Innoviva
Innoviva, Inc. (Form: 8-K, Received: 08/21/2017 07:10:01)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  August 21, 2017 (August 18, 2017)

 


 

INNOVIVA, INC.

(Exact Name of Registrant as Specified in its Charter)

 


 

Delaware
(State or Other Jurisdiction of Incorporation)

 

000-30319
(Commission File Number)

 

94-3265960
(I.R.S. Employer Identification Number)

 

2000 Sierra Point Parkway

Suite 500
Brisbane, California 94005

(650) 238-9600

(Addresses, including zip code, and telephone numbers, including area code, of principal executive offices)

 

 

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

 


 

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

 

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

 

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

 

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

 

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

 

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

 

Emerging growth company               o

 

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

 

 

 



 

Item 1.01. Entry into a Material Definitive Agreement.

 

On August 18, 2017, Innoviva, Inc. (“Innoviva” or the “Company”) entered into a Credit Agreement (the “Credit Agreement”) with Morgan Stanley Senior Funding, Inc. (“MSSF”), as administrative agent and collateral agent, the other agents party thereto and the lenders referred to therein (collectively, the “Lenders”). Pursuant to the Credit Agreement, the Lenders have provided $250,000,000 in senior secured first lien term loans (the “Term Loans”). The proceeds from the Term Loans will be used by the Company to redeem in full the LABA PhaRMA sm  9.0% Fixed Rate Term Notes due 2029 (the “2029 Notes”), issued pursuant to the Amended and Restated Indenture, dated as of August 3, 2016 (as further amended, supplemented or otherwise modified from time to time prior to its termination hereunder, the “LABA Indenture”), by and between LABA Royalty Sub LLC, a Delaware limited liability company and wholly owned subsidiary of Innoviva (“LABA Royalty Sub”), as the issuer, and U.S. Bank National Association (“U.S. Bank”), as trustee of the 2029 Notes (in such capacity, the “LABA Trustee”), and to pay related fees and expenses.

 

The Term Loans bear interest based on a fluctuating rate of interest measured, at Innoviva’s option, at an alternative base rate equal to the highest of the (a) prime rate, (b) ½ of 1% per annum above the federal funds effective rate, (c) LIBOR for an interests period of one month plus 1.00% and (d) 2.00% (the “Base Rate”) or LIBOR, plus a margin. The margin for Base Rate borrowings under the Credit Agreement is 3.50% and for LIBOR borrowings under the Credit Agreement is 4.50%. Borrowings based on LIBOR under the Credit Agreement will be subject to a 1.00% LIBOR floor. Interest for Base Rate-based loans is calculated on the basis of a 365/366-day year and interest for LIBOR-based loans is calculated on the basis of a 360-day year.

 

Subject to certain customary exceptions, all obligations of Innoviva under the Credit Agreement are unconditionally guaranteed by Innoviva’s wholly owned subsidiary, Advanced Medicine East, Inc., and will be required to be guaranteed by each of Innoviva’s subsequently acquired or organized direct and indirect restricted wholly-owned domestic subsidiaries whose assets or net revenues exceed 5% of the consolidated assets or net revenues, as the case may be, of Innoviva and its restricted subsidiaries (the “Guarantors”). Other domestic restricted subsidiaries, subject to certain customary exceptions, will be required to become Guarantors to the extent that domestic restricted subsidiaries excluded from such guarantee obligation represent, in the aggregate, more than 10% of the consolidated assets and more than 10% of the consolidated net revenues of Innoviva.

 

The obligations under the Credit Agreement are Innoviva’s and the Guarantors’ senior secured obligations, collateralized by a lien on substantially all of Innoviva’s and the Guarantors’ personal property and material real property assets (if any) (subject in each case to certain customary exceptions).

 

The Term Loans may be prepaid, in whole or in part, without premium or penalty, except that (i) prepayments financed by the incurrence of lower-yielding indebtedness (other than in connection with certain change-of-control or transformative acquisitions) within six months from August 18, 2017 will be subject to a prepayment premium of 1.0% of the principal amount prepaid and (ii) lenders will be compensated for LIBOR breakage costs (if any).

 

The Term Loans mature five years following the effective date. The Credit Agreement requires quarterly principal payments equal to 2.50% of the original principal amount of the Term Loans.

 

Additionally, the Credit Agreement stipulates an annual principal payment of a percentage of Excess Cash Flow (as defined in the Credit Agreement) (“ECF”) to repay the Term Loans. The first ECF application date will be measured as of the end of fiscal year 2018 and the ECF percentage is scheduled to be 50% if the consolidated first lien secured leverage ratio of the Company as of the last day of the applicable fiscal year is greater than 1.55 to 1.00, 25% if the consolidated first lien secured leverage ratio of the Company as of the last day of the applicable fiscal year is less than or equal to 1.55 to 1.00 but greater than 0.55 to 1.00 and 0% otherwise.

 

2



 

The Term Loans are also subject to prepayment from (i) the net cash proceeds of certain debt incurred or issued by Innoviva and its restricted subsidiaries and (ii) the net cash proceeds received by Innoviva or its restricted subsidiaries from certain assets sales and recovery events, subject to certain reinvestment rights.

 

Innoviva can request, at any time and from time to time, subject to the satisfaction of customary conditions, the establishment of one or more incremental term loan facilities with commitments in an aggregate amount not to exceed, (i) (x) in the case of incremental term loans secured on a pari passu basis with the Term Loans, an amount such that the consolidated first lien secured leverage ratio of the Company calculated on a pro forma basis would not be greater than 2.00 to 1.00 or (y) in the case of incremental term loans secured on a junior basis to the Term Loans or unsecured, an amount such that the consolidated leverage ratio of the Company calculated on a pro forma basis would not be greater than 3.56 to 1.00, plus (ii) the greater of (x) $75,000,000 and (y) 45% of the prior four quarters consolidated EBITDA of the Company, plus (iii) the amount of any voluntary prepayments of the Term Loans other

than such voluntary prepayments financed with the proceeds of long term indebtedness. Lenders are not obligated to commit to provide any such incremental term loan facility requested by Innoviva.

