary which is not simultaneously being designated an Unrestricted Subsidiary; (4) such Unrestricted Subsidiary is not liable, directly or indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness; provided that an Unrestricted Subsidiary may provide a Guarantee for the Notes; and (5) such Unrestricted Subsidiary is not a party to any agreement, contract, arrangement or understanding at such time with the Parent Guarantor, the Company or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Parent Guarantor, the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company or, in the event such condition is not satisfied, the value of such agreement, contract, arrangement or understanding to such Unrestricted Subsidiary shall be deemed a Restricted Payment. (b) In the event of any such Designation, the Parent Guarantor shall be deemed, for all purposes of this Supplemental Indenture, to have made an Investment equal to the Designation Amount that, as designated by the Parent Guarantor, constitutes a Restricted Payment pursuant to paragraph (a) of Section 4.08 or a Permitted Payment or Permitted Investment. (c) The Parent Guarantor shall not and shall not cause or permit the Company or any Restricted Subsidiary to at any time: (1) provide credit support for, guarantee or subject any of its property or assets (other than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of, any Indebtedness of any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness) or enter into or become a party to any agreement, contract, arrangement or understanding with any Unrestricted Subsidiary, the terms of which, together with the terms of all other agreements, contracts, arrangements and understandings with such Unrestricted Subsidiary, taken as a whole, in the good-faith judgment of the Board of Directors, are less favorable to the Parent Guarantor, the Company and the Restricted Subsidiaries than those that would be available in a comparable transaction in arm’s-length dealings with a party that is not an Affiliate of the Company; provided that this Section 4.15 shall not be deemed to prevent Permitted Investments, Restricted Payments or Permitted Payments in Unrestricted Subsidiaries that are otherwise allowed under this Supplemental Indenture, or (2) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary (other than by pledge of the Capital Stock thereof). (d) For purposes of designating this Section 4.15, the Designation of a Subsidiary of the Parent Guarantor as an Unrestricted Subsidiary shall be deemed to be the Designation of all of the Subsidiaries of such Subsidiary as Unrestricted Subsidiaries. Unless so designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Parent Guarantor will be classified as a Restricted Subsidiary. (e) The Parent Guarantor may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary in connection with (a “Revocation”) if: (1) no Default or Event of Default shall have occurred and be continuing at the time of and after giving effect to such Revocation; (2) all Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if incurred at such time, have been permitted to be incurred for all purposes of this Supplemental Indenture; and (3) unless such redesignated Subsidiary shall not have any Indebtedness outstanding (other than Indebtedness that would be Permitted Securitization ProgramDebt), immediately after giving effect to such designationproposed Revocation, on a Pro Forma Basis, and after giving pro forma effect to the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes incurrence of any such Indebtedness of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted such redesignated Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at if such Indebtedness was incurred on the date of designation in an amount equal the Revocation, the Parent Guarantor or the Company could incur $1.00 of additional Indebtedness (other than Permitted Debt) pursuant to Section 4.07. (f) All Designations and Revocations shall be evidenced by a Board Resolution of the Board of Directors of the Parent Guarantor delivered to the net book value Trustee certifying compliance with the provisions of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timethis Section 4.15.

