CREDIT AGREEMENT

 

dated as of August 7, 2020

 

among

 

DESIGNER BRANDS INC.,

as the Company and the U.S. Borrower,

 

DESIGNER BRANDS CANADA INC.

as the Canadian Borrower,

 

The other LOAN PARTIES from time to time party hereto,

 

The LENDERS from time to time party hereto,

 

and

 

SIXTH STREET SPECIALTY LENDING, INC.,

as Administrative Agent and Lead Arranger

CREDIT AGREEMENT dated as of August 7, 2020, among DESIGNER BRANDS INC., an Ohio corporation (the “Company”), DESIGNER BRANDS CANADA INC., an Ontario corporation, the other Loan Parties from time to time party hereto, the Lenders from time to time party hereto, and SIXTH STREET SPECIALTY LENDING, INC., a Delaware corporation, as Administrative Agent.

 

WITNESSETH:

 

The U.S. Borrower has requested that the Lenders provide a term loan in the aggregate principal amount of $225,000,000 and the Canadian Borrower has requested that the Lenders provide a term loan in the aggregate principal amount of $25,000,000, and the Lenders have indicated their willingness to lend such term loans, severally and not jointly, on the terms and conditions set forth herein.

 

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

 

ARTICLE I.

 

 

SECTION 1.01  Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

 

“ABL Agent” means the “Administrative Agent” (or such similar defined term used therein) as such term is defined in the ABL Credit Agreement.

 

“ABL Credit Agreement” means that certain Credit Agreement, dated as of the date hereof, by and among the Company, Designer Brands Canada, Inc., an Ontario corporation, the other Loan Parties from time to time party thereto, the lenders from time to time party thereto, and PNC Bank, National Association, as administrative agent, as amended, amended and restated, supplemented, refinanced or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“ABL Credit Facility” means the revolving loan facility provided by the ABL Lenders under the ABL Credit Agreement in an aggregate principal amount not in excess of $400 million unless permitted by the ABL Intercreditor Agreement.

 

“ABL Documents” means the “Loan Documents” (or such similar defined term used therein) under and as defined in the ABL Credit Agreement, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“ABL Intercreditor Agreement” means the Intercreditor Agreement, in form and substance reasonably satisfactory to the Administrative Agent and the Company, to be entered into as of the Closing Date among the Administrative Agent, the ABL Agent and the U.S. Loan Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“ABL Lenders” means the lenders under the ABL Credit Agreement.

 

“ABL Loans” means the revolving loans (excluding letters of credit) made pursuant to the ABL Credit Agreement.

 

“ABL Priority Collateral” has the meaning specified in the ABL Intercreditor Agreement.

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Alternate Base Rate.

 

“Account” means an “Account” as defined in Article 9 of the UCC or the PPSA, as applicable.

 

“Account Debtor” means any Person that is or may become obligated to any Loan Party under, with respect to or on account of an Account or Credit Card Account.

 

“Acquired Indebtedness” means, with respect to any specified Person: (1) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.  Acquired Indebtedness will be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of such assets.

 

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date hereof, by which any Loan Party or Restricted Subsidiary (a) acquires any business or division of a business or all or substantially all of the assets of any Person, whether through the purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a Person.

 

“Additional Refinancing Amount” means, in connection with the Incurrence of any Refinancing Indebtedness, the aggregate principal amount of additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay accrued and unpaid interest, premiums (including tender premiums), expenses, defeasance costs and fees in respect thereof.

 

“Adjusted LIBO Rate” means, with respect to any LIBOR Borrowing for any Interest Period or for an applicable ABR Borrowing, an interest rate per annum equal to the higher of: (i) 1.25% and (ii) the result of the following, rounded upwards, if necessary, to the next 1/100 of 1%: (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means SSP, in its capacity as administrative agent hereunder and under the other Loan Documents, and including any of its Affiliates performing any of the functions of the Administrative Agent at any time, and their successors in such capacity as provided in Article VIII.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent, if any.

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.

 

“Affiliated Holders” means, with respect to any specified natural person, (a) such specified natural person’s parents, spouse, siblings, descendants, step children, step grandchildren, nieces and nephews and their respective spouses, (b) the estate, legatees and devisees of such specified natural person and each of the persons referred to in clause (a) of this definition, and (c) any company,

partnership, trust or other entity or investment vehicle created for the benefit of, or Controlled by, such specified natural person or any of the persons referred to in clause (a) or (b) of this definition or the holdings of which are for the primary benefit of such specified natural person or any of the persons referred to in clause (a) or (b) of this definition or created by any such person for the benefit of any charitable organization or for a charitable purpose.

 

“Affiliate Transaction” has the meaning specified in Section 6.05.

 

“Agreement” means this Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time.

 

 “Aggregate Commitments” means, at any time, the aggregate Commitments of all Lenders.

 

“Aggregate Term Exposure” means, at any time, the aggregate Term Exposure of all the Lenders at such time.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) 3.25%, (b) the Prime Rate in effect on such day, (c) the Overnight Bank Funding Rate in effect on such day plus ½ of 1% and (d) the Adjusted LIBO Rate plus 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Overnight Bank Funding Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Overnight Bank Funding Rate or the Adjusted LIBO Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof, then the Alternate Base Rate shall be the greatest of clause (a), (b) and (c) above and shall be determined without reference to clause (d) above.

 

“AML Legislation” has the meaning specified in Section 9.15.

 

“Anti-Money Laundering Laws” means applicable laws or regulations in any jurisdiction in which any Loan Party or any of its Subsidiaries or its Controlled Affiliates is located or is doing material business that relates to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto.

 

“Anti-Terrorism Laws” means any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, and any regulation, order, or directive promulgated, issued or enforced pursuant to such laws, all as amended, supplemented or replaced from time to time (including, without limitation, any AML Legislation and Anti-Money Laundering Laws) in each case in any jurisdiction in which any Loan Party or any of its Subsidiaries is located or is doing material business.

 

“Applicable Percentage” means, with respect to any Lender, a percentage equal to a fraction the numerator of which is such Lender’s Commitment and the denominator of which is the Aggregate Commitments; provided that, after the Term Loans have been made, the Applicable Percentages shall be determined based upon such Lender’s share of the Aggregate Term Exposure at that time; provided further that, in accordance with Section 2.20, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender’s Term Exposure shall be disregarded in the calculations in this definition.

 

“Applicable Rate” means (a) with respect to LIBOR Loans, 8.50% and (ii) with respect to ABR Loans, 7.50%.

 

“Approved Fund” has the meaning assigned to such term in Section 9.04.

 

“Article II JV” means Article II JV, LLC, a Delaware limited liability company.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (other than an Ineligible Institution) (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

 

“Availability” means “Availability” as defined in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

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

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time that is described in the EU Bail-In Legislation Schedule.

 

“Bankruptcy Code” means title 11 of the United States Code, as amended.

 

“Bankruptcy Event” means, with respect to any Person, when such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, interim receiver, monitor, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business, appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permits such Person (or such Governmental Authority or instrumentality), to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

“BC/VC” means BC/VC Ventures LLC, a Delaware limited liability company.

 

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent in consultation with the Borrower Representative giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the LIBO Rate for U.S. dollar-denominated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than 1.25%, the Benchmark Replacement will be deemed to be 1.25% for the purposes of this Agreement.

 

“Benchmark Replacement Adjustment” means, with respect to any replacement of the LIBO Rate with an alternate benchmark rate for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent in consultation with the Borrower Representative giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBO Rate with the

applicable Benchmark Replacement (excluding such spread adjustment) by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for such replacement of the LIBO Rate for U.S. dollar-denominated credit facilities at such time.

 

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice in the United States (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement).

 

“Benchmark Replacement Date” means the earlier to occur of the following events with respect to the LIBO Rate:

 

(1)         in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of the LIBO Rate permanently or indefinitely ceases to provide the LIBO Rate; or

 

(2)          in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.

 

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the LIBO Rate:

 

(1)         a public statement or publication of information by or on behalf of the administrator of the LIBO Rate announcing that such administrator has ceased or will cease to provide the LIBO Rate, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBO Rate;

 

(2)         a public statement or publication of information by a Governmental Authority having jurisdiction over the Administrative Agent, the regulatory supervisor for the administrator of the LIBO Rate, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for the LIBO Rate, a resolution authority with jurisdiction over the administrator for the LIBO Rate or a court or an entity with similar insolvency or resolution authority over the administrator for the LIBO Rate, which states that the administrator of the LIBO Rate has ceased or will cease to provide the LIBO Rate permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBO Rate; or

 

(3)          a public statement or publication of information by the regulatory supervisor for the administrator of the LIBO Rate or a Governmental Authority having jurisdiction over the Administrative Agent announcing that the LIBO Rate is no longer representative.

 

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the LIBO Rate and solely to the extent that

the LIBO Rate has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the LIBO Rate for all purposes hereunder in accordance with Section 2.14(b) and (y) ending at the time that a Benchmark Replacement has replaced the LIBO Rate for all purposes hereunder pursuant to Section 2.14(b).

 

“Beneficial Owner” means, with respect to any U.S. Federal withholding Tax, the beneficial owner, for U.S. Federal income Tax purposes, to whom such Tax relates.

 

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

 

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

 

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

 

“Billing Statement” has the meaning assigned to such term in Section 2.18(g).

 

“Board” means the Board of Governors of the Federal Reserve System of the U.S.

 

“Borrower” or “Borrowers” means, individually or collectively, the U.S. Borrower and the Canadian Borrower.

 

“Borrower Representative” has the meaning assigned to such term in Section 12.01.

 

“Borrowing” means (a) Term Loans of the same Type, made, converted or continued on the same date and, in the case of LIBOR Loans, as to which a single Interest Period is in effect and (b) a Protective Advance.

 

“Borrowing Base” means the “Borrowing Base” (or such similar defined term used therein) as such term is defined in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“Borrowing Base Certificate” means the “Borrowing Base Certificate” (or such similar defined term used therein) delivered pursuant to the ABL Credit Agreement with respect to the Borrowing Base as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“Borrowing Base Reporting Date” means twenty-five (25) days after the end of each fiscal month of the Company (or, if such day is not a Business Day, on the next succeeding Business Day); provided, however, during any Increased BBC Reporting Period, the Borrowing Base Reporting Date shall mean Wednesday of each week (or, if such day is not a Business Day, on the next succeeding Business Day).

 

“Borrowing Request” means a request by the Borrower Representative for a Borrowing in accordance with Section 2.03, which shall be, in the case of any such written request, in the form of Exhibit C or any other form approved by the Administrative Agent.

 

“BRX” means BRX DBI Joint Venture LLC, a Delaware limited liability company.

 

“Business Day” shall mean any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by Law to be closed for business in Dallas, Texas; provided that when used in connection with a LIBOR Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in deposits in U.S. Dollars in the London interbank market.

 

“Camuto Entities” means, collectively, Camuto LLC, a Delaware limited liability company and any Person that is a Subsidiary thereof.  For the avoidance of doubt, each of CCI Operations LLC, an Ohio limited liability company, Camuto Overseas Holding Subsidiary, LLC, an Ohio limited liability company, Vincent Camuto LLC, a Connecticut limited liability company, Sole Society Group, Inc., a Delaware corporation, VCJS LLC, a Connecticut limited liability company, VCS Group LLC, a Delaware limited liability company, Hot on time LLC, a Connecticut limited liability company, VC Line Building Services LLC, a Connecticut limited liability company, VC Footwear LLC, a Connecticut limited liability company, and Article II JV and BC/VC shall constitute a Camuto Entity.

 

“Canada” means the country of Canada and any province or territory thereof.

 

“Canadian Blocked Person” means any Person that is a “politically exposed foreign person” or “terrorist group” or similar person whose property or interests in property are blocked or subject to blocking pursuant to, or as described in, any Canadian Economic Sanctions and Export Control Laws.

 

“Canadian Borrower” means Designer Brands Canada Inc.

 

“Canadian Borrowing Base” means “Canadian Borrowing Base” as defined in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“Canadian Collateral” means any and all property of any Canadian Loan Party covered by the Collateral Documents and any and all other property of any Canadian Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent to secure the Canadian Secured Obligations.

 

“Canadian Commitment” has the meaning specified therefor in Section 2.01(b)(i).

 

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

 

“Canadian Economic Sanctions and Export Control Laws” means any Canadian laws, regulations or orders governing transactions in controlled goods or technologies or dealings with countries, entities, organizations, or individuals subject to economic sanctions and similar measures.

 

“Canadian Guaranteed Obligation” has the meaning assigned to such term in Section 11.01.

 

“Canadian Guarantor” means each Restricted Subsidiary of  the Canadian Borrower that is listed on the signature pages hereto as a Canadian Guarantor or that becomes a party hereto as a Canadian Guarantor pursuant to Section 5.14, in each case, until such Subsidiary’s Canadian Guaranty is released in accordance herewith.

 

“Canadian Guaranty” means Article XI of this Agreement.

 

“Canadian Loan Parties” means, individually and collectively as the context may require, the Canadian Borrower and the Canadian Guarantors.

 

“Canadian MEPP” means any plan that is a multi-employer pension plan as defined under the applicable federal or provincial pension standards legislation in Canada.

 

“Canadian Obligated Party” has the meaning set forth in Section 11.02.

 

“Canadian Obligations” means all unpaid principal of and accrued and unpaid interest on the Canadian Term Loans to the Canadian Borrower, all accrued and unpaid fees (including the Yield Maintenance Premium and any Prepayment Premium) and all expenses, reimbursements, indemnities and other obligations of the Canadian Loan Parties to the Lenders or to any Lender, the Administrative Agent, or any indemnified party arising under the Loan Documents (including guarantee obligations and interest, costs, fees and other amounts accruing during the pendency of any proceeding under any Insolvency Laws, regardless of whether allowed or allowable in such proceeding), in each case, to the extent relating to the Canadian Term Loans.

 

“Canadian Pension Event” means (a) the whole or partial withdrawal of a Loan Party from a Canadian Defined Benefit Plan during a plan year where any additional funding obligations of the Loan Party (other than the remittance of normal cost contributions owing in respect of periods up to the withdrawal date) would be triggered by such withdrawal; (b) the filing of a notice of intent to terminate in whole or in part a Canadian Defined Benefit Plan; (c) the treatment by a Governmental Authority of a Canadian Defined Benefit Plan amendment as a termination or partial termination; or (d) the appointment of a trustee by a Governmental Authority to administer the termination, in whole or in part, of a Canadian Defined Benefit Plan.  Notwithstanding anything to the contrary herein, a Canadian Pension Event shall not include any event that relates to the partial wind-up or termination of solely the defined contribution component of a Canadian Defined Benefit Plan.

 

“Canadian Pension Plans” means any plan, program or arrangement that is a pension plan that is required to be registered under any applicable Canadian federal or provincial pension standard legislation, whether or not registered under any such laws, which is maintained or contributed to by, or to which there is or may be an obligation to contribute by, a Loan Party in respect of any Person’s employment in Canada with such Loan Party, other than any Canadian MEPP or plans established by statute, which shall include, without limitation, the Canada Pension Plan maintained by the government of Canada and the Quebec Pension Plan maintained by the Province of Quebec.

 

“Canadian Secured Obligations” means the Canadian Obligations.

 

“Canadian Security Agreement” means the Canadian Security Agreement, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders, to be entered into as of the Closing Date, among the Canadian Loan Parties and the Administrative Agent, and, as the context requires, any other pledge or security agreement or deed of hypothec entered into, after the Closing Date by any other Canadian Loan Party (as required by this Agreement or any other Loan Document), as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“Canadian Subsidiary” means any Subsidiary of the Company that has been formed or is organized under the laws of Canada or any province or territory thereof.

 

“Canadian Term Loan” means a Term Loan made to the Canadian Borrower.

 

“Capital Expenditures” means expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements (or of any replacements or substitutions thereof or additions thereto) which have a useful life of more than one year and which, in accordance with GAAP, would be classified as capital expenditures.

 

“CARES Act Tax Refund Claim” means the refund claim resulting from the carry back of net operating losses pursuant to Section 172(b)(1)(D) of the Internal Revenue Code and any similar rule of state or local law.

 

“CARES Act Tax Refund Proceeds” means the cash proceeds actually received by the Company in respect of the CARES Act Tax Refund Claim.

 

“Cash Equivalents” means: (a) direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of America maturing in twelve (12) months or less from the date of acquisition; (b) commercial paper maturing in one (1) year or less rated not lower than A-1, by S&P or P-1 by Moody’s on the date of acquisition; (c) demand deposits, time deposits or certificates of deposit maturing within one year in commercial banks whose obligations are rated A-1, A or the equivalent or better by S&P on the date of acquisition; (d) money market or mutual funds whose investments are limited to those types of investments described in clauses (a)‑(c) above; and (e) fully collateralized repurchase agreements with a term of not more than one hundred eighty (180) days for securities described in clause (a) above and entered into with commercial banks whose obligations are rated A-1, A or the equivalent or better by S&P on the date of acquisition.

 

“Casualty” has the meaning assigned to such term in Section 5.12.

 

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

 

“CFC” means each Person that is a “controlled foreign corporation” within the meaning of Section 957(a) of the Code.

 

“CFC Holdco” means a Person (a) owning, directly or indirectly, no material assets other than Equity Interests and/or Indebtedness of one or more CFCs or (b) that has no material assets other than Equity Interests and/or Indebtedness in one or more Persons described in clause (a) above and/or this clause (b).

 

“Change in Control” means (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a Permitted Holder, shall have acquired beneficial ownership of (within the meaning of Rule 13d-3 promulgated by the SEC under the Exchange Act), directly or indirectly, of more than twenty-five percent (25%) of the voting Equity Interests of the Company, (b) the Company ceases to own, directly or indirectly, one hundred percent (100%) of the fully diluted Equity Interests of any other Loan Party except with respect to this clause (b), in any transaction permitted hereunder, free and clear of all Liens (other than Permitted Specified Liens or (c) a “Change in Control” (or words of similar import) shall have occurred under the ABL Credit Agreement.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory

authorities (whether or not having the force of law), in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.

 

“Charges” has the meaning assigned to such term in Section 9.18.

 

“CIP Regulations” shall have the meaning set forth in Section 8.11 hereof.

 

“Closing Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

 

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

 

“Collateral” means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be, become or be intended to be, subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders and other Secured Parties, to secure the U.S. Secured Obligations or the Canadian Secured Obligations.

 

“Collateral Access Agreement” means any landlord waiver or other agreement, in form and substance satisfactory to the Administrative Agent in its Permitted Discretion, between the Administrative Agent and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any real property where any Collateral is or may be located, as such landlord waiver or other agreement may be amended, restated, supplemented or otherwise modified from time to time.

 

“Collateral and Guaranty Requirement” means, at any time, the requirement that:

 

(a)          the Administrative Agent shall have received from the Company and each other Loan Party either (i) (A) in the case of each U.S. Loan Party, a counterpart of this Agreement and the U.S. Security Agreement, duly executed and delivered on behalf of such Person or (B) in the case of each Loan Party that is a Canadian Subsidiary, a counterpart of this Agreement and the Canadian Security Agreement, duly executed and delivered on behalf of such Person, or (ii) in the case of any Person that becomes a Subsidiary (other than Excluded Subsidiary) after the date hereof, (A) a Joinder Agreement, duly executed and delivered on behalf of such Person, and (B) instruments in the form or forms specified in the applicable Security Agreement under which such Person becomes a party to the applicable Security Agreement, duly executed and delivered on behalf of such Person, together with such certificates, documents and opinions with respect to such Subsidiary as may reasonably be requested by the Administrative Agent;

 

(b)          the Administrative Agent shall have received all Intellectual Property security agreements, deposit account control agreements, securities account control agreements and other Collateral Documents required to be provided to it hereunder or under the applicable Security Agreement;

 

(c)          the Administrative Agent shall have received all Real Property Deliverables with respect to all Material Real Property;

 

(d)         all documents and instruments, including UCC financing statements, PPSA registrations and registrations in respect of deeds of hypothec required by the Collateral Documents or this Agreement with the priority required by the Collateral Documents shall have been filed, registered or recorded or delivered to the Administrative Agent for filing, registration or recording;

 

(e)          the Administrative Agent shall have received the IPCo JV Consent and Pledge; and

 

(f)          each Loan Party shall have obtained all material consents and approvals required in connection with the execution and delivery of all Collateral Documents to which it is a party and the performance of its obligations thereunder.