 

The Credit Agreement also contains restrictive covenants that limit, among other things, Innoviva’s ability and that of Innoviva’s restricted subsidiaries to incur additional indebtedness or issue certain preferred equity, pay dividends or make other distributions or other restricted payments, make certain investments, create restrictions on distributions from subsidiaries (including prepayments of junior indebtedness), amend the terms of certain other indebtedness, create liens on certain assets, sell certain assets, consolidate, merge, liquidate, dissolve, sell or otherwise dispose of all or substantially all of its assets, enter into certain hedging arrangements, alter its line of business and enter into certain transactions with affiliates. The Credit Agreement also contains customary events of default, including upon the failure to make timely payments under the Credit Agreement or other material indebtedness, the failure to satisfy certain covenants, the occurrence of a change of control and specified events of bankruptcy and insolvency.

 

The Credit Agreement provides for customary events of default, including: non-payment of principal, interest or other amounts payable under the Credit Agreement or related loan document; violation of covenants; material inaccuracy of representations or warranties; cross default to other material indebtedness; certain bankruptcy and insolvency events; certain ERISA events; material invalidity of guarantees or security interests; failure of the obligations of the Company under the Credit Agreement and related loan documents to constitute senior indebtedness with respect to the Company’s 2.125% Convertible Subordinated Notes due 2023; material judgments; and change of control.

 

In connection with the redemption in full of the 2029 Notes and the execution of the LABA Termination Agreement (as defined below), on August 18, 2017, Innoviva and LABA Royalty Sub entered into an assignment agreement (the “Assignment Agreement”), pursuant to which LABA Royalty Sub transferred and assigned to Innoviva all assets of LABA Royalty Sub, including (i) the right, title and interest of LABA Royalty Sub, in all of the Collateral (as defined in the LABA Indenture) and proceeds thereof and (ii) the right, title and interest of LABA Royalty Sub, in the accounts and other assets and property of LABA Royalty Sub that are not part of the Collateral.

 

The above descriptions of the Credit Agreement and the Assignment Agreement are a summary only and are qualified in their entirety by reference to the Credit Agreement and the Assignment Agreement, which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.

 

Item 1.02. Termination of a Material Definitive Agreement.

 

On August 18, 2017, in connection with Innoviva’s entry into the Credit Agreement and use of the proceeds thereof to redeem the 2029 Notes in full, Innoviva, LABA Royalty Sub and the LABA Trustee entered into a Termination Agreement (the “LABA Termination Agreement”). Pursuant to the LABA Termination Agreement, the parties thereto agreed to terminate the Terminated Transaction Documents (as defined below) (other than any such provisions which by their terms expressly survive the termination of the applicable Terminated Transaction Document). The Terminated Transaction Documents consisted of (i) the LABA Indenture, (ii) each 2029 Note, (iii) the Sale and Contribution Agreement, dated as of April 17, 2014, by and between Innoviva, as the transferor, and LABA Royalty Sub, as the transferee, (iv) the Servicing Agreement, dated as of April 17, 2014, by and between LABA Royalty Sub, as the issuer, and Innoviva, as the servicer and (v) the Account Control Agreement, dated as of April 17, 2014, by and among LABA Royalty Sub, as grantor, Innoviva, as the servicer, U.S. Bank, as the secured party and U.S. Bank, as a “securities intermediary” and a “bank.”

 

The above description of the LABA Termination Agreement is a summary only and is qualified in its entirety by reference to the LABA Termination Agreement, which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.

 

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

 

The information required by this Item 2.03 is contained in Item 1.01 above and is incorporated herein by reference.

 

3



 

Item 8.01. Other Events.

 

On August 21, 2017, the Company issued a press release announcing the execution of the Credit Agreement and the repayment of the remaining balance on the 2029 Notes. A copy of the press release is attached as Exhibit 99.1.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

10.1

 

Credit Agreement, dated as of August 18, 2017, among Innoviva, Inc., Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, the other agents party thereto and the lenders referred to therein.

 

 

 

10.2

 

Assignment Agreement, dated as of August 18, 2017, by and between Innoviva and LABA Royalty Sub LLC.

 

 

 

10.3

 

Termination Agreement, dated as of August 18, 2017, by and among LABA Royalty Sub LLC, Innoviva, Inc. and U.S. Bank National Association.

 

 

 

99.1

 

Press Release dated August 21, 2017.

 

4



 

SIGNATURE

 

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

 

 

INNOVIVA, INC.

 

 

 

Date: August 21, 2017

By:

/s/ Eric d’Esparbes

 

 

Eric d’Esparbes

 

 

Chief Financial Officer

 

5


Exhibit 10.1

 

CREDIT AGREEMENT

 

dated as of August 18, 2017

 

among

 

INNOVIVA, INC.,
as the Borrower,

 

The Several Lenders
from Time to Time Parties Hereto

 

and

 

MORGAN STANLEY SENIOR FUNDING, INC.,
as Administrative Agent and Collateral Agent

 

_____________________________________________________________

 

MORGAN STANLEY SENIOR FUNDING, INC.,
as Sole Lead Arranger

 

MORGAN STANLEY SENIOR FUNDING, INC. and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
as Joint Bookrunners

 

BANK OF AMERICA, N.A.,

as Documentation Agent

 



 

TABLE OF CONTENTS

 

Clause

 

Page

 

 

 

SECTION 1.

DEFINITIONS

1

 

 

 

1.1.

Defined Terms

1

1.2.

Other Interpretive Provisions

52

1.3.

Pro Forma Calculations; Limited Condition Acquisitions

53

1.4.