Unrestricted Subsidiaries. Subject to (a) Create or otherwise designate any Subsidiary as an Unrestricted Subsidiary unless the exclusions in the proviso terms set forth in the definition of “Unrestricted Subsidiary are complied with respect to such Subsidiary and no Default would result from the designation, creation and operation of such Unrestricted Subsidiary”. (b) Without the prior written consent of the Supermajority Lenders, any change the characterization of a Subsidiary from a Restricted Subsidiary may be designated as to an Unrestricted Subsidiary and any or an Unrestricted Subsidiary may to a Restricted Subsidiary; provided however, the prior written consent of the Supermajority Lenders shall not be designated as required to (i) change the characterization of an Unrestricted Subsidiary to a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that if (aA) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuingcontinuing at such time or would result therefrom, (bB) other than for purposes after giving effect to such re-characterization, each of designating the representations and warranties made by each Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects as of the date of such re-characterization, (C) such Subsidiary shall have complied with the provisions of subsection 7.9 and (D) the Borrower provides the Administrative Agent five days advance written notice of its intent to re-characterize such Subsidiary or (ii) change the characterization of a Restricted Subsidiary to an Unrestricted Subsidiary if (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and assuming that all investments made by the Borrower or any other Subsidiary in such Restricted Subsidiary prior to the date of such re-characterization were investments in an Unrestricted Subsidiary and (B) the Borrower provides the Administrative Agent five days advance written notice of its intent to re-characterize such Subsidiary. If any Restricted Subsidiary is designated as an Unrestricted Subsidiary in connection accordance with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basisthe terms of this Agreement, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designationAdministrative Agent shall, and does not thereafterthe Lenders hereby instruct the Administrative Agent to, createrelease, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by upon the Borrower therein at the date of designation in an amount equal to the net book value written request of the Borrower’s investment therein. The designation of , such Subsidiary from any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute Guarantee Obligations arising under the incurrence at Loan Documents and the time of designation of any Indebtedness or Liens Capital Stock of such Restricted Subsidiary existing at such time.from the Liens created under the Pledge Agreement; provided that such

Unrestricted Subsidiaries. Subject to (a) The Board of Directors or other applicable governing body of the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, Borrower may at any time designate any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and or designate any Unrestricted Subsidiary may be designated as a Restricted Subsidiary Subsidiary, upon delivery to receipt by the Administrative Agent of written notice from the BorrowerBorrower that from and after such notice such subsidiary shall be or cease to be an Unrestricted Subsidiary, as applicable; provided that (ai) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (bii) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with that is a Permitted Securitization ProgramSpecial Purpose Receivables Subsidiary, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Borrower shall be in compliance with Sections 6.10, 6.11 and 6.15, if and as applicable at such time (and if Section 6.10 shall not be applicable at such time, the Interest Coverage Ratio shall not be equal to or less than 2.50:1.002.00:1.00), (c) no Subsidiary may be designated and, as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes condition precedent to the effectiveness of any of the Priority Lien Notes Documentssuch designation, the ABL Credit Documents or Borrower shall deliver to the Administrative Agent a certificate notifying the Administrative Agent of any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness such designation and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at also setting forth in reasonable detail the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable calculations demonstrating compliance with respect to any Indebtedness other than Non-Recourse Debtthe such covenants. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 6.01 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time. (b) The Borrower shall cause each Unrestricted Subsidiary to: (i) maintain entity records and books of account separate from those of the Borrower and its Restricted Subsidiaries, (ii) not commingle its funds or assets with those of any of the Borrower and its Restricted Subsidiaries and (iii) provide that its board of directors or other analogous governing body will hold all appropriate meetings to authorize and approve such entity’s actions, which meetings will be separate from those of the Borrower and its Restricted Subsidiaries.