 

Notwithstanding the foregoing, any Subsidiary formed or acquired after the date hereof and required to become a Loan Party shall not be required to comply with the foregoing requirements prior to the time specified in Section 5.14. The foregoing definition shall not require the creation or perfection of pledges of or security interests in, or legal opinions or other deliverables with respect to, particular assets of the Loan Parties, or the provision of Guarantees by any Subsidiary, if and for so long as the Administrative Agent, in consultation with the Company, determines that the cost of creating or perfecting such pledges or security interests in such assets, or obtaining legal opinions or other deliverables in respect of such assets, or providing such Guarantees, shall be excessive in view of the benefits to be obtained by the Lenders therefrom. The Administrative Agent may in its sole discretion grant extensions of time for the creation and perfection of security interests in, or the delivery of legal opinions or other deliverables with respect to, particular assets or the provision of any Guarantee by any Subsidiary (including extensions beyond the Closing Date or in connection with assets acquired, or Subsidiaries formed or acquired, after the date hereof) where it determines that such action cannot be accomplished without unreasonable effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or the Collateral Documents. Notwithstanding the foregoing, no action required to be taken by any Person to effect compliance by the Administrative Agent and the Lenders with any applicable Requirement of Law shall be deemed to cause unreasonable effort or expense hereunder.

 

“Collateral Documents” means, collectively, the Security Agreements, the Mortgages (if applicable), the ABL Intercreditor Agreement, the IPCo JV Consent and Pledge, any deposit account control agreement, any securities account control agreement, and any other agreements, instruments and documents executed in connection with this Agreement that are intended to create, perfect or evidence Liens to secure the Obligations, including, without limitation, all other security agreements, pledge agreements, mortgages, deeds of trust, the U.S. Guaranty or the Canadian Guaranty or any joinder or supplement hereto or any other Guarantee of all or any portion of the Obligations, subordination agreements, pledges, and collateral assignments, whether theretofore, now or hereafter executed by any Borrower or any other Loan Party and delivered to the Administrative Agent.

 

“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Term Loans hereunder, as such commitment may be reduced pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.  The initial aggregate amount of all of the Lenders’ Commitments is $250,000,000.

 

“Commitment Schedule” means the Schedule attached hereto as Schedule 1.01(a).

 

“Communications” has the meaning assigned to such term in Section 9.01(d).

 

“Company” has the meaning assigned to such term in the introductory paragraph hereof.

 

“Competitor” shall mean any Person that is an operating company and is engaged primarily in the same or similar business as the Company.

 

“Compliance Certificate” means a certificate executed by a Financial Officer of the Borrower Representative in substantially the form of Exhibit D.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income or capital (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Consideration” means with respect to any Permitted Acquisition, the aggregate of (without duplication) (i) the cash paid by any of the Loan Parties, directly or indirectly, to the seller in connection therewith, (ii) the Indebtedness incurred or assumed by any of the Loan Parties, whether in favor of the seller or otherwise and whether fixed or contingent, in connection therewith, (iii) any Guarantee given or incurred by any Loan Party in connection therewith, and (iv) any other cash or equity consideration given or obligation incurred by any of the Loan Parties in connection therewith, as each of the foregoing is recorded by the Loan Parties in accordance with GAAP.

 

“Consolidated Current Assets” means, as at any date of determination, the total assets of the Company and its Restricted Subsidiaries on a consolidated basis that may properly be classified as current assets in conformity with GAAP, excluding cash and Cash Equivalents.

 

“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of the Company and its Restricted Subsidiaries on a consolidated basis that may properly be classified as current liabilities in conformity with GAAP, excluding the current portion of long term debt and any outstanding ABL Loans and other revolving indebtedness.

 

 “Consolidated EBITDA” means, for any period of determination, without duplication, consolidated net income of the Company and its Restricted Subsidiaries plus (i) the following (to the extent deducted from such calculation of consolidated net income): (a) depreciation, (b) amortization, (c) non-cash expenses related to stock based compensation, (d) other non-cash charges, non-cash expenses, or non-cash losses to net income (provided, however that cash payments made in such period or in any future period in respect of such non-cash charges, expenses or losses shall be subtracted from consolidated net income in calculating Consolidated EBITDA), (e) interest expense, (f) income tax expense, and (g) restructuring charges or expenses (including integration costs, restructuring costs and severance costs related to acquisitions and to closure or consolidation of plants, facilities or locations and any expense related to any reconstruction, recommissioning or reconfiguration of fixed assets for alternate use) not to exceed $20,000,000 in the aggregate incurred prior to the date hereof, minus (ii) non-cash credits or non-cash gains (to the extent included in such calculation of consolidated net income), in each case determined and consolidated for the Company and its Restricted Subsidiaries in accordance with GAAP; provided that the foregoing shall exclude the income (or deficit) of any Person (other than a Restricted Subsidiary) in which the Company or any of its Restricted Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Company or such Restricted Subsidiary in the form of dividends or similar distributions.

 

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive) determined for the Company and its Restricted Subsidiaries on a consolidated basis equal to: (a) the sum, without duplication, of the amounts for such period of (i) Consolidated EBITDA, plus (ii) the Consolidated Working Capital Adjustment excluding any gains or losses attributable to Dispositions, minus (b) the sum, without duplication, of the amounts for such period of (i) voluntary and scheduled (but not mandatory) repayments and repurchases of Consolidated Total Debt including any premiums or penalties paid in connection therewith (excluding repayments of revolving loans except to the extent the commitments to make such revolving loans are permanently reduced in connection with such repayments), plus (ii) Unfinanced Capital Expenditures, plus (iii) consolidated cash Interest Expense, plus (iv) provisions for current taxes based on income of Company and its Restricted Subsidiaries and payable

in cash with respect to such period, plus (v) the aggregate amount of any Extraordinary Receipts used to make any mandatory repayment pursuant to Section 2.11(b)(vi) to the extent such amount is included in, and results in an increase to, Consolidated EBITDA.

 

“Consolidated Total Debt” means, as at any date of determination for any Person, the aggregate principal amount (or stated balance sheet amount, if larger) of all Indebtedness of such Person and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Working Capital” means, as at any date of determination, the excess or deficiency of Consolidated Current Assets minus Consolidated Current Liabilities.

 

“Consolidated Working Capital Adjustment” means, for any period of determination on a consolidated basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated Working Capital as of the end of such period.

 

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

 

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

 

(2)          to advance or supply funds:

 

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

 

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

 

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

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Card Accounts” means any “payment intangibles,” as defined in the UCC or PPSA, receivables or other rights to payment of a monetary obligation due to any Loan Party in connection with purchases of Inventory of such Loan Party in the ordinary course of business from (1) a credit card issuer or a credit card processor with respect to (a) credit cards issued by Visa, MasterCard, American Express, Discover, each of their respective Affiliates, and any other credit card issuers that are reasonably acceptable to the Administrative Agent, (b) private label credit cards of any Loan Party issued under non-recourse arrangements substantially similar to those in effect on the date hereof or (c) debit cards issued by issuers or providers that are reasonably acceptable to the Administrative Agent or (2) PayPal, Inc., Stripe, Square, Venmo, Apple Pay or any other e-commerce service providers or electronic payment services providers that are reasonably acceptable to the Administrative Agent, in each case, which have been earned by performance by such Loan Party but not yet paid to such Loan Party by such credit card issuer, credit card processor, or other service provider.

 

“Credit Card Agreement” means any agreement between (i) on the one hand, a Loan Party, and (ii) on the other hand (a) a credit card issuer or a credit card processor (including any credit card processor that processes purchases of Inventory from a Loan Party through debit cards) or (b) PayPal, Inc., Stripe, Square, Venmo, Apple Pay or any other e-commerce service providers or electronic payment services providers reasonably acceptable to the Administrative Agent, in each case, relating to any Credit Card Account included or intended to be included in the Borrowing Base.

 

“Credit Party” means the Administrative Agent or any other Lender.

 

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent and the Borrower Representative in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular Default, if any) has not been satisfied; (b) has notified any Borrower or any Credit Party in writing, or has made a public statement, to the effect that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular Default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party or any Borrower, in each case, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund its Loans, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt by such Credit Party and such Borrower of such certification in form and substance satisfactory to them and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event or a Bail-In Action.

 

“Designated Non-cash Consideration” means the Fair Market Value (as determined in good faith by the Company) of non-cash consideration received by the Company or a Restricted Subsidiary in connection with a Disposition that is so designated as Designated Non-cash Consideration pursuant to an officer’s certificate signed by a Financial Officer of the Company, setting forth such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

 

“Disbursement Letter” means a disbursement letter, in form and substance reasonably satisfactory to the Administrative Agent, by and among the Loan Parties, the Administrative Agent, the Lenders and the other Persons party thereto, and the related funds flow memorandum describing the sources and uses of all cash payments in connection with the transactions contemplated to occur on the Closing Date.

 

“Disposition” means with respect to any property, any sale, lease, sub lease (as lessor or sublessor), license, sale and leaseback, assignment, conveyance, transfer, license or other disposition thereof, or any exchange of property with, any Person, in one transaction or a series of transactions, of all or any part of any Loan Party’s businesses, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible, whether now owned or hereafter acquired, including, without limitation, the Equity Interests of any Loan Party (other than the Company), other than inventory (or other assets including cash and cash equivalents) sold, transferred,   licensed or otherwise transferred in the ordinary course of business or leased in the ordinary course of business. For purposes of clarification,

“Disposition” shall not include the creation of a Permitted Lien and shall include (a) the sale or other disposition for value of any contracts, (b) any disposition of property through a “plan of division” under the Delaware Limited Liability Company Act or any comparable transaction under any similar law, (c) the early termination or modification of any contract resulting in the receipt by any Loan Party of a cash payment or other consideration in exchange for such event (other than payments in the ordinary course for accrued and unpaid amounts due through the date of termination or modification) or (d) any sale of merchant accounts (or any rights thereto (including, without limitation, any rights to any residual payment stream with respect thereto)) by any Loan Party. The terms “Dispose” and “Disposed of” shall have correlative meanings.

 

“Disqualified Institution” means, on any date, (a) any Person designated by the Company as a “Disqualified Institution” by written notice delivered to the Administrative Agent on or prior to the date hereof and (b) any other Person that is a Competitor of the Company or any of its Subsidiaries, which Person has been designated by the Company as a “Disqualified Institution” by written notice to the Administrative Agent not less than five (5) Business Days prior to such date; provided that “Disqualified Institutions” shall exclude any Person that the Company has designated as no longer being a “Disqualified Institution” by written notice delivered to the Administrative Agent from time to time; provided further that, for the avoidance of doubt, a Competitor shall not include any bona fide debt fund or investment vehicle that is primarily engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business which is managed, sponsored or advised by any person controlling, controlled by or under common control with such Competitor or affiliate thereof, as applicable.

 

“Disqualified Stock” means any Equity Interests which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale), or is redeemable at the option of the holder thereof, in whole or in part (other than as a result of a change of control or asset sale), in each case at any time on or prior to the date that is 91 days after the Maturity Date, or (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) Indebtedness or (ii) any Equity Interests referred to in (a) above, in each case at any time prior to the date that is 91 days after the Maturity Date; provided, however, that only the portion of such Equity Interests which so matures or is mandatorily redeemable, is so redeemable at the option of the holder or is so convertible or exchangeable thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Equity Interests are issued to any employee or to any plan for the benefit of employees of the Company or their Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; provided, further, that any class of Equity Interests of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Equity Interests that are not Disqualified Stock shall not be deemed to be Disqualified Stock.

 

“Dollar Amount” means (a) with regard to any calculation denominated in U.S. Dollars, the amount thereof, and (b) with regard to any calculation denominated in any other currency, the amount of U.S. Dollars which is equivalent to the amount so expressed in such currency at the Spot Rate on the relevant date of determination.

 

“Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction located in the U.S.

 

“DQ List” has the meaning specified in Section 9.04(e).

 

“Early Opt-in Event” means a determination by the Administrative Agent that with respect to Loans which bear interest with reference to the LIBO Rate, U.S. dollar-denominated credit facilities being executed at such time, or that include language similar to that contained in Section 2.14(b), are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace the LIBO Rate for loans in U.S. Dollars.

 

“Ebuys” means Ebuys, Inc., a California corporation.

 

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

 

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

 

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

 

“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

 

“Electronic System” means any electronic system, including email, Syndtrak, e-fax, Intralinks®, ClearPar® and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

 

“Eligible Consigned Inventory” and all constituent definitions contained in such term as set forth in the ABL Credit Agreement shall have the meaning set forth in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“Eligible Credit Card Accounts” and all constituent definitions contained in such term as set forth in the ABL Credit Agreement shall have the meaning set forth in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“Eligible Inventory” and all constituent definitions contained in such term as set forth in the ABL Credit Agreement shall have the meaning set forth in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“Environment” shall mean any surface water, groundwater, drinking water supply, land surface or subsurface strata or ambient air.

 

“Environmental Indemnity” shall mean each environmental indemnity customary for syndicated loan transactions of this type, made by each Loan Party with respect to Mortgaged Property  in each case in form and substance reasonably satisfactory to the Administrative Agent.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, and all binding orders, decrees, judgments, injunctions, notices or agreements passed, adopted, issued, promulgated or entered into by any Governmental Authority, relating to protection of the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters to the extent related to exposure to Hazardous Materials.

 

“Environmental Liability” means (i) any obligation or responsibility of any Loan Party or any Restricted Subsidiary to comply with the terms of any order, decree, injunction, claim, notice or obligation of an agreement (including an Environmental Indemnity); or (ii) any obligation or responsibility of any Loan Party or any Restricted Subsidiary for damages, costs of environmental investigations or remediation, fines, or penalties of any Loan Party or Restricted Subsidiary, either of which is resulting from or based upon (a) a violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials resulting in physical injury or property damage or a claim of such injury or property damage, (d) the Release or threatened Release of any Hazardous Materials into the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed by or imposed upon any Loan Party or any Restricted Subsidiary with respect to the foregoing clauses (i) or (ii).

 

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing (but excluding any debt security that is convertible into, or exchangeable for, Equity Interests).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with a Loan Party, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Loan Party or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination or partial termination of any Plan; (e) the receipt by any Loan Party or any ERISA Affiliate from the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Loan Party or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of any Loan Party or any ERISA Affiliate from any Multiemployer Plan; (g) the receipt by any Loan Party or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Loan Party or any ERISA Affiliate of any notice, concerning the imposition upon any Loan Party or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent (within the meaning of Title IV of ERISA), in “at‑risk” status (as defined in Section 303(i) of ERISA or

Section 430(i) of the Code) or in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA); (h) the failure to timely make a contribution required to be made with respect to any Plan or Multiemployer Plan; or (i) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to any Plan.

 

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

 

“European Union” means the region comprised of member states of the European Union pursuant to the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1986 and the Maastricht Treaty (signed February 7, 1992), as amended from time to time.

 

“Event of Default” has the meaning assigned to such term in Article VII.

 

“Excluded Asset” has the meaning assigned to such term in the applicable Security Agreement.

 

“Excluded Domestic Subsidiary” means, each of (a) Article II JV, (b) BC/VC, (c) Camuto Overseas Holding Subsidiary LLC, an Ohio limited liability company, and any other CFC Holdco, (d) any Domestic Subsidiary that is a direct or indirect Subsidiary of a CFC and (e) any other Domestic Subsidiary of any Loan Party formed or otherwise acquired after the date hereof if the execution of a Joinder Agreement and the Guarantee of the U.S. Obligations (or, if applicable, a pledge of 100% of such Subsidiary’s issued and outstanding shares of Equity Interests entitled to vote) would cause material adverse Tax consequences to any Loan Party or any Affiliate of a Loan Party (pursuant to Section 956 of the Code and the Treasury Regulations promulgated thereunder, or otherwise) in the mutual good-faith determination of the Company and the Administrative Agent.

 

“Excluded Subsidiary” means each (a) Immaterial Subsidiary, (b) Unrestricted Subsidiary, (c) Excluded Domestic Subsidiary (other than, with respect to the Canadian Obligations, any CFC Holdco that owns equity interests of one or more Canadian Subsidiaries), (d) Foreign Subsidiary (other than Canadian Subsidiaries with respect to the Canadian Obligations), (e) Subsidiary that is not a Wholly Owned Subsidiary, (f) Subsidiary that is prohibited by applicable law, rule or regulation or by any contractual obligation (if, with respect to any such contractual obligations, such contractual obligations were existing on the date hereof or existing at the time of acquisition thereof after the date hereof), in each case from guaranteeing the U.S. Obligations or Canadian Obligations, as applicable, or that would require governmental (including regulatory) consent, approval, license or authorization to provide a guarantee unless such consent, approval, license or authorization has been received, (g) other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent (confirmed in writing by notice to the Company), the cost or other consequences of becoming a Guarantor shall be excessive in view of the benefits to be obtained by the Lenders therefrom and (h) any other Subsidiary if, in the mutual good faith determination of the Company and the Administrative Agent, a guarantee by such Subsidiary would result in materially adverse Tax consequences to the Company or any of its Subsidiaries; provided that any Subsidiary of the Company that is a guarantor of the obligations under the ABL Credit Agreement shall become a Guarantor hereunder, subject to Section 9.20.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income or capital (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with

respect to an applicable interest in a Loan or Commitment or otherwise under a Loan Document pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment or becomes a Lender hereunder (other than pursuant to an assignment request by the Borrowers under Section 2.19(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office; (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f); (d) any U.S. Federal withholding Taxes imposed under FATCA; and (e) any Canadian federal withholding Taxes imposed on the payment as a result of having been made to a Recipient that, at the time of making such payment, (i) is a person with which a Loan Party does not deal at arm’s length (for the purposes of the ITA), or (ii) is a “specified shareholder” (as defined in subsection 18(5) of the ITA) of a Loan Party or does not deal at arm’s length (for the purposes of the ITA) with such a “specified shareholder” (other than where the non-arm’s length relationship arises, or where the Recipient is a “specified shareholder” or does not deal at arm’s length with a “specified shareholder”, in connection with or as a result of the Recipient having become a party to, received or perfected a security interest under or received or enforced any rights under, a Loan Document).

 

“Existing Credit Agreement” means that certain Credit Agreement, dated as of August 25, 2017, by and among the Company, certain Subsidiaries of the Company, PNC Bank, National Association, as administrative agent, and a syndicate of lenders, as amended.

 

“Existing Owned Real Property” means the real property owned by the Loan Parties as of the date hereof and described on Schedule 1.01(c).

 

“Extraordinary Receipts” means any cash received by the Company or any of its Restricted Subsidiaries not in the ordinary course of business (and not consisting of proceeds described in Section 2.11(b)(i) or (b)(ii) hereof), including, without limitation, (a) foreign, United States, state or local tax refunds (including the CARES Act Tax Refund Proceeds but excluding sales tax refunds), (b) pension plan reversions, (c) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action (other than to the extent such judgments, proceeds of settlements or other consideration are (i) immediately payable to a Person that is not an Affiliate of the Company or any of its Restricted Subsidiaries or (ii) received by the Company or any of its Restricted Subsidiaries as reimbursement for any costs or damages previously incurred or any payment previously made by such Person), (d) condemnation awards (and payments in lieu thereof), (e) indemnity payments and (f) any purchase price adjustment received in connection with any purchase agreement.