Rounding

55

1.5.

Rates

55

1.6.

Cashless Rolls

55

 

 

 

SECTION 2.

AMOUNT AND TERMS OF TERM COMMITMENTS

55

 

 

 

2.1.

Term Commitments

55

2.2.

Procedure for Term Loan Borrowing

56

2.3.

Repayment of Term Loans

56

2.4.

Incremental Term Loans

56

2.5.

Fees

60

2.6.

Refinancing Amendments

60

 

 

 

SECTION 3.

GENERAL PROVISIONS APPLICABLE TO LOANS

61

 

 

 

3.1.

Optional Prepayments

61

3.2.

Mandatory Prepayments; Termination of Commitments; Prepayment Premium

62

3.3.

Conversion and Continuation Options

65

3.4.

Limitations on LIBOR Tranches

66

3.5.

Interest Rates and Payment Dates

66

3.6.

Computation of Interest and Fees

67

3.7.

Inability to Determine Interest Rate

67

3.8.

Pro Rata Treatment; Application of Payments; Payments

68

3.9.

Requirements of Law

69

3.10.

Taxes

71

3.11.

Indemnity

75

3.12.

Change of Lending Office

75

3.13.

Replacement of Lenders

75

3.14.

Evidence of Debt

76

3.15.

Illegality

77

3.16.

Extension Offers

77

 

 

 

SECTION 4.

REPRESENTATIONS AND WARRANTIES

78

 

 

 

4.1.

Financial Condition

79

4.2.

No Change

79

4.3.

Corporate Existence; Compliance with Law

79

4.4.

Power; Authorization; Enforceable Obligations

79

4.5.

No Legal Bar

80

 

i



 

4.6.

Litigation and Adverse Proceedings

80

4.7.

Insurance

80

4.8.

Ownership of Property; Liens

80

4.9.

Intellectual Property; Royalty Rights

81

4.10.

Taxes

82

4.11.

Federal Reserve Regulations

82

4.12.

Labor Matters

82

4.13.

ERISA

82

4.14.

Investment Company Act

83

4.15.

Capital Stock and Ownership Interests of Subsidiaries

83

4.16.

Use of Proceeds

83

4.17.

Environmental Matters

83

4.18.

Accuracy of Information, etc.

84

4.19.

Security Documents

85

4.20.

Solvency

85

4.21.

Senior Indebtedness

85

4.22.

EEA Financial Institution

85

4.23.

Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws

85

 

 

 

SECTION 5.

CONDITIONS PRECEDENT

86

 

 

 

5.1.

Conditions to Extension of Credit

86

5.2.

Conditions to Each Incremental Term Loan

89

 

 

 

SECTION 6.

AFFIRMATIVE COVENANTS

89

 

 

 

6.1.

Financial Statements

89

6.2.

Certificates; Other Information

90

6.3.

Payment of Taxes

91

6.4.

Maintenance of Existence; Compliance

91

6.5.

Maintenance of Property; Insurance

92

6.6.

Inspection of Property; Books and Records; Discussions

92

6.7.

Notices

93

6.8.

Environmental Laws

93

6.9.

Intellectual Property; Royalty Rights

94

6.10.

Post-Closing; Additional Collateral, etc.

94

6.11.

Further Assurances

96

6.12.

Rated Credit Facility; Corporate Ratings

97

6.13.

Use of Proceeds

97

6.14.

Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws

97

6.15.

Designation of Subsidiaries

97

 

 

 

SECTION 7.

NEGATIVE COVENANTS

98

 

 

 

7.1.

Indebtedness

98

7.2.

Liens

101

7.3.

Fundamental Changes

105

 

ii



 

7.4.

Disposition of Property

106

7.5.

Restricted Payments

109

7.6.

Investments

111

7.7.

Optional Payments and Modifications of Certain Debt Instruments

113

7.8.

Transactions with Affiliates

115

7.9.

Lines of Business

116

7.10.

Hedge Agreements

116

7.11.

Changes in Fiscal Periods

116

7.12.

Negative Pledge Clauses

116

7.13.

Clauses Restricting Subsidiary Distributions

117

 

 

 

SECTION 8.

EVENTS OF DEFAULT

119

 

 

 

8.1.

Events of Default

119

 

 

 

SECTION 9.

THE AGENTS

121

 

 

 

9.1.

Appointment and Authority

121

9.2.

Rights as a Lender

122

9.3.

Exculpatory Provisions

122

9.4.

Reliance

123

9.5.

Delegation of Duties

124

9.6.

Resignation of Administrative Agent or Collateral Agent

124

9.7.

Non-Reliance on Administrative Agent, Collateral Agent and Other Lenders

125

9.8.

No Other Duties

126

9.9.

Administrative Agent May File Proofs of Claim

126

9.10.

Collateral and Guarantee Matters

126

9.11.

Additional Secured Parties

128

9.12.

Withholding Tax

128

9.13.

Certain ERISA Matters

129

 

 

 

SECTION 10.

MISCELLANEOUS

131

 

 

 

10.1.

Amendments and Waivers

131

10.2.

Notices

134

10.3.

No Waiver; Cumulative Remedies

137

10.4.

Survival of Representations and Warranties

137

10.5.

Payment of Expenses and Taxes; Indemnity

137

10.6.

Successors and Assigns; Participations and Assignments

140

10.7.

Sharing of Payments; Set-off

146

10.8.

Counterparts

146

10.9.

Severability

147

10.10.

Integration

147

10.11.

GOVERNING LAW

147

10.12.

Submission To Jurisdiction; Waivers

147

10.13.

Acknowledgments

148

10.14.

Intercreditor Agreements

149

 

iii



 

10.15.

Confidentiality

149

10.16.

WAIVERS OF JURY TRIAL

150

10.17.

Judgment Currency

151

10.18.

Patriot Act Notice

151

10.19.