Unrestricted Subsidiaries. Subject to (a) Create or otherwise designate any Subsidiary as an Unrestricted Subsidiary unless the exclusions in the proviso terms set forth in the definition of “Unrestricted Subsidiary are complied with respect to such Subsidiary and no Default would result from the designation, creation and operation of such Unrestricted Subsidiary”. (b) Without the prior written consent of the Supermajority Lenders, any change the characterization of a Subsidiary from a Restricted Subsidiary may be designated as to an Unrestricted Subsidiary and any or an Unrestricted Subsidiary may to a Restricted Subsidiary; provided however, the prior written consent of the Supermajority Lenders shall not be designated as required to (i) change the characterization of an Unrestricted Subsidiary to a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that if (aA) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuingcontinuing at such time or would result therefrom, (bB) other than for purposes after giving effect to such re-characterization, each of designating the representations and warranties made by each Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects as of the date of such re-characterization, (C) such Subsidiary shall have complied with the provisions of subsection 7.9 and (D) the Borrower provides the Administrative Agent five days advance written notice of its intent to re-characterize such Subsidiary or (ii) change the characterization of a Restricted Subsidiary to an Unrestricted Subsidiary if (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, assuming that such re-characterization constitutes an Investment in an Unrestricted Subsidiary and (B) the Borrower provides the Administrative Agent five days advance written notice of its intent to re-characterize such Subsidiary. If any Restricted Subsidiary is designated as an Unrestricted Subsidiary in connection accordance with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basisthe terms of this Agreement, the Total Leverage Ratio Administrative Agent shall, and the Lenders hereby instruct the Administrative Agent to, release, upon the written request of the Borrower, such Subsidiary from any Guarantee Obligations arising under the Loan Documents and the Equity Interests of such Subsidiary from the Liens created under the Pledge Agreement; provided that such Subsidiary shall not have any Guarantee Obligations with respect to, or Liens in favor of, any Subordinated Indebtedness that are not so released. The Administrative Agent, at the Borrower's request and expense, shall execute such releases, termination statements or agreements as may be equal reasonably necessary to effect the release of Guarantee Obligations under the Loan Documents or less than 2.50:1.00, Liens created under the Pledge Agreement. (c) no Subsidiary may be designated as an Permit any Unrestricted Subsidiary if it is a “Restricted to fail to comply with the requirements set forth in the definition of "Unrestricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and ." (d) each Restricted Subsidiary Permit the aggregate amount of Indebtedness outstanding at all Unrestricted Subsidiaries to be designated as an Unrestricted Subsidiary and its Subsidiaries has not exceed at the any time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time$25,000,000.

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any (a) Any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Facilities Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as an Unrestricted Subsidiary in connection with a Permitted Securitization ProgramReceivables Financing or a re-designation of the Deer Run Entities as Restricted Subsidiaries pursuant to Section 6.13(b), immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.003.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Second Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness in respect of the Second Lien Notes or any Subordinated Indebtedness and (d) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary after the Closing Date and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such time. (b) Notwithstanding the foregoing, to the extent that Hillsboro is an Unrestricted Subsidiary and has net income (as determined in accordance with GAAP) for each of the four consecutive fiscal quarters in the four consecutive fiscal quarter period ending as of the date of the financial statements most recently delivered by the Borrower pursuant to Section 6.02(a)(ii) in excess of $0, each of the Deer Run Entities shall no longer be deemed an Unrestricted Subsidiary and shall become a Guarantor in accordance with Section 6.12 and comply with the requirements set forth in Section 6.16. (c) Notwithstanding anything herein or in any other Loan Document to the contrary, upon Hillsboro or ▇▇▇▇▇▇ becoming a Restricted Subsidiary, (i) all Indebtedness of Hillsboro or ▇▇▇▇▇▇, as applicable, will be deemed to have been Incurred under Section 7.03(b) for purposes of Section 7.03, (ii) any Liens on properties or assets of Hillsboro or ▇▇▇▇▇▇, as applicable, will be deemed Incurred under Section 7.01(b) for purposes of Section 7.01, (iii) any Investments existing at such time of Hillsboro or ▇▇▇▇▇▇, as applicable, in any other Person will be deemed outstanding under Section 7.02(f) for purposes of Section 7.02, (iv) any encumbrances or restrictions or burdensome agreements restricted by Section 7.12 on Hillsboro or ▇▇▇▇▇▇, as applicable, existing at such time will be deemed to be permitted under Section 7.12 and (v) any transactions between or among Hillsboro, ▇▇▇▇▇▇, the Borrower, any Restricted Subsidiary and/or any Affiliate of the Borrower existing at such time will be deemed to be permitted under Section 7.08. Notwithstanding anything herein or in the any other Loan Document to the contrary, no Default will be deemed to have occurred solely as a result of the designation of Hillsboro or ▇▇▇▇▇▇ as a Restricted Subsidiary and no exception to any covenant or basket in this Agreement (other than the exceptions referred to in the immediately preceding sentence) will be deemed to be used solely as a result of such designation (other than with respect to any Indebtedness, Lien, Investment or other transaction incurred, made or entered into substantially concurrent with and in contemplation of such redesignation).