 

“Factoring Agreements” means receivables purchase or factoring agreements entered into by one or more Camuto Entities and The CIT Group/Commercial Services, Inc. or other Person satisfactory to the Administrative Agent, as such agreements may be amended, modified, supplemented, restated or replaced from time to time; provided that, any amendments, modifications, restatements or replacements of the Factoring Agreements in effect on the Closing Date that are materially adverse to the interests of the Lenders shall only be made with the consent of the Administrative Agent; provided further that, (a) none of the Company or any Restricted Subsidiary thereof (other than any Camuto Entity) shall become party to any such agreement pursuant to any such agreement, amendment, modification, supplement, restatement or replacement and (b) such receivables purchase or factoring agreements shall not include any obligation of the Company or any Restricted Subsidiary thereof  in respect of borrowed money.

 

“Fair Market Value” means, with respect to any asset or property, the price which could be negotiated in an arm’s-length transaction, for cash, between a willing seller and a willing and able buyer with neither party being compelled to buy or sell and, with respect to any Mortgage, the amount as

reasonably determined by the applicable Loan Party based upon any recent appraisal, broker assessment of value or real property Tax assessment.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities entered into in connection with the implementation of the foregoing.

 

“Federal Funds Effective Rate” shall mean, for any day, the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) calculated by the Federal Reserve Bank of New York (or any successor), based on such day’s federal funds transactions by depositary institutions, as determined in such manner as such Federal Reserve Bank (or any successor) shall set forth on its public website from time to time, and as published on the next succeeding Business Day by such Federal Reserve Bank as the “Federal Funds Effective Rate”; provided, if such Federal Reserve Bank (or its successor) does not publish such rate on any day, the “Federal Funds Effective Rate” for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three major banks of recognized standing selected by it; provided, further, if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Fee Letter” means that certain fee letter, dated as of the date hereof, executed by the Company and the Administrative Agent, as amended, amended and restated, supplemented or otherwise modified from time to time by the parties thereto.

 

“Finance Lease” means, with respect to any Person, any lease of any real or personal property by such Person as lessee that, in conformity with GAAP, is accounted for as a finance lease on the balance sheet of such Person.

 

“Finance Lease Obligations” means, with respect to any Person and a Finance Lease, the amount of the obligation of such Person as the lessee under such Finance Lease which would, in accordance with GAAP, appear as a liability on a balance sheet of such Person.

 

“Financial Officer” means with respect to the Company, its President, Chief Executive Officer, Chief Financial Officer, Treasurer or Controller, or other duly elected officer of the Borrower Representative reasonably acceptable to the Administrative Agent.

 

“Fixed Charge Coverage Ratio” means, for any period of determination with respect to the Company and its Restricted Subsidiaries, the ratio of (a) Consolidated EBITDA for such period minus the sum of (i) Unfinanced Capital Expenditures plus (ii) the portion of taxes based on income actually paid in cash and provisions for cash income taxes, to (b) Fixed Charges for such period.

 

“Fixed Charges” means, for any period of determination, the sum of (a) any scheduled amortization payments paid or payable during such period on all Indebtedness of the Company and its Restricted Subsidiaries (including the principal component of all obligations in respect of all Finance Lease Obligations), plus (b) consolidated cash Interest Expense of the Company and its Restricted Subsidiaries for such period, plus (c) solely for the purposes of calculating the Fixed Charge Coverage Ratio when determining compliance with the Payment Conditions for the making of a Restricted Payment, the amount of Restricted Payments (if applicable) to be made at such time and Restricted

Payments previously made in cash in reliance on the Payment Conditions during such period, in each case, on a consolidated basis in accordance with GAAP.

 

“Flood Laws” means, collectively, (i) the National Flood Insurance Reform Act of 1994 (which comprehensively revised the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973) as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Reform Act of 2004 as now or hereafter in effect or any successor statute thereto, (iii) the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto, and (iv) related legislation.

 

“Foreign Benefit Event” means, with respect to any Foreign Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any applicable Law, or in excess of the amount that would be permitted under any applicable Requirements of Law absent a waiver from a Governmental Authority, (b) the failure to make the required contributions, under any applicable Requirement of Law, on or before the date such contributions are due, except where the failure to do so would not reasonably be expected to result in a material liability or is due to an administrative error that is corrected, (c) the receipt of a notice by a Governmental Authority relating to the intention to terminate any such Foreign Plan or to appoint a trustee or similar official to terminate any such Foreign Plan, or alleging the insolvency of any such Foreign Plan, (d) the incurrence of any additional liability by any Borrower, any Restricted Subsidiary of a Borrower or any Loan Party under applicable Requirements of Law on account of the complete or partial termination of such Foreign Plan or the complete or partial withdrawal of any participating employer therein or (e) the occurrence of any transaction that is prohibited under any applicable Requirements of Law and that would reasonably be expected to result in the incurrence of any material liability by any Borrower or any Restricted Subsidiary of a Borrower.

 

“Foreign Lender” means (a) if a Borrower is a U.S. Person, a Lender, with respect to such Borrower, that is not a U.S. Person, and (b) if a Borrower is not a U.S. Person, a Lender, with respect to such Borrower, that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for Tax purposes.

 

“Foreign Plan” means any plan established under the law of a jurisdiction other than the United States or Canada (or a state, province, territory or local government thereof) primarily for employees or former employees outside the United States of America and Canada, that is established, maintained or contributed to by a Borrower or any of its Restricted Subsidiaries or Affiliates and which provides pension, retirement or savings benefits through a trust or other funding vehicle, other than any state social security arrangements.

 

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

 

“GAAP” means accounting principles generally accepted in the U.S., consistently applied.

 

“Governmental Authority” means the government of the United States of America, Canada, any other nation or any political subdivision thereof, whether provincial, territorial, state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and

including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include (i) warranties or indemnities made in trade contracts, asset sale agreements, acquisition agreements, commitment letters, engagement letters and brokerage and deposit agreements in the ordinary course of business, and warranties and indemnities to lenders in any documents evidencing Indebtedness permitted pursuant to Section 6.01 with respect to the guarantor, (ii) any indemnities made in connection with liability of a Person’s directors, officers and employees in their capacities as such as permitted by applicable law, (iii) any contingent liability arising from the endorsement of negotiable or other instruments for deposit or collection in the ordinary course of business, and (iv) any continuing liability of the Company or its Subsidiaries as a lessee under a lease after such lease has been assigned or subleased by such Person.

 

“Guaranteed Obligations” means U.S. Guaranteed Obligations or Canadian Guaranteed Obligations, as the context requires.

 

“Guarantors” means all U.S. Guarantors and Canadian Guarantors.

 

“Hazardous Material” means: (a) any substance, material, or waste that is included within the definitions of “hazardous substances,” “hazardous materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic waste,” or words of similar import in any Environmental Law; (b) those substances listed as hazardous substances by the United States Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is (i) petroleum, petroleum derivative or fraction, or a petroleum by-product, (ii) asbestos or asbestos-containing material, (iii) polychlorinated biphenyls, (iv) perfluoralkyl or polyfluoralkyl substances, (v) ozone depleting substances, (vi) radon gas or (vii) a pesticide, herbicide, or other substance regulated under the Federal Insecticide, Fungicide and Rodentide Act (“FIFRA”), 7 U.S.C. §136 et seq.

 

“Immaterial Subsidiary” shall mean any Subsidiary (other than a Borrower) designated by the Borrower Representative to the Administrative Agent as an “Immaterial Subsidiary” and that meets each of the following criteria as of the last day of the most recent fiscal quarter for which financial statements have been delivered to the Administrative Agent pursuant to Sections 5.01(a) or (b): (a) such Subsidiary and its Subsidiaries accounted for less than (x) 2.5% of Total Assets at such date and (y) 2.5% of the consolidated revenues of the Company and its Subsidiaries for the most recent four fiscal quarter period ending on such date, (b) all Immaterial Subsidiaries and their respective Subsidiaries accounted for less than (x) 5.0% of Total Assets at such date and (y) 5.0% of the consolidated revenues of the Company and its Subsidiaries for the most recent four fiscal quarter period ending on such date, and (c) such Subsidiary and its Subsidiaries do not own any Material Real Property, Material Intellectual Property, Equity Interests of the IPCo JV or the CARES Act Tax Refund Proceeds; provided, that no Subsidiary shall be or be designated as an “Immaterial Subsidiary” if such Subsidiary has provided a Guaranty of, or pledged any Collateral as security for, the ABL Credit Facility (unless such Guaranty or pledge, as applicable, is released prior to or substantially concurrently with such designation).  Each Immaterial Subsidiary as of the date hereof shall be set forth in Schedule 1.01(d), and the Borrower Representative shall update such Schedule from time to time after the date hereof as necessary to reflect all Immaterial Subsidiaries at such

time (the selection of Subsidiaries to be added to or removed from such Schedule to be made as the Borrower may determine).

 

“Increased BBC Reporting Period” means any period (i) commencing at any time when Availability shall be less than the greater of (x) $60,000,000 and (y) 17.5% of the Maximum Credit Amount, in either case, for a period of three (3) consecutive Business Days and (ii) ending when Availability shall have been greater than or equal to the greater of (x) $60,000,000 and (y) 17.5% of the Maximum Credit Amount, in either case, for a period of forty-five (45) consecutive Business Days.

 

“Incur” means issue, assume, guarantee, incur or otherwise be or become liable for; provided, however, that any Indebtedness or Equity Interests of a Person existing at the time such person becomes a Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. “Incurred” and “Incurrence” shall have like meanings.

 

“Indebtedness” means, with respect to any Person:

 

(1)         the principal amount of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that constitutes (i) a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business, (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP, (iii) obligations accounted for as an operating lease in conformity with GAAP, and (iv) liabilities accrued in the ordinary course of business), (d) in respect of Finance Lease Obligations, (e) all obligations and liabilities, contingent or otherwise, of such Person, in respect of letters of credit, acceptances and similar facilities, and (f) all monetary obligations that qualify as indebtedness in accordance with GAAP under any receivables factoring, receivable sales or similar transactions and all attributable indebtedness calculated in accordance with GAAP under any synthetic lease, tax ownership/operating lease, off-balance sheet financing or similar financing;

 

(2)         to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

 

(3)         to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of:  (a) the Fair Market Value (as determined in good faith by the Company) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person;

 

provided, however, that, notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) trade and other ordinary course payables and accrued expenses arising in the ordinary course of business; (5) in the case of the Company and the Subsidiaries, (x) all intercompany Indebtedness solely between the Company and the Restricted Subsidiaries having a term not exceeding 364 days (inclusive of any roll-over or extensions of terms) and made in the ordinary course of business and (y) intercompany liabilities in connection with cash management, tax and accounting operations of the Company and the Subsidiaries; and (6) any Swap Agreement Obligations; provided that such agreements are entered into

for bona fide hedging purposes of the Company and the Subsidiaries (as determined in good faith by the board of directors or senior management of the Company, whether or not accounted for as a hedge in accordance with GAAP) and, in the case of any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement, such agreements are related to business transactions of the Company and the Subsidiaries entered into in the ordinary course of business and, in the case of any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement, such agreements substantially correspond in terms of notional amount, duration and interest rates, as applicable, to Indebtedness of the Company or the Subsidiaries Incurred without violation of this Agreement.

 

Notwithstanding anything in this Agreement to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Financial Accounting Standards Board Accounting Standards Codification 815 (or any other Accounting Standards Codification or Financial Accounting Standards having a similar result or effect or any successor thereto) to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Agreement as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Agreement but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Agreement.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by, or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in subsection (a), Other Taxes.

 

“Indemnitee” has the meaning assigned to such term in Section 9.03(b).

 

“Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith determination of the Company, qualified to perform the task for which it has been engaged.

 

“Ineligible Institution” has the meaning assigned to such term in Section 9.04(b).

 

“Initial Appraisal” has the meaning assigned to such term in Section 5.07(b).

 

“Initial Field Examination” has the meaning assigned to such term in Section 5.07(a).

 

“Information” has the meaning assigned to such term in Section 9.12.

 

“Insolvency Laws” means each of the Bankruptcy Code, the BIA, the CCAA, the Winding-Up and Restructuring Act (Canada), in each case as amended, and any other applicable state, provincial, territorial or federal bankruptcy laws, each as now and hereafter in effect, any successors to such statutes and any other applicable insolvency or other similar law of any jurisdiction, including any corporate law of any jurisdiction permitting a debtor to obtain a stay or a compromise of the claims of its creditors against it and including any rules and regulations pursuant thereto.

 

“Intellectual Property” means all present and future:  trade secrets, know-how and other proprietary information; trademarks, trademark applications, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights and copyright applications (including copyrights for computer

programs) and all tangible and intangible property embodying the copyrights, unpatented inventions (whether or not patentable); patents and patent applications; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, customer lists, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing.

 

“Intercompany Subordination Agreement” means the Intercompany Subordination Agreement, to be entered into as of the Closing Date, among the Company and its Subsidiaries, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders, as amended, amended and restated, supplemented or otherwise modified from time to time.

 

“Interest Election Request” means a request by the Borrower Representative to convert or continue a Borrowing in accordance with Section 2.08, which shall be in the form of Exhibit E or any other form approved by the Administrative Agent.

 

“Interest Expense” means, with respect to any Person for any fiscal period, interest expense of such Person determined in accordance with GAAP for the relevant period ended on such date.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, (i) the last Business Day of each month, commencing on the first such date to occur after the Closing Date, and (ii) the Maturity Date, (b) with respect to any LIBOR Loan, (i) the last Business Day of each month commencing on the first such date to occur after the Closing Date, and (ii) the last Business Day of each Interest Period applicable to such Loan.

 

“Interest Period” means, with respect to any LIBOR Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, or three months thereafter, as the Borrower Representative may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

 

“Inventory” has the meaning assigned to such term in each Security Agreement, as applicable.

 

“Investments” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions, repayments of intercompany Indebtedness pursuant to clauses (a) and (b) of the definition of “Junior Indebtedness”, purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of “Unrestricted Subsidiary” and Section 6.02:

 

(1) “Investments” shall include the portion (proportionate to the Company’s direct or indirect equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by the

Company) of the net assets of such Subsidiary at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

 

(a)          its “Investment” in such Subsidiary at the time of such redesignation less

 

(b)         the portion (proportionate to its direct or indirect equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by the Company) of the net assets of such Subsidiary at the time of such redesignation; and

 

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by the Company) at the time of such transfer.

 

“IPCo JV” means ABG-Camuto, LLC, a Delaware limited liability company.

 

“IPCo JV Consent and Pledge” means (i) a consent, duly executed by each member of the IPCo JV, to permit the pledge in favor of the Administrative Agent of the Equity Interests of the IPCo JV owned by the Loan Parties and (ii) a pledge in favor of the Administrative Agent of the Equity Interests of the IPCo JV owned by the Loan Parties.

 

“IRS” means the United States Internal Revenue Service.

 

“ITA” means the Income Tax Act (Canada), as amended.

 

“Joinder Agreement” means a Joinder Agreement in substantially the form of Exhibit F.

 

“Joint Venture” means a corporation, partnership, limited liability company or other entity (excluding any Subsidiary) in which any Person other than a Loan Party or any Subsidiary holds, directly or indirectly, an equity interest.

 

“Joint Venture Equity Interests” has the meaning given to such term in Section 3.02.

 

“Junior Indebtedness” means (a) unsecured Indebtedness for borrowed money (other than intercompany Indebtedness owing to the Company or to a Subsidiary if an Investment in such Subsidiary by the obligor of such Indebtedness in such amount would be permitted at such time; provided that any repayment of such Indebtedness will be deemed an Investment in such Subsidiary in such amount) and (b) any Indebtedness which is by its terms subordinated in right of payment or lien priority to the Obligations (other than (x) intercompany Indebtedness owing to the Company or to a Subsidiary if an Investment in such Subsidiary by the obligor of such Indebtedness in such amount would be permitted at such time; provided that any repayment of such Indebtedness will be deemed an Investment in such Subsidiary in such amount and (y) ABL Obligations).

 

“Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a Lender hereunder pursuant to Section 2.09 or an Assignment and Assumption, other than any such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption.

 

“LIBO Rate” means, with respect to any LIBOR Borrowing for any Interest Period, the applicable Screen Rate as of 11:00 a.m., London time two (2) Business Days prior to the first day of such Interest Period, with a maturity comparable to such Interest Period.

 

“LIBOR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate, the LIBO Rate.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, hypothecation, charge, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement or any lease in the nature thereof); provided that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.

 

“Liquidity” means the sum of (i) Qualified Cash of the Loan Parties plus (ii) Availability in excess of the Availability required to satisfy the covenant in Section 6.12.

 

“Loan Documents” means, collectively, this Agreement, any promissory notes issued pursuant to this Agreement, the Collateral Documents, the Loan Guaranty, the Intercompany Subordination Agreement, any Environmental Indemnity (if any), the Fee Letter, each Compliance Certificate any Borrowing Base Certificate any promissory notes issued hereunder, and any and all other instruments, agreements, documents and writings executed in connection with the foregoing which the Company and the Administrative Agent agree in writing is a “Loan Document.” Any reference in this Agreement or any other Loan Document to a Loan Document shall include all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

 

“Loan Guaranty” means the U.S. Guaranty and the Canadian Guaranty.

 

“Loan Parties” means, collectively, the Borrowers and the Guarantors and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and assigns, and the term “Loan Party” shall mean any one of them or all of them individually, as the context may require.

 

“Loans” means the loans and advances made by the Lenders or the Administrative Agent pursuant to this Agreement, including Term Loans and Protective Advances.

 

“Material Adverse Effect” means any set of circumstances or events which (a) is material and adverse to the business, properties, assets or financial condition of the Loan Parties and their Subsidiaries taken as a whole, (b) impairs materially the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or the ability of the Loan Parties taken as a whole to duly and punctually pay or perform any of the Obligations, (c) has a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party, (d) has a material adverse effect upon the Collateral, or (e) has a material adverse effect upon the Administrative Agent’s Liens (on behalf of itself and other Secured Parties) on the Collateral or the priority of such Liens; provided, however, during the period from the date hereof through January 30, 2021, solely for purposes of clauses (a) and (d) of this definition of “Material Adverse Effect”, a Material Adverse Effect shall not arise or be determined to exist as a result of the COVID-19 pandemic and all events, conditions or circumstances arising out of, resulting from or relating thereto to the extent that the impacts of COVID-19 on the business, properties, assets or financial condition of the Loan Parties and their Subsidiaries, taken as a whole, do not materially disproportionately impact the Loan Parties and their Subsidiaries, taken as a whole, relative to other similarly situated companies in the same industry as the Loan Parties that are operating in the United States (for the avoidance of doubt, clauses (b), (c) and (e) of the definition of Material Adverse Effect shall not be impacted in any way by the impact of the COVID-19 pandemic).

 

“Material Event” means, with respect to Mortgaged Property (if any) (a) any portion thereof (the loss of which shall have, in the Permitted Discretion of the Administrative Agent, a material and adverse impact on the use, operation or value of thereof) has been damaged by a Casualty or taken through a condemnation, either temporarily or permanently, or (b) any waste, impairment, deterioration or abandonment of such Real Estate has occurred (which shall have, in the Permitted Discretion of the Administrative Agent, a material and adverse impact on the use, operation or value of thereof) other than as a result of (i) ordinary wear and tear and (ii) depreciation in accordance with GAAP.