Acknowledgment and Consent to Bail-In of EEA Financial Institutions

151

 

iv



 

SCHEDULES:

 

 

 

1.1

 

Commitments

4.15

 

Subsidiaries

4.19

 

UCC Filing Jurisdictions

7.1

 

Existing Indebtedness

7.2

 

Existing Liens

7.6

 

Existing Investments

7.8

 

Existing Affiliate Transactions

7.12

 

Clauses Restricting Negative Pledges

7.13

 

Clauses Restricting Subsidiary Distributions

 

 

 

EXHIBITS:

 

 

 

A

 

Form of Assignment and Assumption

B

 

Form of Borrowing Notice

C

 

Guarantee and Collateral Agreement

D-1

 

Form of Tax Status Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

D-2

 

Form of Tax Status Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

D-3

 

Form of Tax Status Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

D-4

 

Form of Tax Status Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

E

 

Form of Note

F-1

 

Form of Closing Certificate

F-2

 

Form of Compliance Certificate

G

 

Form of Interest Election Request

H

 

Form of Borrower Assignment and Assumption

I

 

Form of Perfection Certificate

 

v



 

CREDIT AGREEMENT dated as of August 18, 2017 among INNOVIVA, INC., a Delaware corporation (the “ Borrower ”), the several banks and other financial institutions or entities from time to time parties to this Agreement as “Lenders,” and MORGAN STANLEY SENIOR FUNDING, INC. (“ MSSF ”), as administrative agent (in such capacity, and together with its successors and assigns in such capacity, the “ Administrative Agent ”) and as collateral agent (in such capacity, and together with its successors and assigns in such capacity, the “ Collateral Agent ”).

 

WHEREAS, the Borrower intends to repay all outstanding amounts under the Borrower’s LABA PhaRMA SM  9.0% Fixed Rate Term Notes due 2029 (the “ 2029 Notes ”), terminate any commitments in respect of the 2029 Notes and terminate all guarantees and Liens in support of the 2029 Notes (collectively, the “ Refinancing ”).

 

WHEREAS, the Borrower has requested that the Lenders make available the Initial Term Commitments and the Initial Term Loans on the Effective Date, the proceeds of which will be used, together with cash on hand of the Borrower, to finance the Refinancing and to pay related fees and expenses.

 

WHEREAS, the Lenders are willing to make available the Initial Term Commitments and the Initial Term Loans for such purposes on the terms and subject to the conditions set forth in this Agreement.

 

NOW THEREFORE, in consideration of the premises and the agreements, provisions and covenants contained herein, the parties hereto hereby agree as follows:

 

SECTION 1.  DEFINITIONS

 

1.1.                             Defined Terms . As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

 

2023 Convertible Notes ”: the Borrower’s 2.125% Convertible Subordinated Notes due 2023.

 

2029 Notes ”: as defined in the recitals to this Agreement.

 

2025 Convertible Notes ”: the Borrower’s 2.50% Convertible Senior Notes due 2025.

 

ABR ”: a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the highest of (a) Prime Rate, (b) ½ of 1% per annum above the Federal Funds Effective Rate, (c) the LIBOR Rate for an Interest Period of one month plus 1.00% (or, if such day is not a Business Day, the immediately preceding Business Day) and (d) in the case of the Initial Term Loans, 2.00%.  If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, ABR shall be determined without regard to clause (b) of the preceding sentence until the circumstances giving rise to such inability no longer exist.  Any change in

 



 

ABR due to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBOR Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the LIBOR Rate, respectively.

 

ABR Loans ”: Term Loans the rate of interest applicable to which is based upon the ABR.

 

Accounting Change ”: as defined in Section 1.2(e).

 

Acquired Person ”: as defined in Section 7.1(i).

 

Additional Refinancing Lender ”: as defined in Section 2.6.

 

Administrative Agent ”: as defined in the preamble to this Agreement.

 

Administrative Questionnaire ”: an administrative questionnaire in a form supplied by the Administrative Agent.

 

Affected Lender ”: as defined in Section 3.13.

 

Affiliate ”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” of a Person means the possession, direct or indirect, of the power to direct or cause the direction of management or policies of a Person, whether through ownership of securities, by contract or otherwise; provided , however , that for purposes of Section 7.8, the term “Affiliate” shall also include (i) any person that directly or indirectly owns more than 20% of any class of Capital Stock of the person specified or (ii) any person that is an officer or director of the person specified.

 

Agent Fee Letter ”: the Agent Fee Letter dated July 31, 2017 between the Borrower and Morgan Stanley Senior Funding, Inc.

 

Agents ”: the collective reference to the Administrative Agent, the Collateral Agent, the Lead Arranger, the Joint Bookrunners and the Documentation Agent.

 

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

 

Anti-Corruption Laws ”: all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or that prohibit bribery or corruption, including without limitation the United States Foreign Corrupt Practices Act of 1977, as amended, and other similar legislation in any other jurisdictions.

 

Anti-Terrorism Laws ”: any laws relating to terrorism or money laundering, including Executive Order No. 13224, the Patriot Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by the United States Treasury Department’s Office of Foreign Assets Control (as any of the foregoing laws may from time to time be amended, renewed, extended, or replaced).

 

2



 

Applicable Margin ”: in the case of the Initial Term Loans, 4.50% per annum for LIBOR Rate Loans and 3.50% per annum for ABR Loans.

 

Approved Electronic Communications ”: collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed to any Agent or Lender by means of electronic communications pursuant to Section 10.2(b) or Section 10.2(d), including through the Platform.

 

Approved Fund ”: with respect to any Lender, any Person (other than a natural person) that is primarily engaged in making, purchasing, holding or otherwise investing in commercial loans, or similar extensions of credit in the ordinary course and is administered or managed by (a) such Lender, (b) an Affiliate of such Lender, or (c) an entity or an Affiliate of an entity that administers or manages such Lender.