Unrestricted Subsidiaries. Subject Invest (whether in cash, contribution of assets or equity interests or otherwise, provided that the value of the assets and equity interests shall be determined to be the fair market value of such assets and equity interests on the date of each such Investment) in any Unrestricted Subsidiary or to create any Unrestricted Subsidiary, or do any of the foregoing with respect to any direct or indirect subsidiary of any Unrestricted Subsidiary, in an amount which, in the aggregate at any one time outstanding for all Unrestricted Subsidiaries, exceeds $250,000,000 in the amount of the Net Investments by the Parent, the Borrower and their Restricted Subsidiaries, provided that, to the exclusions extent that any such Unrestricted Subsidiary becomes a Restricted Subsidiary and (i) becomes a Guarantor and (ii) has 100% of its Equity Interests pledged to secure the Obligations and otherwise complies with the requirements for becoming Restricted Subsidiaries at the time, then the preceding $250,000,000 limitation (as adjusted through the date of determination) shall be reinstated to the extent of the Investment by the applicable Loan Party in the proviso such Unrestricted Subsidiary, and such Unrestricted Subsidiary shall thereafter no longer be included in the definition of “Unrestricted Subsidiary”Subsidiaries. For the avoidance of doubt, the only manner in which any Restricted Subsidiary portion of the $250,000,000 limitation for Unrestricted Subsidiaries may be designated as reinstated is (x) for an Unrestricted Subsidiary to become a Restricted Subsidiary, execute a Guaranty and any have 100% of the Equity Interests in such Unrestricted Subsidiary may be designated pledged to secure the Obligations and (y) partial replenishment from time to time as a cash is received by the Borrower or its Restricted Subsidiary upon delivery Subsidiaries in accordance with the definition of Net Investments. The Parent, the Borrower and the Restricted Subsidiaries will (A) not conduct any business with the Unrestricted Subsidiaries, other than on fair and reasonable terms substantially as favorable (or more favorable) to the Administrative Agent of written notice from Parent, the Borrower; provided that (a) immediately before and after Borrower or such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Restricted Subsidiary as would be obtainable by the Parent, the Borrower or such Restricted Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Unrestricted Subsidiary or an Affiliate, (B) keep all deposit accounts, investment accounts and other accounts of the Unrestricted Subsidiaries segregated and apart from the accounts of the Borrower, the Parent and the Restricted Subsidiaries, (C) use reasonable methods to (I) not commingle the business, employees and assets of the Parent, the Borrower and the Restricted Subsidiaries (other than servicing arrangements on fair and reasonable terms substantially as favorable (or more favorable) to the Parent, the Borrower or such Restricted Subsidiary as would be obtainable by the Parent, the Borrower or such Restricted Subsidiary at the time in connection a comparable arm’s length transaction with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less Person other than 2.50:1.00, (c) no Subsidiary may be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any or an Affiliate), and (II) keep the Business of the Priority Lien Notes DocumentsParent, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness Borrower and (d) each the Restricted Subsidiary to be designated as an Subsidiaries separate and apart from the Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal to the net book value of the Borrower’s investment therein. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timeSubsidiaries.