 

“Material Intellectual Property” means trademarks, trademark applications, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights and copyright applications (including copyrights for computer programs) and all tangible and intangible property embodying the copyrights, unpatented inventions (whether or not patentable); patents and patent applications; industrial design applications and registered industrial designs; customer lists; license agreements related to any of the foregoing and income therefrom; in each case, that accounts for $5,000,000 or more, individually or in the aggregate, of the revenues of Company and its Subsidiaries or that has a Fair Market Value of $5,000,000 or more, individually or in the aggregate (as determined by the Agent and the applicable Loan Party in good faith).

 

“Material Real Property” means the (i) Existing Owned Real Property and (ii) any fee owned real property having a Fair Market Value in excess of $5,000,000 as of the date of the acquisition thereof.

 

“Maturity Date” means the earlier to occur of (i) the date that is five (5) years after the Closing Date and (ii)  the date on which Loans shall become due and payable in full hereunder, whether by acceleration or otherwise.

 

“Maximum Credit Amount” means “Maximum Credit Amount” as defined in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“Maximum Rate” has the meaning assigned to such term in Section 9.18.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgage” means any mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the Administrative Agent, in form and substance satisfactory to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, on real property of a Loan Party, including any amendment, restatement, modification or supplement thereto.

 

“Mortgaged Property” shall mean, collectively, the Real Estate subject to the Mortgages.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Net Orderly Liquidation Value” means, with respect to Inventory of any Person, “Net Orderly Liquidation Value” as defined in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“Net Proceeds” means, (a) with respect to any Disposition, an amount equal to: (i) the cash proceeds received in respect of such Disposition, minus (ii) any  direct costs incurred in connection with

such Disposition to the extent paid or payable to third parties (other than Affiliates), including (A) Taxes (including transfer Taxes, deed or recording Taxes and repatriation Taxes or any withholding or deduction) paid (or reasonably estimated to be payable) in connection with such Disposition during the Tax period the sale occurs, (B) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such Disposition, and (C) a reasonable reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of such Disposition undertaken by the Company or any of its Restricted Subsidiaries in connection with such Disposition; provided that upon release of any such reserve, the amount released shall be considered Net Proceeds; and (b) with respect to any Casualty, (i) the cash proceeds received in respect of such event including (A) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received and (B) insurance proceeds (net of any Taxes imposed in respect of the receipt or accrual thereof), minus (ii) the sum of (A) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (B) the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) that is secured by a Lien in such asset that is not Collateral or is senior to the Liens securing the Secured Obligations or, other than with respect to assets that are Collateral in which the Administrative Agent has a first priority Lien, otherwise subject to mandatory prepayment as a result of such event and (C) the amount of all Taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year (or, if different, the Tax period) that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer of the Borrower Representative).

 

“Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).

 

 “Obligated Party” means a U.S. Obligated Party or a Canadian Obligated Party, as the context requires.

 

“Obligations” means, individually and collectively as the content may require, the U.S. Obligations and the Canadian Obligations.

 

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan or any Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).

 

“Overnight Bank Funding Rate” shall mean, for any, day the rate per annum (based on a year of 360 days and actual days elapsed) comprised of both overnight federal funds and overnight eurocurrency borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the Federal Reserve Bank of New York, as set forth on its public website from time to time, and as published on the next succeeding Business Day as the overnight bank funding rate by such Federal Reserve Bank (or by such other recognized electronic source (such as Bloomberg) selected by the Administrative Agent for the purpose of displaying such rate); provided, that if such day is not a Business Day, the Overnight Bank Funding Rate for such day shall be such rate on the immediately preceding Business Day; provided, further, that if such rate shall at any time, for any reason, no longer exist, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error).  If the Overnight Bank Funding Rate determined as above would be less than zero, then such rate shall be deemed to be zero for purposes of this Agreement. The rate of interest charged shall be adjusted as of each Business Day based on changes in the Overnight Bank Funding Rate without notice to the Loan Parties.

 

“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

 

“Participant” has the meaning assigned to such term in Section 9.04(c).

 

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

 

“Payment Conditions” means, at the time of determination with respect to any specified transaction or payment, that:

 

(a)          no Default or Event of Default then exists or would arise as a result of entering into such transaction or the making such payment;

 

(b)          immediately after giving effect to such transaction or payment, one of the following tests shall be satisfied:

 

(i)          (1) Liquidity for the 90 consecutive day period immediately preceding such specified transaction or payment shall not have been less than $250,000,000, (2) Liquidity on the date of such specified transaction or payment shall not be less than $250,000,000 and (3) the Fixed Charge Coverage Ratio, based on the most recently completed Test Period and for which financial statements have been, or have been required to be delivered to the Administrative Agent, shall not be less than 1.10 to 1.00; or

 

(ii)         (1) the aggregate outstanding principal amount of the Term Loan is less than or equal to $175,000,000 prior to the making of such specified transaction or payment, (2) Liquidity for the 90 consecutive day period immediately preceding such specified transaction or payment shall not have been less than $150,000,000, (3) Liquidity on the date of such specified transaction or payment shall not be less than $150,000,000, and (4) the Fixed Charge Coverage Ratio, based on the most recently completed Test Period and for which financial statements have been, or have been required to be delivered to the Administrative Agent, shall not be less than 1.00 to 1.00; and

 

(c)        the Administrative Agent shall have received a certificate from a Responsible Officer of the Borrower Representative, including an updated Borrowing Base Certificate (as applicable), certifying as to compliance with the preceding clauses and demonstrating (in reasonable detail) the calculations required thereby; provided that no such certificate shall be required for any

 

“Payment Office” shall mean initially 2100 McKinney Ave Ste 1500, Dallas, TX 75252; thereafter, such other office or account of the Administrative Agent, if any, which it may designate by notice to the Borrower Representative and to each Lender to be the Payment Office.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

 

“Permitted Acquisition” means any Acquisition by the Company or any Restricted Subsidiary in a transaction that satisfies each of the following requirements:

 

 

(b)         if a Loan Party is acquiring the ownership interests in a Domestic Subsidiary (other than an Excluded Subsidiary) or in a Canadian Subsidiary (other than an Excluded Subsidiary), such Person shall execute a Joinder Agreement and such other documents required by Section 5.14 and join this Agreement as a Borrower or Guarantor pursuant to Section 5.14;

 

(c)         the board of directors or other equivalent governing body of such Person shall have approved such Acquisition and the Loan Parties also shall have delivered to the Administrative Agent and the Lenders written evidence of the approval of the board of directors (or equivalent body) of such Person for such Acquisition;

 

(d)          each applicable Governmental Authority shall have approved such Acquisition and the Loan Parties shall have delivered to the Administrative Agent and the Lenders written evidence of the approval of such Governmental Authority or such Acquisition;

 

(e)        the business, division, product line or line of business acquired, or the business conducted by the Person whose ownership interests are being acquired, as applicable, shall be engaged in a business otherwise permitted to be engaged in by a Loan Party under this Agreement;

 

(f)          the assets being acquired (other than a de minimis amount of assets in relation to the assets being acquired) are located within the United States or Canada or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within the United States or Canada;

 

(g)         the Loan Parties shall deliver to the Administrative Agent at least five (5) Business Days before (or such shorter timeframe as may be agreed to by the Administrative Agent in its sole discretion) such Acquisition (i) notice of such Acquisition, (ii) copies of (x) any agreements entered into or proposed to be entered into by such Loan Parties in connection with such Acquisition, (y) such other information about such Person or its assets as the Administrative Agent or any Lender may reasonably require, (iii) if the Consideration payable in respect of the proposed Acquisition is greater than $10,000,000, pro forma financial statements of the Company and its Subsidiaries after the consummation of such Acquisition and (iv) if the Consideration payable in respect of the proposed Acquisition is greater than $10,000,000, a certificate of a Financial Officer of the Company, demonstrating on a pro forma basis compliance, as at

 

(h)         such Acquisition shall be effected in such a manner so that the acquired assets or Equity Interests are owned either by a Loan Party or a Wholly Owned Subsidiary of a Loan Party and, if effected by merger or consolidation involving a Loan Party, such Loan Party shall be the continuing or surviving Person;

 

(i)          the assets being acquired or the Person whose Equity Interests are being acquired did not have negative Consolidated EBITDA during the 12 consecutive month period most recently concluded prior to the date of execution of the definitive acquisition agreement, provided that, if the proposed Acquisition is not consummated on or prior to the date that is 60 days from the date of execution of the definitive acquisition agreement relating to such Acquisition, the date of the proposed Acquisition;

 

(j)          if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of Regulation U; and

 

(k)        the aggregate Consideration for all Permitted Acquisitions does not exceed (i) $10,000,000 in the aggregate in respect of any single Permitted Acquisition or series of related Permitted Acquisitions and (ii) $25,000,000 in the aggregate in respect of all Permitted Acquisitions during the term of this Agreement; provided that, (A)(x) if the Loan Parties shall have satisfied the Payment Conditions before and immediately after giving effect to such Permitted Acquisition and (y) the assets being acquired (other than a de minimis amount of assets in relation to the assets being acquired) are located within the United States or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within the United States, then the aggregate Consideration for all Permitted Acquisitions shall be increased to (1) $75,000,000 in the aggregate in respect of any single Permitted Acquisition or series of related Permitted Acquisitions and (2) $150,000,000 in the aggregate in respect of all Permitted Acquisitions during the term of this Agreement and (B) if the conditions set forth in the preceding clauses (A)(x) and (A)(y) are satisfied but the condition set forth in clause (i) of the definition of “Permitted Acquisition” is not satisfied with respect to such Permitted Acquisition, but the assets being acquired or the Person whose Equity Interests are being acquired has positive Consolidated EBITDA (on a pro forma basis after giving effect to adjustments that are reasonably satisfactory to the Administrative Agent) for the 12 consecutive month period most recently concluded prior to the date of execution of the definitive acquisition agreement, provided that, if the proposed Acquisition is not consummated on or prior to the date that is 60 days from the date of execution of the definitive acquisition agreement relating to such Acquisition, the date of the proposed Acquisition, then the aggregate Consideration for all Permitted Acquisitions shall be increased to (x) $50,000,000 in the aggregate in respect of any single Permitted Acquisition or series of related Permitted Acquisitions and (y) $100,000,000 in the aggregate in respect of all Permitted Acquisitions during the term of this Agreement.

 

“Permitted Discretion” means a determination made by the Administrative Agent in the exercise of its reasonable (from the perspective of a secured term loan lender) credit judgment, exercised in good faith in accordance with customary business practices in the retail industry.

 

“Permitted Holders” means Jay L. Schottenstein, Affiliates Controlled by him and his Affiliated Holders.

 

“Permitted Investments” means:

 

(1)         any Investment in the Company or any Restricted Subsidiary; provided that the aggregate amount of Investments by Loan Parties in Restricted Subsidiaries that are not Loan Parties in reliance on this Clause (1) shall not exceed (when combined with Investments made by Loan Parties in Subsidiaries that are not (or do not become in connection with such transaction) Loan Parties in reliance on Clauses (3), (21) and (22) of the definition of Permitted Investments) $10,000,000 (or, if the aggregate outstanding principal amount of the Term Loan is less than or equal to $150,000,000 immediately prior to the making of such Investment, $20,000,000); provided further that the aggregate amount of Investments by U.S. Loan Parties in Canadian Loan Parties in reliance on this Clause (1) shall not exceed $10,000,000 (or, if the aggregate outstanding principal amount of the Term Loan is less than or equal to $150,000,000 immediately prior to the making of such Investment, $20,000,000); provided, further that, upon written notice from a Responsible Officer of the Borrower Representative to the Administrative Agent, the dollar amounts set forth in the foregoing provisos shall be reset at $10,000,000 and $10,000,000 respectively on any such date as the Payment Conditions become satisfied (or, if the aggregate outstanding principal amount of the Term Loan is less than or equal to $150,000,000 immediately prior to the making of such Investment, $20,000,000 and $20,000,000 respectively as the Payment Conditions become satisfied) (it being understood that such written notice shall include an updated Borrowing Base Certificate (as applicable) and calculations (in reasonable detail) demonstrating compliance with the Payment Conditions); provided, further that, with respect to any such Investment (in a single transaction or a series of related transactions) consisting of assets constituting ABL Priority Collateral or Canadian Collateral of the type eligible to be included in the Borrowing Base that decreases the Borrowing Base by $2,500,000 or more (after giving effect thereto), the Borrower Representative shall have first delivered an updated Borrowing Base Certificate to the Administrative Agent giving pro forma effect to such Investment and demonstrating pro forma compliance with Section 6.12;

 

(2)         any Investment in (A) cash, (B) Cash Equivalents, (C) short term tax-exempt securities rated not lower than BBB by S&P, Baa2 by Moody’s or an equivalent rating by Fitch with provisions for liquidity or maturity accommodations of two (2) years or less; (D) investments in other readily marketable securities (excluding any equity or equity-linked securities other than auction rate preferred securities) which are rated P1 or P2 by Moody’s, A1 or A2 by S&P or F1 or F2 by Fitch (in lieu of a short term rating, a long term rating of not less than A2 by Moody’s, A by S&P or an equivalent rating by Fitch would qualify under this sub-clause (vii), provided that no such security position shall exceed five percent (5%) of the invested cash portfolio of the Loan Parties); and (E) in the case of investments by any Foreign Subsidiary, obligations of a credit quality and maturity comparable to that of the items referred to in clauses (B) through (D) above that are available in local markets;

 

(3)        any Permitted Acquisition; provided that the aggregate amount of Investments by Loan Parties in Restricted Subsidiaries that are not Loan Parties (or do not merge into a Loan Party in connection with such transaction) in reliance on this Clause (3) shall not exceed (when combined with Investments made by Loan Parties in Subsidiaries that are not (or do not become in connection with such transaction) Loan Parties in reliance on Clauses (1), (21) and (22) of the definition of Permitted Investments) $10,000,000 (or, if the aggregate outstanding principal amount of the Term Loan is less than or equal to $150,000,000 immediately prior to the making of such Investment, $20,000,000); provided, further that, upon written notice from a Responsible Officer of the Borrower Representative to the Administrative Agent, the dollar amount set forth in the foregoing proviso shall be reset at $10,000,000 on any such date as the Payment Conditions become satisfied (or, if the aggregate outstanding principal amount of the Term Loan is less than or equal to $150,000,000 immediately prior to the making of such Investment, $20,000,000 as the Payment Conditions become satisfied) (it being understood that such written notice shall include an updated Borrowing Base Certificate (as applicable) and calculations (in reasonable detail) demonstrating compliance with the Payment Conditions); provided, further that, with

 

(4)         any Investment in securities or other assets not constituting cash or Cash Equivalents and received in connection with any disposition of assets permitted by Section 6.04;

 

(5)         any Investment existing on the date hereof or an Investment consisting of any extension, modification or renewal of any Investment existing on the date hereof; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the date hereof to the extent set forth Schedule 6.02(a) or (y) as otherwise permitted under this Agreement;

 

(6)         loans and advances to officers, directors, employees or consultants of the Company or any of its Subsidiaries (i) in the ordinary course of business in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any write-downs or write-offs thereof) not to exceed $5,000,000 at the time of Incurrence, (ii) in respect of payroll payments and expenses in the ordinary course of business and (iii) in connection with such Person’s purchase of Equity Interests of the Company or any direct or indirect parent of the Company solely to the extent that the amount of such loans and advances shall be contributed to the Company in cash as common equity;

 

(7)         any Investment acquired by the Company or any Restricted Subsidiary (a) in exchange for any other Investment or accounts receivable held by the Company or such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by the Company or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default, or as a result of a Bail-In Action with respect to any contractual counterparty of the Company or any Restricted Subsidiary;

 

(8)         any Investment acquired by the Company or any Subsidiary in the settlement of overdue Indebtedness and accounts payable owed to a Loan Party or a Subsidiary in the ordinary course of business and for amounts which, individually and in the aggregate, are not material to the Loan Parties or their Subsidiaries;

 

(9)         [Reserved];

 

(10)      additional Investments by the Company or any Restricted Subsidiary having an aggregate Fair Market Value (as determined in good faith by the Company), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed $20,000,000; provided, however, that if any Investment pursuant to this clause (10) is made in any Person that is not a Loan Party at the date of the making of such Investment and such Person becomes a Loan Party after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (10) for so long as such Person continues to be a Loan Party;

 

(11)        [Reserved];

 

(12)        Investments the payment for which consists of Equity Interests of the Company (other than Disqualified Stock);

 

(13)        any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 6.05 (except transactions described in clauses (a), (b), (c), (e), (f), (g), (i) or (m) of Section 6.05);

 

(14)      guarantees issued in accordance with Section 6.01, including, without limitation, any guarantee or other obligation issued or incurred under this Agreement in connection with any letter of credit issued for the account of the Company or any of its Restricted Subsidiaries (including with respect to the issuance of, or payments in respect of drawings under, such letters of credit);

 

(15)       Investments consisting of purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of in-bound intellectual property, in each case, in the ordinary course of business (it being understood and agreed that for this purpose, “ordinary course of business” shall give effect to the Company’s business needs, as determined in its reasonable business judgment, to respond to the impacts on the business, properties, assets or financial condition of the Loan Parties as a result of the coronavirus disease known as COVID-19);

 

(16)       [Reserved];

 

(17)       [Reserved];

 

(18)       Investments of a Restricted Subsidiary acquired after the date hereof or of an entity merged into, amalgamated with, or consolidated with a Loan Party or a Restricted Subsidiary in a transaction that is not prohibited by Section 6.08 after the date hereof to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;

 

(19)       Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;

 

(20)       advances in the form of a prepayment of expenses in the ordinary course of business, so long as such expenses are being paid in accordance with customary trade terms of the Company or the Restricted Subsidiaries;

 

(21)       Investments in Joint Ventures or Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by the Company), taken together with all other Investments made pursuant to this clause (21) that are at that time outstanding, not to exceed (x) $10,000,000 (or, if the aggregate outstanding principal amount of the Term Loan is less than or equal to $150,000,000 immediately prior to the making of such Investment, $20,000,000 (which amount shall be increased to $30,000,000 solely in connection with Investments in Joint Ventures made under this clause (21) if the Equity Interests of the applicable Joint Venture are pledged to the Administrative Agent to secure the Obligations)), plus (y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided that the aggregate amount of Investments made by Loan Parties in reliance on this Clause (21) shall not exceed (when combined with Investments made by Loan Parties in Subsidiaries that are not (or do not become in

 

(22)       any Investment in any Subsidiary of the Company or any Joint Venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business; provided that the aggregate amount of Investments made by Loan Parties in Subsidiaries or joint ventures that are not Loan Parties in reliance on this Clause (22) shall not exceed (when combined with Investments made by Loan Parties in Subsidiaries that are not (or do not become in connection with such transaction) Loan Parties in reliance on Clauses (1), (3) and (21) of the definition of Permitted Investment) $10,000,000 (or, if the aggregate outstanding principal amount of the Term Loan is less than or equal to $150,000,000 immediately prior to the making of such Investment, $20,000,000); provided, further that, upon written notice from a Responsible Officer of the Borrower Representative to the Administrative Agent, the dollar amount set forth in the foregoing proviso shall be reset at $10,000,000 (or, if the aggregate outstanding principal amount of the Term Loan is less than or equal to $150,000,000 immediately prior to the making of such Investment, $20,000,000) on any such date as the Payment Conditions become satisfied (it being understood that such written notice shall include an updated Borrowing Base Certificate (as applicable) and calculations (in reasonable detail) demonstrating compliance with the Payment Conditions); provided, however, that if any Investment pursuant to this clause (22) is made in any Person that is not a Loan Party at the date of the making of such Investment and such Person becomes a Loan Party after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (22) for so long as such Person continues to be a Loan Party;

 

(23)       trade credit extended on usual and customary terms in the ordinary course of business;

 

(24)       Guarantees of any Loan Party or any Restricted Subsidiary of leases or of other obligations that do not constitute Indebtedness, in each case entered into in the ordinary course of business;

 

(25)       any other Investments in Joint Ventures; provided that, (i) any such Joint Venture is organized in a jurisdiction located within the United States, (ii) the Equity Interests of any such Joint Venture are pledged to the Administrative Agent to secure the Obligations on terms reasonably satisfactory to the Administrative Agent, (iii) either (A) the Loan Parties shall have satisfied clause (i) of the Payment Conditions before and immediately after giving effect to such Investment and the aggregate principal amount of Term Loans outstanding at such time is less than or equal to $150,000,000 or (B) the Loan Parties shall have satisfied clause (i) or (ii) of the Payment Conditions before and immediately after giving effect to such Investment and the aggregate principal amount of Term Loans outstanding at such time is less than or equal to $100,000,000 and (iv) the Fair Market Value of such Investments shall not exceed (A) $50,000,000 in the aggregate in respect of any single Investment or series of related Investments and (B) $100,000,000 in the aggregate in respect of all such Investments during the term of this Agreement;

 

(26)       Investments consisting of the ownership of Equity Interests in Article II JV and BC/VC existing as of the date hereof; and

 

(27)       Investments arising as a result of the Factoring Agreements.