 

Asset Sale ”: any Disposition of Property or series of related Dispositions of Property, including, without limitation, any issuance of Capital Stock of any Restricted Subsidiary of the Borrower to a Person other than to any Group Member (excluding in any case any such Disposition permitted by Section 7.4 other than Section 7.4(p), Section 7.4(r) and Section 7.4(t)) that yields gross proceeds to any Group Member (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $5,000,000.

 

Assignee ”: as defined in Section 10.6(b).

 

Assignment and Assumption ”: an assignment and assumption entered into by a Lender and an Eligible Assignee and accepted by the Administrative Agent, and, if applicable, the Borrower, substantially in the form of Exhibit A (or any other form approved by the Borrower and the Administrative Agent).

 

Assignment Effective Date ”: as defined in Section 10.6(d).

 

Available Amount ” at any time, an amount, to the extent Not Otherwise Applied, not less than zero in the aggregate, determined on a cumulative basis equal to, without duplication:

 

(a)                                  $25,000,000; plus

 

(b)                                  the aggregate amount of net cash proceeds of any capital contributions (that is converted or exchanged for Qualified Capital Stock) or issuances of Qualified Capital Stock (or for Qualified Capital Stock issued upon conversion of debt securities) received or made by the Borrower (other than Section 7.5(d)) after the Effective Date; plus

 

(c)                                   the Retained Excess Cash Flow Amount; plus

 

(d)                                  100% of the aggregate net cash proceeds and the fair market value (as reasonably determined by the Borrower) of marketable securities or other property

 

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contributed (without the payment, surrender or issuance of any value) to the Qualified Capital Stock of the Borrower after the Effective Date by any Person other than the Borrower or a Restricted Subsidiary; plus

 

(e)                                   the fair market value of all Qualified Capital Stock of the Borrower issued upon conversion or exchange of Indebtedness or Disqualified Capital Stock of the Borrower or any of its Restricted Subsidiaries incurred after the Effective Date; plus

 

(f)                                    the aggregate amount received by the Borrower or any Restricted Subsidiary after the Effective Date from cash (or Cash Equivalents) dividends and distributions made by any Unrestricted Subsidiary and returns of principal, cash repayments, interest and similar payments made by any Unrestricted Subsidiary in respect of Investments made by the Borrower or any Restricted Subsidiary to any Unrestricted Subsidiary (solely to the extent such Investments in such Unrestricted Subsidiary were made using the Available Amount), and the net cash proceeds received by the Borrower or any Restricted Subsidiary in connection with the sale, transfer or other disposition of assets or the Capital Stock of any Unrestricted Subsidiary to any Person other than the Borrower or a Restricted Subsidiary after the Effective Date (solely to the extent such Investments in such Unrestricted Subsidiary were made using the Available Amount); plus

 

(g)                                   in the event that the Borrower redesignates any Unrestricted Subsidiary as a Restricted Subsidiary after the Effective Date (which, for purposes hereof, shall be deemed to also include (A) the merger, consolidation, liquidation or similar amalgamation of any Unrestricted Subsidiary into the Borrower or any Restricted Subsidiary, so long as the Borrower or such Restricted Subsidiary is the surviving Person, and (B) the transfer of all or substantially all of the assets of an Unrestricted Subsidiary to the Borrower or any Restricted Subsidiary), the fair market value (as determined in good faith by the Borrower) of the Investment in such Unrestricted Subsidiary at the time of such redesignation, in each case solely to the extent such Investments in such Unrestricted Subsidiary were made using the Available Amount; plus

 

(h)                                  the aggregate amount of Retained Declined Proceeds; plus

 

(i)                                      to the extent not otherwise included, the aggregate amount of Returns to the Borrower or any Restricted Subsidiary in respect of Investments made pursuant to Section 7.6(t); minus

 

(j)                                     any usage of such Available Amount pursuant to Sections 7.5(g), 7.6(t) and 7.7(a)(iii).

 

Available Amount Condition ”: after giving effect to any usage of the Available Amount pursuant to Section 7.5(g) or Section 7.7(a)(iii), the Consolidated Leverage Ratio, on a pro forma basis, as of the last day of the period of four (4) fiscal quarters most recently completed for which financial statements have been delivered pursuant to Section 6.1 is less than or equal to 3.81:1.00.

 

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Bail-In Action ”: 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 ”: 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  which is described in the EU Bail-In Legislation Schedule.

 

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

 

Benefited Lender ”: as defined in Section 10.7(a).

 

Benefit Plan ”: any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

Blocked Person ”: as defined in Section 4.23(c).

 

Board ”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

Borrower ”: as defined in the preamble to this Agreement.

 

Borrower Assignment and Assumption ”: an assignment and assumption entered into by a Lender and the Borrower and accepted by the Administrative Agent, substantially in the form of Exhibit H (or any other form approved by the Borrower and the Administrative Agent).

 

Borrowing Date ”: any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Term Loans hereunder.

 

Business Day ”: (i) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close and (ii) with respect to all notices, determinations, fundings and payments in connection with the LIBOR Rate or any LIBOR Rate Loans, any day which is a Business Day described in clause (i)  and which is also a day for trading by and between banks in Dollar deposits in the London interbank market.

 

Capital Expenditures ”: for any period, with respect to any Person, the aggregate of all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets (including Capitalized Software Expenditures) or additions to equipment (including replacements, capitalized repairs and improvements during such period) that should be capitalized under GAAP on a consolidated balance sheet of such Person and its Subsidiaries, excluding (i) expenditures financed with any Reinvestment Deferred Amount to the extent otherwise not taken into account in determining Consolidated Net Income,

 

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(ii) any Permitted Acquisitions and any other Investments permitted hereunder, (iii) expenditures for leasehold improvements for which such Person is reimbursed in cash or receives a credit and (iv) expenditures to the extent they are made with the cash and Cash Equivalent proceeds of equity contributions (other than in respect of Disqualified Capital Stock) made to the Borrower after the Effective Date.