Unrestricted Subsidiaries. Subject (a) Notwithstanding anything to the exclusions contrary, (i) so long as the Met Facility is outstanding, the Met Facility Parties, and (ii) so long as the Thermal Term Loan Facility is outstanding, the Thermal Facility Parties shall be deemed, in each case, as “Unrestricted Subsidiaries” (and not “Restricted Subsidiaries”) for the proviso purpose of Section 8.2 [Negative Covenants], including any defined terms as used within such Section 8.2 [Negative Covenants]. (b) Except to the extent Section 1.6.1(c) [Unrestricted Subsidiaries] applies, (i) upon termination of the Met Facility, the Met Facility Parties, and (ii) upon termination of the Thermal Term Loan Facility, the Thermal Facility Parties will cease to be deemed “Unrestricted Subsidiaries” (and will be deemed “Restricted Subsidiaries”) for the purpose of Section 8.2 [Negative Covenants], including any defined terms as used within such Section 8.2 [Negative Covenants]. Any Investment, Indebtedness or Liens of the Met Facility Parties or of the Thermal Facility Parties existing at the time of such termination shall in each case be deemed to be incurred or made at such time by such Restricted Subsidiaries; provided that (x) to the extent such Investment, Indebtedness or Liens were not incurred or made in contemplation of such re-designation but would not be permitted to be incurred or made under this Agreement at the time of such termination, such Investment, Indebtedness or Liens, as applicable, will be deemed to have been outstanding on the Closing Date (but only to the extent after all available Investment, Indebtedness and Liens “baskets” are utilized), so that it is classified as permitted under Section 8.2.1 [Indebtedness], clause (1) of the definition of “Unrestricted Subsidiary”Permitted Liens” and/or Section 8.2.4(f) [Loans and Investments], any Restricted Subsidiary may be designated as an Unrestricted Subsidiary respectively, and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to for the Administrative Agent avoidance of written notice from the Borrower; provided that (a) immediately before and after such designationdoubt, no Potential Default or Event of Default shall be deemed to occur or have occurred in respect thereof, and (y) the Borrower shall, and shall cause the Met Facility Parties or the Thermal Facility Parties, as the case may be, to, deliver all Collateral and related documents and instruments that are required to be continuingdelivered by them pursuant to Sections 8.1.9 [Additional Guarantors] (as respects matters related to Collateral) and 8.1.17, (b) other than for purposes within the time periods specified therein as if such Met Facility Parties or Thermal Facility Parties were acquired as of designating a Restricted Subsidiary the date of termination of the Met Facility or Thermal Term Loan Facility, as an Unrestricted Subsidiary in connection with a Permitted Securitization Program, immediately after giving effect to such designation, on a Pro Forma Basis, the Total Leverage Ratio shall be equal to or less than 2.50:1.00, applicable. (c) no Subsidiary may Notwithstanding anything to the contrary, (i) upon consummation of the Met Spinoff, the Met Public Company and its Subsidiaries shall thereafter be designated as an deemed “Unrestricted Subsidiary if it is a “Restricted SubsidiarySubsidiaries” for all purposes of any under the Loan Documents, except that unless they previously have been or concurrently are released from their Guaranty of the Priority Lien Existing Notes and all other Publicly Traded Debt Securities, they will not be released from the Guaranty Agreement and the provisions of the Loan Documents applicable to the Guaranty Agreement shall continue to apply to them, (ii) upon consummation of the Thermal Spinoff, the Thermal Public Company and its Subsidiaries and the Thermal General Partner shall thereafter be deemed “Unrestricted Subsidiaries” for all purposes under the Loan Documents, except that unless they previously have been or concurrently are released from their Guaranty of the ABL Credit Existing Notes and all other Publicly Traded Debt Securities, they will not be released from the Guaranty Agreement and the provisions of the Loan Documents applicable to the Guaranty Agreement shall continue to apply to them, (iii) upon consummation of the Alternative Coal Spinoff, the Alternative Coal Holding Company and its Subsidiaries to the extent they are Subsidiaries shall thereafter be deemed “Unrestricted Subsidiaries” for all purposes under the Loan Documents, except that unless they previously have been or any documents evidencing any Permitted Refinancing Indebtedness concurrently are released from their Guaranty of the Existing Notes and all other Publicly Traded Debt Securities, they will not be released from the Guaranty Agreement and the provisions of the Loan Documents applicable to the Guaranty Agreement shall continue to apply to them and (iv) upon consummation of the Gas Spinoff, CEI and its Subsidiaries (other than the Gas Holding Company and its Subsidiaries) to the extent they are Subsidiaries shall thereafter be deemed “Unrestricted Subsidiaries” for all purposes under the Loan Documents, except that unless they previously have been or any Subordinated Indebtedness concurrently are released from their Guaranty of the Existing Notes and all other Publicly Traded Debt Securities, they will not be released from the Guaranty Agreement and the provisions of the Loan Documents applicable to the Guaranty Agreement shall continue to apply to them. (d) each Restricted Subsidiary The deemed designations and redesignations pursuant to this Section 1.6.1 [Unrestricted Subsidiaries] shall not be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower therein at the date of designation in an amount equal subject to the net book value requirements of the Borrower’s investment therein. The designation Section 8.2.3(a) [Designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness or Liens of such Restricted Subsidiary existing at such timeSubsidiaries].