 

“Permitted Liens” means, with respect to any Person:

 

(1)         pledges, bonds or deposits and other Liens granted by such Person under workmen’s compensation laws, unemployment or employment insurance laws, old age pensions or similar legislation or programs, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness (it being understood that Indebtedness permitted pursuant to Section 6.01(q) and other obligations in respect of cash management services shall not constitute Indebtedness for purposes of this clause (1))) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. or Canadian government bonds to secure surety or appeal bonds, performance and return of money bonds, or deposits as security for contested Taxes or import duties or payments of rent, in each case Incurred in the ordinary course of business;

 

(2)        (a) Liens imposed by law and landlords’, carriers’ warehousemen’s, mechanics’, materialmen’s, repairmen’s, construction, or other like Liens, (b) Liens of customs brokers, freight forwarders and common carriers, (c) inchoate Liens imposed pursuant to applicable Canadian federal or provincial pension standards legislation, and (d) statutory and common law Liens of landlords, in each case securing obligations that are not overdue by more than 45 days or that are being contested in good faith by appropriate proceedings;

 

(3)        Liens for Taxes not yet delinquent by more than 45 days, or that are being contested in good faith by appropriate proceedings, in an aggregate amount not to exceed $2,500,000 at any one time outstanding, if adequate reserves with respect thereto have been provided in accordance with GAAP;

 

(4)        deposits or escrows to secure performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit, security deposits in connection with leases, subleases or licenses of real property, bankers’ acceptances or similar obligations (other than Indebtedness for borrowed money (it being understood that Indebtedness permitted pursuant to Section 6.01(q) and other obligations in respect of cash management services shall not constitute Indebtedness for purposes of this clause (4))) issued pursuant to the request of and for the account of any Person in the ordinary course of business;

 

(5)        (a) any state of facts as shown by any professional survey or physical inspection of any Material Real Property delivered to the Administrative Agent (i) prior to the Closing Date with respect to any Existing Owned Real Property and (ii) prior to the date of acquisition of any such Material Real Property acquired after the Closing Date and (b) minor survey exceptions, minor encumbrances, minor encroachments, trackage rights, special and supplemental assessments, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines,  telegraph and telephone lines, communication towers, other utilities and other similar purposes, servicing agreements, development agreements, site plan agreements land use and air rights agreements, reservations, restrictions and leases for mineral and water rights, all title exceptions, exclusions and encumbrances in existence with respect to all owned or leased real property as of the date of this Agreement and at the time of acquisition of any interest in real property acquired after the date of this Agreement and in existence at the time of such acquisition, and other similar liens, charges and encumbrances incurred in the ordinary course of business, or title defects or irregularities that are of a minor nature or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness, and which would  not in the aggregate with respect to any particular real property be reasonably expected to materially adversely affect the value of said properties or materially impair their use, in the operation of the business of such Person as of the date of this Agreement or the date of any future acquisition as the case may be;

 

(6)          (A) Liens on assets of a Subsidiary that is not a Loan Party securing Indebtedness of a Subsidiary that is not a Loan Party permitted to be Incurred pursuant to Section 6.01;

 

(B)          [Reserved];

 

(C)          Liens securing obligations in respect of Indebtedness permitted to be Incurred pursuant to clause (d) or (m) (to the extent such guarantees are issued in respect of any Indebtedness) of Section 6.01; provided that, in the case of clause (m) any Lien on the Collateral in reliance on this clause (6)(C) shall be junior to the Liens on the Collateral securing the Obligations pursuant to the ABL Intercreditor Agreement and/or a junior lien intercreditor agreement or collateral trust agreement reasonably satisfactory to the Administrative Agent reflecting the junior-lien status of the Liens securing such Indebtedness as it relates to Collateral;

 

(D)          [Reserved];

 

(E)          Liens created pursuant to the Collateral Documents or otherwise securing the Obligations;

 

(7)         any Lien existing on the date of this Agreement and described on Schedule 6.07, provided that the principal amount secured thereby is not hereafter increased, and no additional assets become subject to such Lien (except pursuant to the terms of the agreements governing such Lien as in effect on the date of this Agreement);

 

(8)         Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by the Company or any Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);

 

(9)         Liens on assets or property at the time the Company or a Restricted Subsidiary acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens may not extend to any other property owned by the Company or any Restricted Subsidiary (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);

 

(10)       [Reserved];

 

(11)       [Reserved];

 

(12)       [Reserved];

 

(13)       (a) leases, subleases, licenses and sublicenses of real property (excluding any leases, subleases, licenses and sublicenses with respect to any Material Real Property entered into after the Closing Date unless with the prior written consent of the Administrative Agent) which do not materially interfere with the ordinary conduct of the business of the Company or any of the Subsidiaries and (b) all Liens created or purported to be created by any lessee, sub lessee, licensee or sub licensee of any Loan Parties in violation of any applicable lease, sublease, licensee or sub licensee, without the  knowledge of such Loan Parties (and upon learning of such Liens in this clause (b), so long as the applicable Loan Party promptly takes all reasonable action to remove, satisfy, discharge or bond such Liens);

 

(14)       Liens arising from Uniform Commercial Code financing statement filings (or equivalent filings including under the PPSA) regarding operating leases;

 

(15)       Liens in favor of any Loan Party;

 

(16)       [Reserved];

 

(17)       pledges and deposits and other Liens made in the ordinary course of business to secure liability to insurance carriers;

 

(18)       Liens on the Equity Interests of Unrestricted Subsidiaries;

 

(19)       (a) leases or subleases, and licenses or sublicenses (including with respect to Intellectual Property on a non-exclusive basis or on an exclusive basis with the prior written consent of the Administrative Agent) granted to others in the ordinary course of business, but excluding any leases, subleases, licenses and sublicenses with respect to any Material Real Property entered into after the Closing Date unless with the prior written consent of the Administrative Agent, in all such cases, not interfering in any material respect with the business of the Company and the Subsidiaries, taken as a whole and (b) and Liens on real property which is not owned but is leased or subleased by the Company or any Restricted Subsidiary;

 

(20)       Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in clauses 6(C), (7), (8), (9), (11), and (35) of this definition; provided, however, that (x) such new Lien shall be limited to all or part of the same property (including any after acquired property to the extent it would have been subject to the original Lien) that secured the

 

(21)       [Reserved];

 

(22)        judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

 

(23)       Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into in the ordinary course of business (it being understood and agreed that for this purpose, “ordinary course of business” shall give effect to the Company’s business needs, as determined in its reasonable business judgment, to respond to the impacts on the business, properties, assets or financial condition of the Loan Parties as a result of the coronavirus disease known as COVID-19);

 

(24)       [Reserved];

 

(25)        Liens (i) in favor of credit card companies pursuant to agreements therewith and (ii) in favor of customers, in each case, in the ordinary course of business and consistent with past practice and in the case of Intellectual Property, on a non-exclusive basis;

 

(26)       any encumbrance or restriction (including put and call arrangements) with respect to Equity Interests of any Joint Venture or similar arrangement securing obligations of such Joint Venture or pursuant to any joint venture agreement or similar agreement;

 

(27)       any amounts held by a trustee in the funds and accounts under any indenture issued in escrow pursuant to customary escrow arrangements pending the release thereof, or under any indenture pursuant to customary discharge, redemption or defeasance provisions;

 

(28)       Liens (i) arising by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business or (iii) encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

 

(29)       Liens that are contractual rights of set-off relating to pooled deposits, sweep accounts, reserve accounts or similar accounts of the Company or any Restricted Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Company or any Restricted Subsidiary, including with respect to credit card charge-backs and similar obligations;

 

(30)       Liens disclosed by the title reports, commitments or title insurance policies (and future date downs) delivered pursuant to (a) this Agreement, and, in each case, any replacement, modification, date down, extension or renewal of any such Lien (and all existing surveys); provided that such replacement, modification, date down, extension or renewal Lien shall not cover any property other than the property that was subject to such Lien prior to such replacement, modification, date down, extension or renewal; provided, further, that the Indebtedness and other obligations secured by such replacement, modification, date down, extension or renewal Lien are permitted under this Agreement or (b) the acquisition of any interest of any Loan Party in real property acquired after the date of this Agreement and in existence at the time of such acquisition (and not created or suffered in anticipation of such acquisition), so long as any Liens in this clause (b) would not interfere in any material respect with the business of the applicable Loan Party as intended to be conducted on such after-acquired real property;

 

(31)       Liens that are contractual rights of set-off relating to purchase orders and other agreements entered into with customers, suppliers or service providers of the Company or any Subsidiary in the ordinary course of business;

 

(32)       in the case of real property that constitutes a leasehold or subleasehold interest, (x) any Lien to which the fee simple interest (or any superior leasehold interest) is or may become subject and any subordination of such leasehold or subleasehold interest to any such Lien in accordance with the terms and provisions of the applicable leasehold or subleasehold documents, and (y) any right of first refusal, right of first negotiation or right of first offer which is granted to the lessor or sublessor;

 

(33)        Reserved;

 

(34)       Liens securing insurance premium financing arrangements; provided that such Liens are limited to the applicable unearned insurance premiums;

 

(35)       Liens on the Collateral securing the ABL Credit Facility and the related Guarantees so long as such Liens are subject to the ABL Intercreditor Agreement;

 

(36)       Liens on securities that are the subject of repurchase agreements constituting Cash Equivalents under clause (e) of the definition thereof;

 

(37)       [Reserved];

 

(38)       with respect to the Factoring Agreements, Liens on accounts receivable and other related property as set forth in the Factoring Agreements;

 

(39)       Liens in favor of landlords on leasehold improvements financed by allowances or advances provided by such landlords pursuant to lease arrangements;

 

(40)       [Reserved];

 

(41)       Liens with respect to any leasehold interest created in connection with any Sale/Leaseback Transaction permitted by Section 6.04; and

 

(42)       Liens securing other obligations of the Loan Parties and their Subsidiaries in an aggregate amount not to exceed $25,000,000 at any one time outstanding;

 

provided, however, notwithstanding the foregoing and Section 6.07, the Loan Parties and their Restricted Subsidiaries shall not, directly or indirectly, create, Incur or suffer to exist any Lien on any of the Material Real Property other than (a) with respect to Material Real Property acquired after the Closing Date, pursuant to the foregoing clauses (2), (3), (4), (5), 6(E), (7), (8), (9), (13), (22), (30) and (35) in this definition of “Permitted Liens” and (b) with respect to the Existing Owned Real Property, pursuant to the foregoing clauses (2), (3), (5), 6(E), (7), (22), (30) and (35) in this definition of “Permitted Liens”.

 

“Permitted Specified Liens” means Permitted Liens described in clauses (2), (3), 6(E) of the definition of Permitted Liens, and, solely in the case of Section 5.14(a), including clauses (5), (13) and (39) of the definition of Permitted Liens.

 

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

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Plan Asset Regulations” shall mean 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

 

“PPSA” means the Personal Property Security Act (Ontario) or such other applicable legislation in effect from time to time in such other jurisdiction in Canada (including the Civil Code (Quebec)) for purposes of the provisions hereof relating to perfection, effect of perfection or non-perfection or priority.

 

“Preferred Stock” means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

 

“Prepayment Premium” has the meaning specified in the Fee Letter.

 

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money Rates Section as the Prime Rate (currently defined as the base rate on corporate loans posted by at least 75% of the nation’s thirty (30) largest banks), as in effect from time to time.  The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.  Any Agent or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

 

“Pro Forma Compliance” means, with respect to any determination for any period and any transaction, that such determination shall be made by giving pro forma effect to each such transaction, as if each such transaction had been consummated on the first day of such period, based on, in the case of determinations made in reliance on pro-forma financial statement calculations only, historical results accounted for in accordance with GAAP and, to the extent applicable, reasonable assumptions that are specified in detail in the relevant compliance certificate, financial statement or other document provided to the Administrative Agent or any Lender in connection herewith (which shall be prepared by the Company in good faith (subject to the approval of the Administrative Agent, not to be unreasonably withheld)) and for such purposes historical financial statements shall be recalculated as if such transaction had been consummated at the beginning of the applicable period, and any Indebtedness or other liabilities

to be incurred, assumed or repaid had been incurred, assumed or repaid at the beginning of such period (and assuming that such Indebtedness to be incurred bears interest during any portion of the applicable measurement period prior to the relevant acquisition at the weighted average of the interest rates applicable to such Indebtedness incurred during such period) and, to the extent pro forma financial statements are required to be prepared by the Company under Regulation S-X of the Securities Act of 1933 (“Reg. S-X”) reflecting such transaction for any period, all pro forma calculations made hereunder with respect to such transaction and for such period shall be in conformity with Reg. S-X at all times after such pro-forma financial statements reflecting such transactions are required to be filed by the Company under Reg. S-X.

 

“Proceeds of Crime Act” means the Proceeds of Crime (Money Laundering) and Terrorist Finance Act (Canada), as amended.

 

“Projections” has the meaning assigned to such term in Section 3.06(b)(i).

 

“Protective Advance” has the meaning assigned to such term in Section 2.04.

 

“Qualified Cash” means, as of any date of determination, the aggregate amount of unrestricted cash and Cash Equivalents of the Loan Parties that (i) is in deposit accounts or in securities accounts, or any combination thereof, which such deposit account or securities account is subject to a control agreement in form and substance reasonably satisfactory to Administrative Agent, and is maintained by a branch office of the bank or securities intermediary located within the United States and Canada or (ii) is in an Excluded Account under clause (b) or (e) of the definition of “Excluded Accounts” in the U.S. Security Agreement or the Canadian Security Agreement, as applicable.

 

“Real Estate” means all leases and all land, together with the buildings, structures, parking areas, and other improvements thereon, now or hereafter owned by any Loan Party or any Restricted Subsidiary, as the context may require, including all easements, rights-of-way, and similar rights relating thereto and all leases, tenancies, and occupancies thereof.

 

“Real Property Deliverables” means each of the following agreements, instruments and other documents in respect of each Material Real Property, each in form and substance reasonably satisfactory to the Administrative Agent:

 

(a)          a Mortgage duly executed by the applicable Loan Party;

 

(b)          evidence of the recording of each Mortgage in such office or offices as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect the Lien purported to be created thereby or to otherwise protect the rights of the Administrative Agent and the Lenders thereunder;

 

(c)          a Title Insurance Policy or bring-down of the existing Title Insurance Policy with respect to each Mortgage, dated as of the Closing Date;

 

(d)          an existing ALTA survey together with a survey affidavit of no change to induce removal of the survey exception to the Title Insurance Policy and issue a survey endorsement to the Title Insurance Policy (if such endorsement is available at commercially reasonable rates and customarily issued in similar circumstances in the applicable jurisdiction, unless such endorsement is waived by Administrative Agent in its reasonable discretion);

 

(e)          a zoning report issued by a provider reasonably satisfactory to the Administrative Agent or a copy of each letter issued by the applicable Governmental Authority, evidencing each Material Real

 

(f)          an opinion of counsel, satisfactory to the Administrative Agent, in the state where such Material Real Property is located with respect to the enforceability of the Mortgage to be recorded and such other matters as the Administrative Agent may reasonably request;

 

(g)         an ASTM 1527-13 Phase I Environmental Site Assessment (“Phase I ESA”) (and if reasonably requested by the Administrative Agent based upon the results of such Phase I, a Phase II Environmental Site Assessment with respect to all Material Real Property acquired after the date of this Agreement ), by an independent firm reasonably satisfactory to the Administrative Agent; and

 

(h)          such other agreements, instruments, appraisals and other documents (including opinions of counsel, flood zone certificates and proof of flood insurance, if required) as the Administrative Agent may reasonably require.

 

“Recipient” means, as applicable, (a) the Administrative Agent and (b) any Lender, or any combination thereof (as the context requires).

 

“Register” has the meaning assigned to such term in Section 9.04.

 

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person’s Affiliates.

 

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping of any Hazardous Material into the environment.

 

“Relevant Entity” means (a) each Loan Party and each Subsidiary of any Loan Party, and (b) each Person that, directly or indirectly, is in control of a Person described in clause (a) above.  For purposes of this definition, control of a Person means the direct or indirect (x) ownership of, or power to vote, twenty-five percent (25%) or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of such Person whether by ownership of equity interests, contract or otherwise.

 

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

 

“Relevant Plan” has the meaning set forth in Section 9.04(e).

 

“Report” means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the assets of the Loan Parties from information furnished by or on behalf of the Borrowers, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

 

“Reportable Compliance Event” means that any Relevant Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint or similar charging instrument, arraigned, or custodially

detained in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the effect that it is reasonably likely that any aspect of its operations is in actual or probable violation of any Anti-Terrorism Law.

 

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders) having Term Exposures and unused Commitments representing more than 50% of the sum of the Aggregate Term Exposure and unused Commitments at such time.

 

“Requirement of Law” means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer” means, with respect to any Loan Party, the Chief Executive Officer, President, Chief Financial Officer, Treasurer or Assistant Treasurer of such Loan Party, any other executive officer, including any Executive Vice President or Senior Vice President of such Loan Party, any Vice President of any Restricted Subsidiary of such Loan Party, any manager or the members (as applicable) in the case of any Loan Party which is a limited liability company, and such other individuals, designated by written notice to the Administrative Agent from the Borrower Representative, authorized to execute notices, reports and other documents on behalf of such Loan Party required hereunder.  The Borrower Representative may amend such list of individuals from time to time by giving written notice of such amendment to the Administrative Agent.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party in their capacity as an officer of such Loan Party and not in any individual capacity.

 

“Refinancing Indebtedness” has the meaning specified in Section 6.01(n).

 

“Restricted Investment” means any Investment that is not a Permitted Investment.

 

“Restricted Payments” has the meaning specified in Section 6.02(a).

 

“Restricted Subsidiary” means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless the context otherwise requires, the term “Restricted Subsidiary” shall mean a Restricted Subsidiary of Company. Each Loan Party (other than the Company) shall constitute a Restricted Subsidiary.

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

 

“Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired by a Loan Party or a Restricted Subsidiary whereby such Loan Party or Restricted Subsidiary transfers such property to a Person and such Loan Party or Restricted Subsidiary leases it from such Person, other than leases between any Loan Party and a Restricted Subsidiary or between Restricted Subsidiaries.