 

Capital Lease Obligations ”: as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP; provided , however , that all obligations of any Person that are or would have been treated as operating leases (including for avoidance of doubt, any network lease or any operating indefeasible right of use) for purposes of GAAP prior to the issuance by the Financial Accounting Standards Board on February 25, 2016 of an Accounting Standards Update (the “ ASU ”) shall, at the option of the Borrower, continue to be accounted for as operating leases for purposes of all financial definitions and calculations for purpose of this Agreement (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with the ASU (on a prospective or retroactive basis or otherwise) to be treated as Capital Lease Obligations in the financial statements to be delivered pursuant to Section 6.1.

 

Capital Stock ”: with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents, including membership interests (however designated, whether voting or nonvoting), of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited), if such Person is a limited liability company, membership interests, and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of property of, such partnership, whether outstanding on the date hereof or issued on or after the Effective Date, but excluding debt securities convertible or exchangeable into such equity interests.

 

Capitalized Software Expenditures ” shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by the Borrower and the Restricted Subsidiaries during such period in respect of licensed or purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of the Borrower and the Restricted Subsidiaries.

 

Cash Equivalents ”: as at any date of determination, any of the following: (a) securities (i) issued or directly and unconditionally guaranteed or insured as to interest and principal by the government of the United States of America or (ii) issued by any agency of the United States of America and the obligations of which are backed by the full faith and credit of the United States of America, in each case maturing within one year from the date of acquisition; (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case

 

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maturing within one year after the date of acquisition and having a rating of at least A-1 from S&P or at least P-1 from Moody’s; (c) certificates of deposit, time deposits, Eurodollar time deposits or overnight bank deposits having maturities of twelve months or less from the date of acquisition issued by any Lender, the Administrative Agent or any Joint Bookrunner or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that has (or whose parent company has) a rating of at least BBB+ from S&P or Baa1 from Moody’s; (d) commercial paper of an issuer rated at least A-2 by S&P or P-2 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within nine months from the date of acquisition; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A-2 by S&P or P-2 by Moody’s; (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (c)  of this definition; (g) Investments with average maturities of twelve (12) months or less from the date of acquisition in money market funds rated AAA (or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent thereof) or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another rating agency); (h) other short-term investments utilized by any Foreign Subsidiary in accordance with normal investment practices for cash management in investments of a type analogous to the foregoing; and (i) shares of money market, mutual or similar funds which (i) invest exclusively in assets satisfying the requirements of clauses (a) through (h) of this definition; (ii) has net assets of not less than $500,000,000 and (iii) has the highest rating obtainable from either S&P or Moody’s.

 

Cash Management Agreement ”: any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

 

CFC ”: any Subsidiary of the Borrower that is a “controlled foreign corporation” within the meaning of Section 957 of the Code and any Subsidiary of a CFC.

 

Change of Control ”: an event or series of events by which, at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such Person or its Subsidiaries and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a majority of the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis.  For the avoidance of doubt, the formation of a holding company to own the equity interests of the Borrower pursuant to a Permitted Reorganization Transaction shall not constitute a Change of Control, provided a Change of Control is not otherwise occurring.

 

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Code ”: the Internal Revenue Code of 1986, as amended from time to time (unless otherwise provided for within).

 

Collateral ”: all property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document.

 

Collateral Agent ”: as defined in the preamble to this Agreement.

 

Commitment ”: the Term Commitment of any Lender.

 

Commodity Exchange Act ”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from to time, and any successor statute.

 

Compliance Certificate ”: a certificate duly executed by a Responsible Officer substantially in the form of Exhibit F-2.

 

Confidential Information Memorandum ”: the Confidential Information Memorandum dated August 2017 and furnished to the Lenders in connection with the syndication of the Initial Term Loans.

 

Consolidated Current Assets ”: at any date, all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Borrower at such date.

 

Consolidated Current Liabilities ”: at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Borrower at such date, but excluding the current portion of any Funded Debt, the current portion of interest expense (other than interest expense that is due and unpaid) and the current portion of current and deferred Taxes based upon income or profits of the Loan Parties.

 

Consolidated EBITDA ”: for any period, for the Borrower and the Restricted Subsidiaries on a consolidated basis, without duplication, an amount equal to Consolidated Net Income for such period plus (a) the following, in each case (other than clause (xiv) below), to the extent deducted or excluded (and not added back) in calculating such Consolidated Net Income:

 

(i)                                      provisions for Taxes based on income or profits or capital, plus franchise or similar taxes and foreign withholding taxes;

 

(ii)                                   interest expense, amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Term Loans) for such period, including and together with (A) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances, (B) non-cash interest payments, (C) the interest component of Capital Lease Obligations, (D) net payments, if any, pursuant to interest Hedge Agreements with respect to Indebtedness, (E) amortization of deferred financing fees, debt issuance costs, commissions and fees, (F) the interest component of any pension or other post-employment benefit expense and (G) to the extent not reflected in such total

 

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interest expense, any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of interest income and gains on such hedging obligations, and costs of surety bonds in connection with financing activities (whether amortized or immediately expensed);

 

(iii)                                depreciation and amortization expense;

 

(iv)                               non-cash stock-based compensation expense for such period;

 

(v)                                  all extraordinary, unusual or nonrecurring cash expenses, charges and losses for such period;

 

(vi)                               non-cash purchase accounting adjustments;

 

(vii)                            costs and expenses incurred in connection with the Transaction;

 

(viii)                         any net loss from disposed or discontinued operations;

 

(ix)                               all costs and expenses incurred or paid in connection with Investments (including Permitted Acquisitions) whether or not such Investment is consummated;

 