Unrestricted Subsidiaries. Subject to the exclusions in the proviso in the definition of “Unrestricted Subsidiary”, any Restricted Subsidiary may be designated as an Unrestricted Subsidiary and any Unrestricted Subsidiary may be designated as a Restricted Subsidiary upon delivery to the Administrative Agent of written notice from the Borrower; provided that (a) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (b) other than for purposes of designating a Designate any Restricted Subsidiary as an Unrestricted Subsidiary in connection with or any Unrestricted Subsidiary as a Permitted Securitization ProgramRestricted Subsidiary, immediately after giving effect unless no Default shall exist or would result therefrom; provided that, notwithstanding the foregoing or any other provision any other Loan Document to such designation, on the contrary no Restricted Subsidiary that executes and delivers (or has executed and delivered) a Pro Forma Basis, the Total Leverage Ratio shall be equal to Guarantee of (or less than 2.50:1.00provides or has provided any other credit support for) any Indebtedness permitted by clauses (g), (cl) no or (m) of Section 7.02 or any other public indebtedness of the Borrower or any Restricted Subsidiary may or any security with respect to any of such debt issuances, shall be designated as an Unrestricted Subsidiary if it is a “Restricted Subsidiary” for purposes of any of the Priority Lien Notes Documents, the ABL Credit Documents or any documents evidencing any Permitted Refinancing Indebtedness or any Subordinated Indebtedness and . (db) each Restricted Subsidiary to be designated as an Unrestricted Subsidiary and its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness other than Non-Recourse Debt. The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an Investment under Section 7.02 by the Borrower (or its applicable Restricted Subsidiary) therein at the date of designation in an amount equal to the net book portion of the fair market value of the net assets of such Subsidiary attributable to the Borrower’s investment therein(or its applicable Restricted Subsidiary’s) equity interest therein as reasonably estimated by the Borrower (and such designation shall only be permitted to the extent such Investment is permitted under Section 7.03). The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the making, incurrence or granting, as applicable, at the time of designation of any then-existing Investment, Indebtedness or Liens Lien of such Subsidiary, as applicable. (c) No Loan Party shall permit any Unrestricted Subsidiary to (i) own Equity Interests in any Loan Party or any Restricted Subsidiary, (ii) incur any Indebtedness that is directly or indirectly secured by the assets of the Borrower or any of its Restricted Subsidiaries. (d) Notwithstanding anything to the contrary set forth in this Agreement or any other Loan Document, the Borrower shall not, and shall not permit any of its Restricted Subsidiaries to consummate any transaction that results in the transfer (whether by way of any dividend, distribution, Investment, Disposition, designation of any Restricted Subsidiary existing at such timeas an Unrestricted Subsidiary, or otherwise, and whether in a single transaction or a series of related transactions) of any Material Asset from the Borrower or any of its Restricted Subsidiaries to any Unrestricted Subsidiary.