 

“Sanctioned Country” means, at any time, a country, region or territory which is the subject or target of any Sanctions.

 

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, Her Majesty’s Treasury of the United Kingdom, the European Union or any EU member state, (b) a Canadian Blocked Person, or (c) any Person otherwise the subject of any Sanctions.

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time (a) by the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) by the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom, or (c) by a government of Canada pursuant to Canadian Economic Sanctions and Export Control Laws.

 

“Screen Rate” means in respect of the LIBO Rate for any Interest Period, the rate of interest published each Business Day on the applicable Bloomberg Page (or on such other substitute Bloomberg page that displays rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Administrative Agent as an authorized information vendor for the purpose of displaying rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market, in all cases, with a maturity comparable to such Interest Period; provided that if the Screen Rate, determined as provided above, would be less than zero, the Screen Rate shall for all purposes of this Agreement be zero.

 

“SEC” means the Securities and Exchange Commission of the U.S.

 

“Secured Obligations” means all U.S. Secured Obligations and Canadian Secured Obligations.

 

“Secured Parties” means (a) the Administrative Agent, (b) the Lenders and (c) the successors and assigns of each of the foregoing.

 

“Security Agreement” means and refers to each of the U.S. Security Agreement and the Canadian Security Agreement.

 

“Seller” means any Person that sells Equity Interests or other property or assets to a Loan Party or a Subsidiary of a Loan Party in a Permitted Acquisition.

 

“Similar Business” has the meaning specified in Section 6.06.

 

“Solvent” means, with respect to any Person on any date of determination, taking into account any right of reimbursement, contribution or similar right available to such Person from other Persons, that on such date (i) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (ii) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged, and (vi) such Person is not an “insolvent person” as such term is defined in the BIA.  In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the

facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Spot Rate” means, on any date, as determined by the Administrative Agent, the spot selling rate posted by Bloomberg on its website for the sale of the applicable currency for U.S. Dollars at approximately 11:00 a.m., New York City time, on such date (the “Applicable Quotation Date”); provided, that if, for any reason, no such spot rate is being quoted, the spot selling rate shall be determined by reference to such publicly available service for displaying exchange rates as may be reasonably selected by the Administrative Agent, or, in the event no such service is selected, such spot selling rate shall instead be the rate reasonably determined by the Administrative Agent as the spot rate of exchange quoted to it by major banks in respect of the applicable currency, at or about 11:00 a.m., New York City time, on the Applicable Quotation Date for the purchase of the relevant currency for delivery two Business Days later.

 

“SSP” means Sixth Street Specialty Lending, Inc., a Delaware corporation.

 

“Statements” has the meaning given to such term in Section 3.06(a).

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D of the Board. LIBOR Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D of the Board or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person the payment of which is subordinated to payment of the Secured Obligations to the written satisfaction of the Administrative Agent.

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

 

“Subsidiary” means any direct or indirect subsidiary of the Company or a Loan Party, as applicable.  Notwithstanding the foregoing or anything herein to the contrary none of IPCo JV or BRX or any of their respective Subsidiaries shall constitute a Subsidiary of the Company or any Subsidiary of the Company for purposes of this Agreement, but shall each be considered a Joint Venture for purposes hereof.

 

“Subsidiary Equity Interests” has the meaning specified in Section 3.02.

 

“Swap Agreement” means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one

or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrowers or the Subsidiaries shall be a Swap Agreement.

 

“Swap Agreement Obligations” means “Swap Agreement Obligations” as defined in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings, (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Term Exposure” means, with respect to any Lender at any time, the sum of (a) the outstanding principal amount of such Lender’s Term Loans at such time plus (b) an amount equal to its Applicable Percentage of the aggregate principal amount of Protective Advances outstanding at such time.

 

“Term Loan” means a Loan made pursuant to Section 2.01(a).

 

“Term Priority Collateral” has the meaning specified in the ABL Intercreditor Agreement.

 

“Test Period” means, as of any date of determination, the most recently completed four (4) fiscal quarters of the Loan Parties ended on or prior to such time (taken as one accounting period) for which financial statements have been delivered (or are required to have been delivered) to the Administrative Agent.

 

“Title Insurance Policy” means a mortgagee’s loan policy, in form and substance satisfactory to the Administrative Agent, together with all endorsements made from time to time thereto, issued to the Administrative Agent by or on behalf of a title insurance company selected by or otherwise reasonably satisfactory to the Administrative Agent, insuring the Lien created by a Mortgage in an amount (not to exceed 105% of the Fair Market Value of the Mortgaged Property) and on terms and with such endorsements satisfactory to the Administrative Agent, delivered to the Administrative Agent.

 

“Total Assets” means, at any date of determination, the consolidated total assets of the Company and its Restricted Subsidiaries as of the last day of the most recent fiscal quarter of the Company for which financial statements have been delivered pursuant to Section 5.01(a) or (b) as adjusted to give effect to any acquisition or Disposition of a Person or assets that may have occurred on or after the last day of such fiscal quarter.

 

“Trade Date” has the meaning set forth in Section 9.04(e).

 

“Transactions” means the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions and the use of the proceeds thereof.

 

“Type” refers, when used in reference to any Loan or Borrowing, to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

 

“Unfinanced Capital Expenditures” means for any period, Capital Expenditures of the Company and its Restricted Subsidiaries made in cash during such period, except to the extent financed with the proceeds of Finance Lease Obligations or other Indebtedness (other than Loans incurred hereunder), common Equity Interests or Disqualified Stock, or casualty proceeds, condemnation proceeds, or other proceeds that would not be included in Consolidated EBITDA, less cash received from the sale of any fixed assets of the Company and its Restricted Subsidiaries (including, without limitation, equipment) during such period; provided that the aggregate amount of Unfinanced Capital Expenditures during such period may not be less than zero.

 

“Unfunded Pension Liability” means, in respect of a Canadian Defined Benefit Plan, any solvency deficiency or wind-up deficiency (as determined for the purposes of the Pension Benefits Act (Ontario) or other equivalent provincial legislation), as identified in the most recent actuarial valuation report that has been filed with the applicable pension regulator in respect of such Canadian Defined Benefit Plan.

 

“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) any obligation (including any guarantee) that is contingent in nature at such time; or (ii) an obligation to provide collateral to secure any of the foregoing types of obligations.

 

“Unrestricted Subsidiary” means:

 

(1)          any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below; and

 

(2)          any Subsidiary of an Unrestricted Subsidiary.

 

The Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary by written notice to the Administrative Agent unless at the time of such designation such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Restricted Subsidiary that is not a Subsidiary of the Subsidiary to be so designated, in each case at the time of such designation; provided, however, that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any of the Restricted Subsidiaries unless otherwise permitted under Section 6.02; provided, further, however, that either:

 

(a)          the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

 

(b)          if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 6.02.

 

The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary by written notice to the Administrative Agent; provided, however, that immediately after giving effect to such designation, the Company shall be in Pro Forma Compliance with the Payment Conditions.

 

In no event may any Subsidiary that is a “Restricted Subsidiary” under (and as defined in) the ABL Credit Agreement be designated an Unrestricted Subsidiary (unless such Subsidiary is designated an “Unrestricted Subsidiary” under the ABL Credit Agreement prior or substantially concurrently with such designation).  As of the date hereof, no entity is an Unrestricted Subsidiary.

 

“U.S.” means the United States of America.

 

“U.S. Borrower” means the Company.

 

“U.S. Borrowing Base” and all constituent definitions contained in such term as set forth in the ABL Credit Agreement shall have the meaning set forth in the ABL Credit Agreement as in effect on the date hereof or as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the ABL Intercreditor Agreement.

 

“U.S. Collateral” means any and all property owned, leased or operated by a U.S. Loan Party covered by the Collateral Documents and any and all other property of any U.S. Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent to secure the Secured Obligations.

 

“U.S. Commitment” has the meaning specified therefor in Section 2.01(b)(i).

 

“U.S. Dollar” or “$”means the lawful money of the United States of America.

 

“U.S. Guaranteed Obligations” has the meaning set forth in Section 10.01.

 

“U.S. Guarantor” means each Domestic Subsidiary of a Borrower that is listed on the signature pages hereto as a Guarantor or that becomes a party hereto as a Guarantor pursuant to Section 5.14, in each case, until such Subsidiary’s U.S. Guaranty is released in accordance herewith.

 

“U.S. Guaranty” means Article X of this Agreement.

 

“U.S. Loan Parties” means the Company and each Domestic Subsidiary of the Company that is listed on the signature pages hereto as a Guarantor or that becomes a party hereto as a Guarantor pursuant to Section 5.14, in each case, until such Subsidiary’s Guaranty is released in accordance herewith.

 

“U.S. Obligated Party” has the meaning set forth in Section 10.02.

 

“U.S. Obligations” means, with respect to the U.S. Loan Parties, all unpaid principal of and accrued and unpaid interest on the Loans to the U.S. Borrower, all accrued and unpaid fees (including the Yield Maintenance Premium and any Prepayment Premium) and all expenses, reimbursements, indemnities and other obligations of the U.S. Loan Parties to the Lenders or to any Lender, the Administrative Agent or any indemnified party arising under the Loan Documents (including guarantee obligations and interest, costs, fees and other amounts accruing during the pendency of any proceeding under any Insolvency Laws, regardless of whether allowed or allowable in such proceeding) but, in each case, excluding any obligations of the U.S. Parties in respect of the Canadian Obligations.

 

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

 

“U.S. Secured Obligations” means the U.S. Obligations.

 

“U.S. Security Agreement” means that certain Security Agreement, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders, to be entered into as of the Closing Date, among the U.S. Loan Parties and the Administrative Agent, and, as the context requires, any other pledge or security agreement entered into, after the Closing Date by any other U.S. Loan Party (as required by this Agreement or any other Loan Document), or any other Person, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 2.17(f)(ii)(B)(3).

 

“U.S. Term Loan” means a Term Loan made to the U.S. Borrower.

 

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

 

“Wholly Owned Subsidiary” of any Person means a Restricted Subsidiary of such Person 100% of the outstanding Equity Interests or other ownership interests of which (other than directors’ qualifying shares or shares required pursuant to applicable Requirements of Law) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

“Yield Maintenance Premium” has the meaning specified in the Fee Letter.

 

SECTION 1.02  Classification of Loans and Borrowings. For purposes of this Agreement, Loans and Borrowings may be classified and referred to by Type (e.g., a “LIBOR Loan” or a “LIBOR Borrowing”).

 

SECTION 1.03  Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be

construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein or in the other Loan Documents), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in any definition to the phrase “at any time” or “for any period” shall refer to the same time or period for all calculations or determinations within such definition, and (g) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

For purposes of any Collateral located in the Province of Quebec or charged by any deed of hypothec (or any other Loan Document) and for all other purposes pursuant to which the interpretation or construction of a Loan Document may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Québec, (a) “priority” shall be deemed to include “rank” or “prior claim”, as applicable, (b) “beneficial ownership” shall be deemed to include “ownership”, (c) “leasehold interest” shall be deemed to include “valid rights resulting from a lease”, (d) “lease” shall be deemed to include a “lease” or a “contract of leasing (crédit-bail)”, as applicable, (e) “personal property” shall be deemed to include “movable property”, (f) “real property” shall be deemed to include “immovable property”, (g) “tangible property” shall be deemed to include “corporeal property”, (h) “intangible property” shall be deemed to include “incorporeal property”, (i) “security interest”, “lien” and “mortgage” shall be deemed to include a “hypothec”, “prior claim”, “reservation of ownership” and a “resolutory clause”, as applicable, (j) all references to filing, registering or recording under the UCC or the PPSA shall be deemed to include publication by registration under the Civil Code of Québec, (k) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to the “opposability” of such Liens to third parties, (l) any “right of offset”, “right of setoff” or similar expression shall be deemed to include a “right of compensation”, (m) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (n) an “agent” shall be deemed to include a “mandatary”, and (o) “deposit account” shall be deemed to include a “financial account” (within the meaning of Article 2713.6 of the Civil Code of Québec).

 

SECTION 1.04  Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after the date hereof there occurs (a) any change in GAAP or in the application thereof on the operation of any provision hereof or (b) any change in the historical accounting practices, systems or reserves relating to the components of the Borrowing Base that is adverse to the Lenders in any material respect, and the Borrower Representative notifies the Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate the effect of such change (or if the Administrative Agent notifies the Borrower Representative that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change, then the provisions herein shall be interpreted on the basis of GAAP as in effect and applied, or based on the historical accounting practices, systems or reserves in effect, in each case, immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith, and the Borrower Representative, the

Administrative Agent and the Lenders agree to negotiate in good faith with respect to any proposed amendment to eliminate or adjust for the effect of any such change. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect or any successor thereto) to value any Indebtedness or other liabilities of the Company or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Board Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

 

SECTION 1.05  [Reserved].

 

SECTION 1.06  Status of Obligations. In the event that any Borrower or any other Loan Party shall at any time issue or have outstanding any Subordinated Indebtedness, such Borrower shall take or cause such other Loan Party to take all such actions as shall be necessary to cause the Secured Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness, in each case, to the extent set forth in the applicable subordination agreement. Without limiting the foregoing, the Secured Obligations are hereby designated as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness, in each case, to the extent set forth in the applicable subordination agreement.

 

SECTION 1.07  Exchange Rates.  Without limiting the other terms of this Agreement, the calculations and determinations under this Agreement of any amount in any currency other than U.S. Dollars shall be deemed to refer to the Dollar Amount thereof, as the case may be, and all Borrowing Base Certificates delivered under this Agreement shall express such calculations or determinations in U.S. Dollars or the Dollar Amount thereof, as the case may be. Each requisite currency translation shall be based on the Spot Rate.

 

SECTION 1.08  Divisions.  For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws):  (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.

 

ARTICLE II.

 

 

SECTION 2.01  Commitments.

 

(a)         Subject to the terms and conditions set forth herein, each Lender severally agrees to make, on the Closing Date, the U.S. Term Loan to the U.S. Borrower in an aggregate principal amount not to exceed the amount of such Lender’s U.S. Commitment and the Canadian Term Loan to the Canadian Borrower in an aggregate principal amount not to exceed the amount of such Lender’s Canadian Commitment.

 

(b)          Notwithstanding the foregoing:

 

(i)          the aggregate principal amount of the U.S. Term Loan made on the Closing Date shall not exceed $225,000,000 (the “U.S. Commitment”) and the aggregate principal amount of the Canadian Term Loan made on the Closing Date shall not exceed $25,000,000 (the “Canadian Commitment”); and

 

(ii)       each U.S. Term Loan that is made shall automatically and permanently reduce the Aggregate Commitment and the U.S. Commitment of each Lender, and each Canadian Term Loan that is made shall automatically and permanently reduce the Aggregate Commitment and the Canadian Commitment of each Lender.  Any principal amount of any Term Loan which is repaid or prepaid may not be reborrowed.

 

SECTION 2.02  Loans and Borrowings.  (a) Each Loan shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. Any Protective Advance shall be made in accordance with the procedures set forth in Section 2.04.

 

(b)          All Borrowings shall be denominated in U.S. Dollars. Subject to Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or LIBOR Loans as the Borrower Representative may request in accordance herewith, provided that, subject to a funding indemnity letter in form and substance reasonably satisfactory to the Administrative Agent, all Borrowings made on the Closing Date will be made as LIBOR Borrowings. Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided, however, (i) the exercise of such option shall be recorded in the Register in accordance with Section 9.04(b)(iv) and such Affiliate shall have provided the tax forms required by 2.17(f) to the Administrative Agent, and (ii) any that any exercise of such option shall not affect the obligation of the Borrowers to repay such Loan in accordance with the terms of this Agreement.

 

(c)          [Reserved].

 

(d)          Notwithstanding any other provision of this Agreement, the Borrower Representative shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

 

SECTION 2.03  Requests for Borrowings. To request a Borrowing, the Borrower Representative shall notify the Administrative Agent of such request in writing (through a form of electronic submission acceptable to the Administrative Agent) in a form approved by the Administrative Agent and signed by the Borrower Representative not later than 1:00 p.m., New York time, three (3) Business Days before the date of the proposed Borrowing (or such shorter period as agreed to by the Administrative Agent in its sole discretion). Each such Borrowing Request shall be irrevocable and signed by the Borrower

Representative. Each such written Borrowing Request shall specify the following information in compliance with Section 2.02:

 

(i)          the name of the applicable Borrower(s) and whether such Borrowing is a U.S. Borrowing or Canadian Borrowing;

 

(ii)         the aggregate amount of the requested Borrowing and a breakdown of the separate wires comprising such Borrowing;

 

(iii)        the date of such Borrowing, which shall be a Business Day;

 

(iv)        the Type of such Borrowing; and

 

(v)          in the case of a LIBOR Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period.”

 

Any Borrowing Request that shall fail to specify any of the information required by the preceding provisions of this paragraph may be rejected by the Administrative Agent if such failure is not corrected promptly after the Administrative Agent shall give written or telephonic notice thereof to the Borrower Representative and, if so rejected, will be of no force or effect. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

SECTION 2.04  Protective Advances.

 

(a)         Subject to the limitations set forth below, after the Closing Date, the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in the Administrative Agent’s sole discretion (but shall have absolutely no obligation to), to make Loans to the U.S. Borrower and/or the Canadian Borrower, as applicable, on behalf of all Lenders, which the Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect the applicable Collateral, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the applicable Loans and other applicable Obligations, or (iii) to pay any other amount chargeable to or required to be paid by the applicable Borrower pursuant to the terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and expenses as described in Section 9.03) and other sums payable under the Loan Documents (any of such Loans are herein referred to as “Protective Advances”); provided that, without the consent of the Required Lenders, the aggregate principal amount of outstanding Protective Advances shall not, at any time, exceed $25,000,000.  Subject to Section 9.20, the Protective Advances shall be secured by the Liens in favor of the Administrative Agent in and to the applicable Collateral and shall constitute U.S. Obligations or Canadian Obligations, as applicable, hereunder.  All Protective Advances shall be in U.S. Dollars and ABR Borrowings.  The Administrative Agent’s authorization to make Protective Advances may be revoked at any time by the Required Lenders.  Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof.  At any time Administrative Agent may require the Lenders to fund their risk participations described in Section 2.04(b).

 

(b)        Upon the making of a Protective Advance by the Administrative Agent (whether before or after the occurrence of a Default), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent, without recourse or warranty, an undivided interest and participation in such Protective Advance in proportion to its Applicable Percentage. From and after the date, if any, on which any Lender is required to fund its participation in any Protective Advance purchased hereunder, the Administrative Agent shall promptly

 

SECTION 2.05  [Reserved].

 

SECTION 2.06  [Reserved].

 

SECTION 2.07  Funding of Borrowings.

 

(a)         Each Lender shall make each Loan to be made by such Lender hereunder on the proposed date thereof by wire transfer of immediately available funds by 3:00 p.m., New York time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Applicable Percentage. Subject to Section 4.01, and upon receipt of all requested funds, the Administrative Agent shall make such Term Loans available to the applicable Borrower on the Closing Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Term Loans received by Administrative Agent from Lenders to be wire transferred to such account as may be designated in the Borrowing Request.

 

(b)          Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume  that  such  Lender  has  made  such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the applicable Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the applicable Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the rate reasonably determined by the Administrative Agent to be the cost to it of funding such amount or (ii) in the case of the Borrowers, the interest rate applicable to ABR Loans.  If such Lender does not pay such amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent may make a demand therefor upon the applicable Borrower, and the applicable Borrower shall pay such interest at the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.  Any payment by the applicable Borrower shall be without prejudice to any claim such Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

SECTION 2.08  Interest Elections.

 

(a)          Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower Representative may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a LIBOR Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower Representative may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Protective Advances, which may not be converted or continued.