(x)                                  the amount of any minority interest expense (or income (loss) allocable to noncontrolling interests) consisting of Subsidiary income attributable to minority equity interests of third parties in any non-wholly-owned Restricted Subsidiary of the Borrower;

 

(xi)                               all costs and expenses incurred in connection with the issuance, prepayment or amendment or refinancing of Indebtedness permitted hereunder or issuance of Capital Stock whether or not consummated;

 

(xii)                            other charges, expenses or losses reducing such Consolidated Net Income which do not represent a cash item in such period, including any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities or as a result of a change in law or regulation (but excluding any such charge which requires an accrual of, or a cash reserve for, anticipated cash charges in any future period);

 

(xiii)                         the aggregate net loss on the Disposition of property (other than accounts (as defined in the Uniform Commercial Code) and inventory) outside the ordinary course of business;

 

(xiv)                        the amount of cost savings, operating expense reductions and synergies related to acquisitions, Dispositions, other Specified Transactions, cost savings initiatives and other initiatives projected by the Borrower in good faith as a result of actions taken or committed to be taken (including pursuant to internal procedures) no later than twelve (12) months after such acquisition, Disposition, other Specified Transaction or identification of cost savings initiative or other initiative (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been

 

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realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (A) such cost savings and synergies are reasonably identifiable and factually supportable and (B) the benefits resulting therefrom are anticipated by the Borrower to be realized commencing not later than twelve (12) months of such actions having been taken, or having been committed to be taken;

 

(xv)                           any expenses, charges or losses that are covered by indemnification or other reimbursement provisions in connection with any Investment, Permitted Acquisition or any sale, conveyance, transfer or other disposition of assets permitted under this Agreement, to the extent actually reimbursed, or, so long as the Borrower has made a determination that a reasonable basis exists for indemnification or reimbursement and only to the extent that such amount (A) is not denied by the applicable carrier or indemnitor in writing within 180 days of the occurrence of such event and (B) is in fact indemnified or reimbursed within 365 days of such determination (with a subtraction in the applicable future period for any amount so added back to the extent not so indemnified or reimbursed within such 365-day period);

 

(xvi)                        to the extent covered by insurance and actually reimbursed, or, so long as the Borrower has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount (A) is not denied by the applicable carrier or indemnitor in writing within 180 days of the occurrence of such event and (B) is in fact reimbursed within 365 days of the date of such determination (with a subtraction in the applicable future period for any amount so added back to the extent not so reimbursed within such 365 days), expenses, charges or losses with respect to liability or casualty events or business interruption;

 

(xvii)                     cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing Consolidated EBITDA or Consolidated Net Income in any period to the extent non-cash gains relating to such income were deducted in the calculation of Consolidated EBITDA pursuant to paragraph (b) below for any previous period and not added back;

 

(xviii)                  expenses during such period in connection with Earn-Out Obligations and other deferred payments in connection with any acquisitions permitted under this Agreement, to the extent included in the calculation of Consolidated Net Income as an accounting adjustment to the extent that the actual amount payable or paid in respect of such Earn-Out Obligations or other deferred payments exceeds the liability booked by the applicable Person therefor; and

 

(xix)                        the amount of any (A) retention charges (including charges or expenses in respect of incentive plans) and recruiting, relocation and signing bonuses and expenses and (B) restructuring charges or reserves, integration costs, transition costs, start-up or initial costs for any project or new production line, division or new line of business or other business optimization expenses or reserves including, without limitation, costs or reserves associated with improvements to information technology and accounting functions, integration and facilities opening costs or any one-time costs;

 

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less (b) the following to the extent added in calculating such Consolidated Net Income of the Loan Parties:

 

(A)                                all interest income for such period,

 

(B)                                all Tax benefits for such period to the extent not netted in determining the amount for clause (a)(i) above,

 

(C)                                non-cash purchase accounting adjustments,

 

(D)                                (i) the aggregate net gain from the Disposition of property (other than accounts (as defined in the Uniform Commercial Code) and inventory) outside the ordinary course of business, (ii) any net gain from disposed or discontinued operations, (iii) all extraordinary, unusual or nonrecurring gains for such period, and (iv) all non-cash items increasing Consolidated Net Income which do not represent a cash item in such period or any future period (but excluding any such items (x) in respect of which cash was received in a prior period or will be received in a future period or (y) which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period),

 

(E)                                 the amount of minority interest income (or income (loss) allocable to noncontrolling interests) consisting of Subsidiary loss attributable to minority equity interests of third parties in any non-Wholly Owned Restricted Subsidiary of the Borrower, and

 

(F)                                  gains during such period in connection with Earn-Out Obligations and other deferred payments in connection with any acquisitions permitted under this Agreement, to the extent included in the calculation of Consolidated Net Income as an accounting adjustment to the extent that the actual amount payable or paid in respect of such Earn-Out Obligations or other deferred payments is less than the liability booked by the applicable Person therefor.

 

Notwithstanding anything to the contrary contained herein, for purposes of determining Consolidated EBITDA under this Agreement for any period that includes any of the fiscal quarters ended June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, Consolidated EBITDA for such fiscal quarters shall be $53,800,000, $35,400,000, $43,700,000 and $33,200,000, respectively, in each case as may be subject to addbacks and adjustments (without duplication) pursuant to clause (a)(xiv) above and Section 1.3 for the applicable test period.

 

Consolidated Funded Debt ”: at any date, the aggregate principal amount, without duplication, of all Indebtedness of the type described in clauses (a), (c), (e), (f) (to the extent of any unreimbursed drawings) and (g) of the definition of such term of the Loan Parties and Guarantee Obligations of the Loan Parties in respect of such types of Indebtedness at such date, determined on a consolidated basis in accordance with GAAP.

 

Consolidated Leverage Ratio ”: at any date, the ratio of (a) Consolidated Funded Debt as of such date minus the aggregate amount of unrestricted cash and Cash Equivalents not

 

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to exceed $75,000,000 included in the consolidated balance sheet of the Borrower and the Restricted Subsidiaries as of such date to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on such date.