 

(b)         To make an election pursuant to this Section, the Borrower Representative shall notify the Administrative Agent of such election by the time that a Borrowing Request would be required under Section 2.03 if the applicable Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower Representative.

 

(c)          Each written Interest Election Request shall specify the following information in compliance with Section 2.02:

 

(i)          the name of the applicable Borrower and the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

 

(ii)         the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

 

(iii)        the Type of Borrowing; and

 

(iv)        if the resulting Borrowing is a LIBOR Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a LIBOR Borrowing, but does not specify an Interest Period, then the applicable Borrower shall be deemed to have selected an Interest Period of one month’s duration.

 

(d)          Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

 

(e)          If the Borrower Representative fails to deliver a timely Interest Election Request with respect to a LIBOR Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period, such Borrowing shall be converted to an ABR Borrowing.

 

(f)          Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower Representative (provided that no such notice shall be required in the case of an Event of Default under clause (e) of Article VII), then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a LIBOR Borrowing, and (ii) unless repaid, each LIBOR Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

 

SECTION 2.09  Termination of Commitments.

 

(a)          Unless previously terminated, the Commitments shall terminate at 5:00 p.m., New York time, on the Closing Date.

 

(b)          The Borrowers may, upon at least 10 Business Days prior written notice to the Administrative Agent, terminate this Agreement by paying to the Administrative Agent, in cash, the Obligations, in full, plus the Yield Maintenance Premium and Prepayment Premium, if any, payable in connection with such termination of this Agreement.  If the Borrower Representative has sent a notice of termination pursuant to this Section 2.09(b), then the Borrowers shall be obligated to repay the Obligations, in full, plus the Yield Maintenance Premium and Prepayment Premium, if any, payable in connection with such termination of this Agreement on the date set forth as the date of termination of this Agreement in such notice; provided that such notice may provide that it is conditioned upon the consummation of other financing or the consummation of a sale of Equity Interests, in which case, such notice may be revoked or extended by the applicable Borrower if any such condition is not satisfied prior to the date of termination of this Agreement in such notice.

 

SECTION 2.10  Repayment and Amortization of Loans; Evidence of Debt.

 

(a)          Each Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Term Loan of such Borrower on the Maturity Date, and (ii) to the Administrative Agent the then unpaid amount of each Protective Advance on the earlier of the Maturity Date and demand by the Administrative Agent.

 

(b)         The U.S. Borrower shall repay the principal amount of the U.S. Term Loan in consecutive quarterly installments, each in an amount equal to $2,812,500, on the last Business Day of each fiscal quarter, commencing on October 31, 2020; provided, however, that the last such installment shall be in the amount necessary to repay in full the unpaid principal amount of the U.S. Term Loan.  The outstanding unpaid principal amount of the U.S. Term Loan, and all accrued and unpaid interest thereon, shall be due and payable on the earliest of (i) the Maturity Date and (ii) the date on which the U.S. Term Loan is declared due and payable pursuant to the terms of this Agreement.

 

(c)         The Canadian Borrower shall repay the principal amount of the Canadian Term Loan in consecutive quarterly installments, each in an amount equal to $312,500, on the last Business Day of each fiscal quarter, commencing on October 31, 2020; provided, however, that the last such installment shall be in the amount necessary to repay in full the unpaid principal amount of the Canadian Term Loan.  The outstanding unpaid principal amount of the Canadian Term Loan, and all accrued and unpaid interest thereon, shall be due and payable on the earliest of (i) the Maturity Date and (ii) the date on which the Canadian Term Loan is declared due and payable pursuant to the terms of this Agreement.

 

(d)          Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

 

(e)          The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from each applicable Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

(f)          The entries made in the accounts maintained pursuant to paragraph (d) or (e) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of each applicable Borrower to repay the Loans in accordance with the terms of this Agreement.  In the event of any conflict between the accounts

 

(g)        Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the applicable Borrower shall execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) in the form of Exhibit B-1 or Exhibit B-2, as applicable.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or to such payee and its registered assigns).

 

SECTION 2.11  Prepayment of Loans.

 

(a)          Voluntary Prepayments.  Each Borrower shall have the right, at any time and from time to time, upon at least 3 Business Days’ prior written notice to the Administrative Agent, to prepay any Borrowing of such Borrower in whole or in part, provided that such notice may provide that it is conditioned upon the consummation of other financing or the consummation of a sale of Equity Interests, in which case, such notice may be revoked or extended by the applicable Borrower if any such condition is not satisfied prior to the date of termination of this Agreement in such notice.  Each prepayment made pursuant to this Section 2.11(a) shall be accompanied by the payment of (i) accrued interest to the date of such payment on the amount prepaid, (ii) the Yield Maintenance Premium and Prepayment Premium, if any, payable in connection with such prepayment of the Term Loan and (iii) any break funding expenses under Section 2.16.  Each such prepayment shall be applied against the remaining installments of principal due on the applicable Term Loan as directed by the applicable Borrower and as specified in the notice of prepayment.

 

(b)          Mandatory Prepayments.

 

(i)          Dispositions.  No later than the third (3rd) Business Day following the date of receipt by Company or any of its Restricted Subsidiaries of any Net Proceeds from Dispositions of Term Priority Collateral in excess of $250,000 in the aggregate in any fiscal year, the Borrowers shall prepay the Term Loan as set forth in Section 2.11(c) in an aggregate amount equal to such Net Proceeds.  Nothing contained in this Section 2.11(b)(i) shall permit the Loan Parties or any of their Restricted Subsidiaries to sell or otherwise dispose of any assets other than in accordance with Section 6.04; provided that, (i) so long as no Event of Default exists, (ii) Company has delivered to the Administrative Agent written notice promptly following receipt of such Net Proceeds setting forth the Company’s intention to apply such Net Proceeds to acquire, maintain, develop, construct, improve, upgrade or repair assets useful in the business of the Company and its Subsidiaries or to make investments in Permitted Acquisitions and the Administrative Agent consents to such application of the applicable Net Proceeds, (iii) until such application or reinvestment the monies are held in a deposit account in which the Administrative Agent has a perfected first-priority security interest, and (iv) Company or its  Restricted Subsidiaries, as applicable, complete such investment, replacement, purchase, reinvestment, improvement, upgrade or repair within 180 days after the initial receipt of such monies, Company and its Restricted Subsidiaries shall have the option to apply such monies to the costs of such investment, replacement, purchase, improvement, upgrade or repair in asset useful in the business of the Company or its Restricted Subsidiaries unless and to the extent that such 180 day period then, in either case, any amounts held for such application by the Company or its Restricted Subsidiaries shall be applied to the Term Loans in accordance with Section 2.11(c).

 

(ii)         Insurance/Condemnation Proceeds.  No later than the third (3rd) Business Day following the date of receipt by Company or any of its Restricted Subsidiaries, or Administrative Agent as loss payee, of any Net Proceeds from insurance or any condemnation, taking or other Casualty, in each

 

(iii)        [Reserved].

 

(iv)        Issuance of Debt.  No later than the first (1st) Business Day following the date of receipt by Company or any of its Restricted Subsidiaries of any cash proceeds from the incurrence of any Indebtedness of Company or any of its Restricted Subsidiaries (other than with respect to any Indebtedness permitted to be incurred pursuant to Section 6.01), the Borrowers shall prepay the Loans as set forth in Section 2.11(c) in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, in each case, paid to non-Affiliates, including reasonable legal fees and expenses.

 

(v)         Consolidated Excess Cash Flow.  In the event that there shall be Consolidated Excess Cash Flow for any fiscal year (commencing with fiscal year 2021), the Borrowers shall, no later than ninety (90) days after the end of such fiscal year, prepay the Loans as set forth in Section 2.11(c) in an aggregate amount equal to 50% of such Consolidated Excess Cash Flow minus the sum of all voluntary prepayments of Term Loans in such fiscal year.  Any amounts prepaid pursuant to this Section 2.11(b)(v) with respect to any fiscal year in excess of 50% of Consolidated Excess Cash Flow shall be treated as voluntary prepayments made pursuant to Section 2.11(a).

 

(vi)        Extraordinary Receipts No later than the third (3rd) Business Day following the date of receipt by Company or any of its Restricted Subsidiaries of any Extraordinary Receipts arising from Term Priority Collateral in excess of $250,000 in the aggregate in any fiscal year, the Borrowers shall prepay the Loans and as set forth in Section 2.11(c) in the amount of such Extraordinary Receipts in excess of $250,000; provided that, notwithstanding the foregoing, (A) the Borrowers shall only be required to prepay the Loans in an amount equal to 50% of the proceeds of foreign, United States, state or local tax refunds commencing with any refunds related to the taxable year ending on January 30, 2021 and thereafter (excluding the CARES Act Tax Refund Proceeds) (for the avoidance of doubt, the Company and its Restricted Subsidiaries shall not be required to prepay the Loans with the proceeds of sales tax refunds) and (B) so long as no Event of Default has occurred and is continuing on the date of receipt by the Company or any of its Restricted Subsidiaries of the CARES Act Tax Refund Proceeds, the Borrowers shall only be required to prepay the Term Loan as set forth in Section 2.11(c) from the CARES Act Tax Refund Proceeds in an aggregate amount equal to $50,000,000.

 

Notwithstanding any of the foregoing, (a) in no event shall any Net Proceeds or cash proceeds from the incurrence of any Indebtedness or Extraordinary Receipts of the Canadian Loan Parties be required to be applied to prepay any U.S. Term Loan or other U.S. Obligations (and for the avoidance of doubt, the foregoing provisions shall in all cases be subject to Section 9.20), (b) to the extent that any or all of the Net Proceeds of any Disposition by a Foreign Subsidiary (other than a Canadian Loan Party) giving rise to a prepayment event pursuant to Section 2.11(b)(i) (a “Foreign Disposition”), the Net Proceeds of any Casualty from a Foreign Subsidiary (other than a Canadian Loan Party) (a “Foreign Casualty Event”) or Extraordinary Receipts of a Foreign Subsidiary (other than a Canadian Loan Party to the extent used to prepay Canadian Term Loans) are prohibited or delayed by applicable local law from being repatriated to the United States, the portion of such Net Proceeds or Extraordinary Receipts so affected will not be required to be applied to repay Term Loans at the times provided in this Section 2.11(b) but may be retained by the applicable Foreign Subsidiary (other than a Canadian Loan Party to the extent used to prepay Canadian Term Loans) so long as the applicable local law will not permit repatriation to the United States (each Borrower hereby agreeing to cause the applicable Foreign Subsidiary (other than a Canadian Loan Party to the extent used to prepay Canadian Term Loans) to use its commercially reasonable efforts to promptly take all actions reasonably required by the applicable local law to permit such repatriation) and, if within 12 months of the applicable prepayment event, such repatriation of any of such affected Net Proceeds or Extraordinary Receipt is permitted under the applicable local law, such repatriation will be immediately effected and such repatriated Net Proceeds will be promptly (and in any event not later than ten Business Days after such repatriation) applied (net of additional taxes payable or reserved against as a result thereof) to the repayment of the Term Loans pursuant to this Section 2.11(b) to the extent provided herein and (c) to the extent that the applicable Borrower has determined in good faith and in consultation with the Administrative Agent that repatriation to the United States of any or all of the Net Proceeds of any Foreign Disposition or any Foreign Casualty Event or Extraordinary Receipts of a Foreign Subsidiary (other than a Canadian Loan Party to the extent used to prepay Canadian Term Loans) would have material adverse tax consequences (relative to the relevant Foreign Disposition, Foreign Casualty Event or Extraordinary Receipt and taking into account any foreign tax credit or benefit actually realized in connection with such repatriation) with respect to such Net Proceeds or Extraordinary Receipt, the Net Proceeds or Extraordinary Receipt so affected may be retained by the applicable Foreign Subsidiary (other than a Canadian Loan Party to the extent used to prepay Canadian Term Loans); provided that, to the extent that within 12 months of the applicable prepayment event, the repatriation of any Net Proceeds or Extraordinary Receipt from such Foreign Subsidiary (other than a Canadian Loan Party to the extent used to prepay Canadian Term Loans) would no longer have material adverse tax consequences (relative to the relevant Foreign Disposition, Foreign Casualty Event or Extraordinary Receipt), such Foreign Subsidiary (other than a Canadian Loan Party to the extent used to prepay Canadian Term Loans) shall promptly repatriate an amount equal to such Net Proceeds or Extraordinary Receipt to the Administrative Agent, which amount shall be applied to the prepayment of Term Loans pursuant to Section 2.11(b).

(c)          Application of Payments.  Except in connection with any Waivable Mandatory Prepayment provided for in Section 2.11(f), so long as no Event of Default has occurred and is continuing, and subject to Section 9.20 and the terms of the ABL Intercreditor Agreement, any mandatory prepayment of a Term Loan pursuant to Sections 2.11(b)(i) through (b)(vi) above shall be applied to the principal of the Term Loan in the inverse order of maturity, until paid in full. Notwithstanding the foregoing, (i) after the occurrence and during the continuance of an Event of Default, if the Administrative Agent has elected, or has been directed by the Required Lenders, to apply payments in respect of any Obligations in accordance with Section 2.18(b), prepayments required under Section 2.11(b) shall be applied in the manner set forth in Section 2.18(b) and (ii) (A) any payments from the U.S. Loan Parties or in respect of U.S. Collateral shall be applied in accordance with Section 2.18(b) first to the U.S. Obligations until paid in full and second to the Canadian Obligations until paid in full and (B)

 

(d)         Interest and Fees.  Any prepayment made pursuant to this Section 2.11 shall be accompanied by (i) accrued interest on the principal amount being prepaid to the date of prepayment, (ii) any break funding expenses under Section 2.16, and (iii) the Yield Maintenance Premium and Prepayment Premium, if any, payable in connection with such prepayment of the applicable Term Loan.

 

(e)          Cumulative Prepayments.  Except as otherwise expressly provided in this Agreement, payments with respect to any subsection of this Section 2.11 to the extent applicable are in addition to payments made or required to be made under any other subsection of this Section 2.11.

 

(f)         Waivable Mandatory Prepayment.  Anything contained herein to the contrary notwithstanding, in the event that any Borrower is required to make any mandatory prepayment (a “Waivable Mandatory Prepayment”) of the Loans of such Borrower pursuant to Section 2.11(b) not less than 3 Business Days prior to the date on which such Borrower is required to make such Waivable Mandatory Prepayment (the “Required Prepayment Date”), the Borrower Representative shall notify the Administrative Agent of the amount of such prepayment, and the Administrative Agent will promptly thereafter notify each Lender of the amount of such Lender’s Applicable Percentage of such Waivable Mandatory Prepayment and such Lender’s option to refuse such amount.  Each such Lender may exercise such option by giving written notice to the Borrower Representative and the Administrative Agent of its election to do so by 4:00 p.m., New York time on or before the first Business Day prior to the Required Prepayment Date (it being understood that any Lender that does not notify the Borrower Representative and the Administrative Agent of its election to exercise such option by 4:00 p.m., New York time on or before the first Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option). On the Required Prepayment Date, the applicable Borrower shall pay to the Administrative Agent the amount of the Waivable Mandatory Prepayment, which amount shall be applied (i) in an amount equal to that portion of the Waivable Mandatory Prepayment payable to those Lenders that have elected not to exercise such option, to prepay the applicable Term Loan of such Lenders (which prepayment shall be applied to the scheduled installments of principal of such Term Loan in accordance with Section 2.11(c)), and (ii) to the extent of any excess, to the Company.

 

SECTION 2.12  Fees.

 

(a)          Company agrees to pay to the Administrative Agent all fees payable by it in the Fee Letter in the amounts and at the times specified therein.

 

(b)          All fees payable hereunder shall be paid on the dates due and shall be paid in U.S. Dollars, in immediately available funds, to the Administrative Agent for distribution, in the case of commitment fees and participation fees, to the Lenders.

 

(c)          Upon payment, such fees in this Section 2.12 shall not be refundable under any circumstances, absent manifest error in calculation.

 

SECTION 2.13  Interest.

 

(a)          The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.

 

(b)          The Loans comprising each LIBOR Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

 

(c)          Each Protective Advance shall bear interest at the Alternate Base Rate plus the Applicable Rate.

 

(d)         Notwithstanding the foregoing, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Borrower Representative, declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding (including any Yield Maintenance Premium and Prepayment Premium, if applicable) hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder, in each case, from the date such Event of Default occurred until the date such Event of Default is cured or waived in writing in accordance herewith; provided, that (x) the default rate of interest set forth in this clause (d) shall apply automatically and without notice to the Borrower Representative upon the occurrence and during the continuance of any Event of Default under clauses (a) and (e) of Article VII and (y) application of the default rate of interest pursuant to this clause (d) may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender affected thereby” for reductions in interest rates.

 

(e)          Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any LIBOR Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

 

(f)          All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Adjusted LIBO Rate, LIBO Rate or Alternate Base Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. For the purposes of the Interest Act (Canada), the yearly rate of interest to which any rate calculated on the basis of a period of time different from the actual number of days in the year (360 days, for example) is equivalent is the stated rate multiplied by the actual number of days in the year (365 or 366, as applicable) and divided by the number of days in the shorter period (360 days, in the example).

 

SECTION 2.14  Alternate Rate of Interest; Successor LIBOR Rate Index.

 

(a)          Alternative Rate of Interest.

 

(i)          If prior to the commencement of any Interest Period for a LIBOR Borrowing:

 

(A)         the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that adequate and reasonable means do not exist for ascertaining the LIBO Rate for an applicable Interest Period; or

 

(B)        the Administrative Agent is advised by the Required Lenders that the LIBO Rate for an applicable Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining the Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower Representative and the Lenders by electronic communication as provided in Section 9.01 as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower Representative and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, an affected LIBOR Borrowing, as the case may be, shall be ineffective, (ii) any affected LIBOR Borrowing that is requested to be continued shall be continued as an ABR Borrowing on the last day of the then current Interest Period applicable thereto, and (iii) any Borrowing Request for an affected LIBOR Borrowing shall be deemed a request for an ABR Borrowing.

 

(b)          Successor LIBOR Rate Index.

 

(i)        Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event or if an Early Opt-in Event has occurred with respect to the LIBO Rate, the Administrative Agent and the Borrower Representative may amend this Agreement to replace the LIBO Rate with a Benchmark Replacement; and any such amendment will become effective at 5:00 p.m.  New York City time on the fifth (5th) Business Day after the Administrative Agent has provided such proposed amendment to all Lenders, so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders.  Until the Benchmark Replacement with respect to the LIBO Rate is effective, each advance, conversion and renewal of a Loan bearing interest at the LIBO Rate will continue to bear interest with reference to the LIBO Rate; provided however, during a Benchmark Unavailability Period (i) any pending selection of, conversion to or renewal of a Loan bearing interest at the LIBO Rate that has not yet gone into effect shall be deemed to be a selection of, conversion to or renewal of the Alternate Base Rate in the amount of such Loan, (ii) all outstanding Loans bearing interest at the LIBO Rate shall automatically be converted to ABR Loans at the expiration of the existing Interest Period (or sooner, if Administrative Agent cannot continue to lawfully maintain such affected LIBOR Loan) and (iii) the component of the Alternate Base Rate based upon the LIBO Rate will not be used in any determination of the Alternate Base Rate.

 

(ii)        In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement.

 

(iii)        The Administrative Agent will promptly notify the Company and the Lenders of (i) the implementation of any Benchmark Replacement, (ii) the effectiveness of any Benchmark Replacement Conforming Changes and (iii) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or the Lenders pursuant to this Section 2.14(b) including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 2.14(b).

 

SECTION 2.15  Increased Costs.

 

(a)          If any Change in Law shall:

 

(i)         impose, modify or deem applicable any reserve, special deposit, or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate);

 

(ii)         impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender; or

 

(iii)       subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (e) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

 

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender or such other Recipient hereunder (whether of principal, interest or otherwise), then, upon request of such Lender or such other Recipient, the applicable Borrower will pay to such Lender or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)        If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitment of, or the Loans made by, such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy and liquidity), then from time to time the applicable Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

 

(c)         A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower Representative accompanied by a certificate setting forth in reasonable detail any amount or amounts and upon such delivery of such items, shall be conclusive absent manifest error. Each applicable Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

 

(d)          Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that no Borrower shall be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than nine (9) months prior to the date that such Lender notifies the Borrower Representative of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 9-month period referred to above shall be extended to include the period of retroactive effect thereof.

 

(e)         Without duplication of any such reserves which have been compensated as a result of the Statutory Reserve Rate, each applicable Borrower shall pay to each Lender (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including eurocurrency funds or deposits, additional interest on the unpaid principal amount of each LIBOR Loan

 

SECTION 2.16  Break Funding Payments. In the event of (a) the payment of any principal of any LIBOR Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11), (b) the conversion of any LIBOR Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any LIBOR Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any LIBOR Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower Representative pursuant to Section 2.19 or 9.02(d), then, in any such event, each applicable Borrower shall compensate each Lender for the loss, cost and expense (excluding any loss of margin or profit therefrom) attributable to such event which in the reasonable judgment of such Lender, such Lender incurred. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) with respect to a LIBOR Loan, the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan (but not including the Applicable Rate, margin or profit applicable thereto), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the applicable currency of a comparable amount and period from other banks in the London, European or Canadian interbank market. A certificate of any Lender setting forth in reasonable detail any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower Representative and upon delivery of such items shall be conclusive absent manifest error.  Each applicable Borrower shall pay such Lender the amount shown as due on any such certificate within 30 days after receipt thereof.

 

SECTION 2.17  Withholding of Taxes; Gross-Up.

 

(a)          Payments Free of Taxes. Any and all payments by or on account of  any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.17) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding for Indemnified Tax been made.

 

(b)          Payment of Other Taxes by the Loan Parties. The applicable Loan Party shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(c)          Evidence of Payment. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.17, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(d)         Indemnification by the Loan Parties. Subject in all cases to Section 9.20, the Loan Parties shall jointly and severally indemnify each Recipient, within 10 days after receipt by the applicable Loan Party of demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.17) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail the calculation of the amount of such payment or liability delivered to the Borrower Representative by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.  Notwithstanding the foregoing, in no event shall the Canadian Borrower or any other Excluded Subsidiary be required to indemnify any Lender in respect of any Indemnified Taxes in respect of any U.S. Term Loan or any other U.S. Obligations (or any reasonable expenses arising therefrom or with respect thereto).

 

(e)          Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail the calculation of the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

 

(f)          Status of Lenders. (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower Representative and the Administrative Agent, at the time or times reasonably requested by the Borrower Representative or the Administrative Agent and at the time or times prescribed by applicable law, such properly completed and executed documentation reasonably requested by the Borrower Representative or  the  Administrative Agent or prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower Representative or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower Representative or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding

 

(ii)         Without limiting the generality of the foregoing, in the event that any Borrower is a U.S. Person,

 

(A)        any Lender that is a U.S. Person shall deliver to the Borrower Representative and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or the Administrative Agent), executed copies of IRS Form W-9 (or successor form) certifying that such Lender is exempt from U.S. Federal backup withholding tax;

 

(B)        any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Representative and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or the Administrative Agent), whichever of the following is applicable:

 

(1)         in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, properly completed and executed copies of IRS Form W-8BEN or W-8BEN-E, as applicable (or successor form), establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, properly completed and executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable (or successor form), establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)          in the case of a Foreign Lender claiming that its extension of credit will generate U.S. effectively connected income, properly completed and executed copies of IRS Form W-8ECI (or successor form);

 

(3)          in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit G-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) properly completed and executed copies of IRS Form W- 8BEN or W-8BEN-E, as applicable (or successor form); or

 

(4)         to the extent a Foreign Lender is not the Beneficial Owner, properly completed and executed copies of IRS Form W-8IMY (or successor

 

(C)        any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Representative and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Representative or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrowers or the Administrative Agent to determine the withholding or deduction required to be made; and

 

(D)        if a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower Representative and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower Representative or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower Representative or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower Representative and the Administrative Agent in writing of its legal inability to do so.

 

(g)         Treatment of Certain Refunds. If any party determines in its sole discretion exercised in good faith that it has received a refund of any Taxes (including any application thereof to another amount owed to the refunding Governmental Authority) as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.17 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental

 

(h)         Survival. Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

 

(i)           Defined Terms. For purposes of this Section 2.17, the term “applicable law” includes FATCA.

 

SECTION 2.18  Payments Generally; Allocation of Proceeds; Sharing of Set-offs. (a) Each Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, or fees, or of amounts payable under Sections 2.15, 2.16 or 2.17, or otherwise) prior to 3:00 p.m., New York time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Administrative Agent’s Payment Office, or as otherwise directed by the Administrative Agent, except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder of principal or interest in respect of any Loan and all other payments hereunder and under each other Loan Document, shall be made in U.S. Dollars.

 

(b)         Any proceeds of Collateral received by the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents or (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11(c)) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, shall be applied ratably (but subject to Section 9.20) first, to pay any fees (other than any Yield Maintenance Premium and Prepayment Premium), indemnities, or expense reimbursements including amounts then due to the Administrative Agent from the applicable Borrower until paid in full, second, to pay any fees (other than any Yield Maintenance Premium and Prepayment Premium) or expense reimbursements then due to the Lenders from the applicable Borrower until paid in full, third, to pay interest due in respect of Protective Advances until paid in full, fourth, to pay the principal of Protective Advances until paid in full, fifth, to pay interest then due and payable on the applicable Loans (other than Protective Advances) until paid in full, sixth, to prepay principal on the applicable Loans secured by such Collateral (other than Protective Advances) until paid in full, seventh, to pay any Yield Maintenance Premium and Prepayment Premium then due and payable to the Lenders until paid in full and eighth, to the payment of any other Secured Obligation of the applicable Borrower; provided that any such application of proceeds from any Canadian Collateral or any Canadian Loan Party shall be made solely in respect of Canadian Secured Obligations. Notwithstanding anything to the contrary contained in

 

(c)          [Reserved].

 

(d)         If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than its applicable proportion as provided herein, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by a Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender or a Disqualified Institution), or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the applicable Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Subject to Section 9.20, the U.S. Borrower and Canadian Borrower each agrees, with respect to itself and the Term Loans made to it, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation in Term Loans made to such Borrower pursuant to the foregoing arrangements may, subject to Section 9.08, exercise against such Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation to the extent otherwise permitted under this Agreement for a Lender. It is acknowledged and agreed that the foregoing provisions of this Section 2.18(d) reflect an agreement entered into solely among the Lenders (and not the Company or any Borrower) and the consent of the Company or any Borrower shall not be required to give effect to any action taken by the Lenders or the Administrative Agent pursuant to such provisions.

 

(e)        Unless the Administrative Agent shall have received notice from the Borrower Representative prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that a Borrower will not make such payment, the Administrative Agent may assume that each applicable Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due.  In such event, if an applicable Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

(g)          The Administrative Agent may from time to time provide the Borrowers with billing statements or invoices with respect to any of the Secured Obligations (the “Billing Statements”). The Administrative Agent is under no duty or obligation to provide Billing Statements, which, if provided, will be solely for the Borrowers’ convenience. The Billing Statements may contain estimates of the amounts owed during the relevant billing period, whether of principal, interest, fees or other Secured Obligations. If the Borrowers pay the full amount indicated on a Billing Statement on or before the due date indicated on such Billing Statement, the Borrowers shall not be in default; provided, that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is less than the payment due at that time shall not constitute a waiver of the Administrative Agent’s or the Lenders’ right to receive payment in full at another time.

 

SECTION 2.19  Mitigation Obligations; Replacement of Lenders.

 

(a)          If any Lender requests compensation under Section 2.15, or if any Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to such Lender.

 

(b)          If any Lender requests compensation under Section 2.15, or if any Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with paragraph (a) of this Section, or if any Lender becomes a Defaulting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights (other than its existing rights to payments pursuant to Section 2.15 or 2.17) and obligations under this Agreement and other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) if the assignee is not already a Lender, an Affiliate of a Lender or an Approved Fund, the Borrowers shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld or delayed, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the  extent  of  such outstanding principal and accrued interest and fees) or the applicable Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

 

SECTION 2.20  Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

 

(a)          [reserved];

 

(b)        such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in Section 9.02(b)) and the Commitment and Term Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02) or under any other Loan Document; provided, that, except as otherwise provided in Section 9.02, this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

 

(c)          [reserved];

 

(d)          [reserved]; and

 

(e)          Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of any Defaulting Lender or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower Representative may request (so long as no Default or Event of Default exists) to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and a Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower Representative as a result of any judgment of a court of competent jurisdiction obtained by the Borrower Representative or any other Loan Party against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this Section 2.20(e) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

SECTION 2.21  Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Obligations (including a payment effected through exercise of a right of setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion), then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender. The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been

taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds. The provisions of this Section 2.21 shall survive the termination of this Agreement.

 

ARTICLE III.

 

 

Each Loan Party represents and warrants to the Lenders that:

 

SECTION 3.01  Organization and Qualification; Power and Authority; Compliance With Laws; Event of Default.  Each Loan Party and each Restricted Subsidiary of each Loan Party (i) is a corporation, partnership, limited liability company or unlimited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (ii) has the lawful power to own or lease its properties and to engage in the business it presently conducts or proposes to conduct, (iii) is duly licensed or qualified and in good standing in each jurisdiction where the property owned or leased by it or the nature of the business transacted by it or both makes such licensing or qualification necessary, except where the failure to be so licensed or qualified and in good standing would not constitute a Material Adverse Effect, (iv) has full power to enter into, execute, deliver and carry out this Agreement and the other Loan Documents to which it is a party, to incur the Indebtedness contemplated by the Loan Documents and to perform its Obligations under the Loan Documents to which it is a party, and all such actions have been duly authorized by all necessary proceedings on its part, and (v) is in compliance with all applicable Requirements of Law (other than Environmental Laws which are specifically addressed in Section 3.13 and Anti-Terrorism Laws which are specifically addressed in Section 3.16) in all jurisdictions in which any Loan Party or Restricted Subsidiary of any Loan Party is presently or will be doing business except where the failure to do so would not constitute a Material Adverse Effect.  No Event of Default or Default exists or is continuing.  No Loan Party is a Covered Entity.

 

SECTION 3.02  Capitalization; Subsidiaries and Joint Ventures; Investment Companies.  Schedule 3.02 states (i) the name of each of the Company’s Subsidiaries, its jurisdiction of organization and the amount, percentage and type of equity interests in such Subsidiary (the “Subsidiary Equity Interests”), (ii) all Joint Ventures in which the Company or any Restricted Subsidiary owns any Equity Interests (the “Joint Venture Equity Interests”) and (iii) any options, warrants or other rights outstanding to purchase any such Subsidiary Equity Interests or Joint Venture Equity Interests.  The Company and each Restricted Subsidiary of the Company has good and marketable title to all of the Subsidiary Equity Interests and Joint Venture Equity Interests it purports to own, free and clear in each case of any Lien (other than Permitted Liens) and all such Subsidiary Equity Interests and Joint Venture Equity Interests have been validly issued and fully paid and are nonassessable (if applicable).  None of the Loan Parties or Subsidiaries of any Loan Party is an “investment company” registered or required to be registered under the Investment Company Act of 1940 or under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940 and shall not become such an “investment company” or under such “control.”

 

SECTION 3.03  Validity and Binding Effect.  This Agreement and each of the other Loan Documents (i) has been duly and validly executed and delivered by each Loan Party that is a party thereto and (ii) constitutes, or will constitute, legal, valid and binding obligations of each Loan Party that is a party thereto, enforceable against such Loan Party in accordance with its terms, except to the extent that enforceability of this Agreement or any other Loan Document may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally or limiting the right of specific performance or by general principles of equity.

 

SECTION 3.04  No Conflict; Material Agreements; Consents.  Neither the execution and delivery of this Agreement, the other Loan Documents or the ABL Documents by any Loan Party nor the consummation of the transactions herein or therein contemplated or compliance with the terms and provisions hereof or thereof by any of them will conflict with, constitute a default under or result in any breach of (i) the terms and conditions of the articles or certificate of incorporation, code of regulations, bylaws, certificate of limited partnership, partnership agreement, certificate of formation, operating agreement, limited liability company agreement or other organizational documents of any Loan Party, (ii) any Requirement of Law or any agreement or instrument or order, writ, judgment, injunction or decree to which any Loan Party or any of its Restricted Subsidiaries is a party or by which it or any of its Restricted Subsidiaries is bound or to which it is subject, in each case under clause (ii), except as would not result in a Material Adverse Effect, or (iii) result in the creation or enforcement of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan Party or any of its Restricted Subsidiaries (except Liens created pursuant to the Loan Documents and the ABL Documents).  None of the Loan Parties or their Restricted Subsidiaries is bound by any contractual obligation, or subject to any restriction in any organization document, or any Requirement of Law which results in a Material Adverse Effect.  No consent, approval, exemption, order or authorization of, or a registration or filing with, any Governmental Authority or any other Person is required by any Requirement of Law or any agreement in connection with the execution, delivery and carrying out of this Agreement and the other Loan Documents other than those which have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents.

 

SECTION 3.05  Litigation.  There are no actions, suits, proceedings or investigations pending or, to the knowledge of any Loan Party, threatened against such Loan Party or any Restricted Subsidiary of such Loan Party at law or in equity before any arbitrator or any Governmental Authority which (i) involve any Loan Document or the Transactions or (ii) individually or in the aggregate would reasonably be expected to result in a Material Adverse Effect.  None of the Loan Parties or any Restricted Subsidiaries of any Loan Party is in violation of any order, writ, injunction or any decree of any Governmental Authority which constitutes a Material Adverse Effect.

 

SECTION 3.06  Financial Statements; No Material Adverse Effect; Beneficial Ownership Certification.

 

(a)          Historical Statements.  The Loan Parties have delivered or caused to be delivered to the Administrative Agent copies of the (i) audited consolidated year-end financial statements of the Company and its Subsidiaries for and as of the end of the fiscal year ended February 1, 2020 and (ii) unaudited consolidated interim financial statements of the Company and its Subsidiaries for and as of the fiscal quarter ended on May 2, 2020 (such annual and interim statements being collectively referred to as the “Statements”).  The Statements were compiled from the books and records maintained by the Loan Parties’ management, are correct and complete in all material respects and fairly represent in all material respects the consolidated financial condition of the Company and its Subsidiaries as of the respective dates thereof and the results of operations for the fiscal periods then ended and have been prepared in accordance with GAAP consistently applied, subject (in the case of the interim statements) to normal year-end audit adjustments.

 

(b)          Financial Projections.

 

(i)          The Loan Parties have delivered to the Administrative Agent summary projected financial statements (including, without limitation, statements of operations and cash flow together with a detailed explanation of the assumptions used in preparing such projected financial statements) of the Company and its Subsidiaries on a monthly basis for fiscal year 2021 and on an annual basis thereafter

 

(ii)         The Projections have been prepared in good faith based on assumptions believed by the Company to be reasonable at the time such Projections were prepared and information believed by the Company to have been accurate based upon the information available to the Company at the time such Projections were furnished to the Lenders, and the Company is not be aware of any facts or information that would lead it to believe that such Projections are incorrect or misleading in any material respect; it being understood that (a) the Projections represent a reasonable range of possible results in light of the history of the business, present and foreseeable conditions and the intentions of the Loan Parties’ management, it being understood that such Projections (i) are as to future events and not to be viewed as facts, (ii) are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries, and (iii) no assurance can be given that the Projections will be realized, (b) actual results may significantly vary from the Projections and such variations may be adverse and material and (c) the Projections should not be regarded as a representation by the Loan Parties or its management that the projected results or financial condition of the Loan Parties will be achieved.

 

(c)        Accuracy of Financial Statements; No Material Adverse Effect.  As of the respective dates of the Statements, no Loan Party nor any Subsidiary thereof has any liabilities, contingent or otherwise, or forward or long-term commitments that are not disclosed in the Statements or in the notes thereto, and except as disclosed therein there are no unrealized or anticipated losses from any commitments of any Loan Party or any Subsidiary thereof and, in each case, which constitutes a Material Adverse Effect.  Since February 1, 2020, no Material Adverse Effect has occurred.

 

(d)          Beneficial Ownership.  As of the date hereof, the information included in the Beneficial Ownership Certification is true and correct in all material respects.

 

SECTION 3.07  Margin Stock.  None of the Loan Parties or any Subsidiaries of any Loan Party engages or intends to engage principally, or as one of its important activities, in the business of extending credit for the purpose, immediately, incidentally or ultimately, of purchasing or carrying margin stock (within the meaning of Regulation U, T or X as promulgated by the Board of Governors of the Federal Reserve System).  No part of the proceeds of any Loan has been or will be used, immediately, incidentally or ultimately, to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or which is inconsistent with the provisions of the regulations of the Board of Governors of the Federal Reserve System.  None of the Loan Parties or any Subsidiary of any Loan Party holds or intends to hold or, after giving effect to the use of proceeds of any Loan, will hold, margin stock in such amounts that more than twenty-five (25%) of the reasonable value of the assets of any Loan Party or Subsidiary of any Loan Party are or will be represented by margin stock.

 

SECTION 3.08  Full Disclosure.  Neither this Agreement nor any other Loan Document, nor any certificate, statement, agreement or other documents furnished to the Administrative Agent or any Lender in connection herewith or therewith, taken as a whole, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein, in light of the circumstances under which they were made, not misleading.  There is no fact known to any Loan Party which would reasonably be expected to constitute a Material Adverse Effect which has not been set forth in this Agreement or in the certificates, statements, agreements or other documents furnished in writing to the Administrative Agent and the Lenders prior to or at the date hereof in connection with the transactions contemplated hereby.

Fiscal Period		Consolidated EBITDA
1 month ended September 30, 2020		$	15,200,000
2 months ended October 31, 2020		$	40,900,000
3 months ended November 30, 2020		$	41,000,000
4 months ended December 31, 2020		$	57,600,000
5 months ended January 31, 2021		$	69,200,000
6 months ended February 28, 2021		$	50,400,000
7 months ended March 31, 2021		$	85,300,000
8 months ended April 30, 2021		$	94,400,000
9 months ended May 31, 2021		$	115,700,000
10 months ended June 30, 2021		$	134,000,000
11 months ended July 31, 2021		$	135,200,000
12 months ended August 31, 2021		$	146,700,000
12 months ended September 30, 2021		$	142,300,000
12 months ended October 31, 2021		$	138,800,000
12 months ended November 30, 2021		$	152,300,000
12 months ended December 31, 2021		$	147,200,000
12 months ended January 31, 2022		$	130,600,000
12 months ended February 28, 2022		$	125,000,000

Fiscal Period		Consolidated EBITDA
12 months ended March 31, 2022		$	135,000,000
12 months ended April 30, 2022		$	140,000,000
12 months ended May 31, 2022		$	145,000,000
12 months ended June 30, 2022		$	150,000,000
12 months ended July 31, 2022		$	150,000,000
12 months ended August 31, 2022		$	155,000,000
12 months ended September 30, 2022		$	160,000,000
12 months ended October 31, 2022		$	165,000,000
12 months ended November 30, 2022		$	170,000,000
12 months ended December 31, 2022 and each 12 month period ended thereafter		$	175,000,000