 

Consolidated Net Income ”: for any period, the consolidated net income (or loss) of the Borrower and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded, without duplication:

 

(a) the undistributed earnings of any Restricted Subsidiary that is not a Guarantor to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document), its Organizational Documents or Requirement of Law applicable to such Restricted Subsidiary;

 

(b) the income (or loss) of any Person accrued prior to the date it becomes a Restricted Subsidiary or is designated a Restricted Subsidiary, as applicable, or is merged into or consolidated with the Borrower or any Restricted Subsidiary or that Person’s assets are acquired by the Borrower or any Restricted Subsidiary (except to the extent required for any calculation of Consolidated EBITDA on a pro forma basis in accordance with the terms hereof);

 

(c) the income (or loss) of any Person that is not a Subsidiary of the Borrower, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting; provided that Consolidated Net Income shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash or Cash Equivalents (or to the extent subsequently converted into cash or Cash Equivalents) to the Borrower or any Restricted Subsidiary by such Person in such period;

 

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

 

(e) the effects of adjustments (including the effects of such adjustments pushed down to the Borrower and its Restricted Subsidiaries) in the Borrower’s consolidated financial statements pursuant to GAAP (including in the inventory (including any impact of changes to inventory valuation policy methods, including changes in capitalization of variances), property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in relation to any Permitted Acquisition or joint venture investment or the amortization or write-off or write-down of any amounts thereof, net of taxes;

 

(f) any after-tax effect of income (loss) from the early extinguishment of (i) Indebtedness, (ii) obligations under any Hedge Agreements or (iii) other derivative instruments;

 

(g) (i) any net unrealized gain or loss (after any offset) resulting in such period from obligations under any Hedge Agreements and the application of Statement of Financial Accounting Standards No. 133; and (ii) any net unrealized gain or loss (after any offset) resulting in such period from currency translation gains or losses including those (x) related to currency

 

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remeasurements of Indebtedness and (y) resulting from Hedge Agreements for currency exchange risk.

 

In addition, Consolidated Net Income shall include the amount of any cash payments received in any period with respect to royalties and other assets that may be classified as financial assets and that would not otherwise be included in Consolidated Net Income.

 

Consolidated Working Capital ”: at any date, the excess of Consolidated Current Assets on such date over Consolidated Current Liabilities on such date; provided that, for purposes of calculating any change in Consolidated Working Capital, (x) changes in balance sheet classification (i.e., long-term to short-term and non-cash adjustments resulting from application of the business combination/acquisition accounting rules) during any fiscal period, due to timing, shall be adjusted to eliminate any distortions and (y) acquisitions occurring during any fiscal period shall be disregarded or shall be deemed to have occurred on the first day of such period).

 

Contractual Obligation ”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

Control Agreement ”: shall have the meaning assigned to such term in the Guarantee and Collateral Agreement.

 

Convertible Indebtedness ”: Indebtedness of the Borrower outstanding as of the Effective Date or otherwise permitted to be incurred under the terms of this Agreement that is either (a) convertible into common stock or other Qualified Capital Stock  of the Borrower or a parent company of the Borrower (and cash in lieu of fractional shares), cash or any combination of such common stock or Qualified Capital Stock and cash (in an amount determined by reference to the price of such common stock or other Qualified Capital Stock) or (b) sold as units with call options, warrants, forwards or other rights to purchase (or substantially equivalent derivative transactions) that are exercisable for common stock or other Qualified Capital Stock  of the Borrower or parent company of the Borrower  and/or cash (in an amount determined by reference to the price of such common stock).

 

Corporate Family Rating ”: an opinion issued by Moody’s of a corporate family’s ability to honor all of its financial obligations that is assigned to a corporate family as if it had a single class of debt and a single consolidated legal entity structure.

 

Corporate Rating ”: an opinion issued by S&P of an obligor’s overall financial capacity (its creditworthiness) to pay its financial obligations.

 

Credit Agreement Refinanced Debt ”:  as defined in the definition of Credit Agreement Refinancing Indebtedness.

 

Credit Agreement Refinancing Indebtedness ”:  (a) Other Term Loans obtained pursuant to a Refinancing Amendment, (b) Permitted First Priority Replacement Debt, (c) Permitted Junior Priority Replacement Debt and/or (d) Permitted Unsecured Replacement Debt, in each case, issued, incurred or obtained (including by means of the extension or renewal of

 

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existing Indebtedness) in exchange for, or to extend, renew, replace, restructure or refinance, in whole or in part, any or all Tranches of then existing Term Loans (in each case including any successive Credit Agreement Refinancing Indebtedness) (the “ Credit Agreement Refinanced Debt ”); provided that (v) such Credit Agreement Refinancing Indebtedness is in an original aggregate principal amount not greater than the aggregate principal amount of the Credit Agreement Refinanced Debt, plus premiums and accrued and unpaid interest, fees and expenses in respect thereof plus other costs, fees and expenses (including upfront fees and original issue discount) incurred in connection with such Credit Agreement Refinancing Indebtedness, (w) such Credit Agreement Refinancing Indebtedness does not mature prior to the maturity date of, and has a Weighted Average Life to Maturity equal to or longer than the Weighted Average Life to Maturity at such time of, the corresponding Tranche of Credit Agreement Refinanced Debt (without giving effect to nominal amortization for periods where amortization has been eliminated as a result of a prepayment of the applicable Credit Agreement Refinanced Debt) (or, if such Credit Agreement Refinancing Indebtedness is unsecured or is subordinated in right of payment to the Obligations, such Credit Agreement Refinancing Indebtedness does not mature or have any amortization prior to the then Latest Maturity Date at the time of issuance or incurrence of such Credit Agreement Refinancing Indebtedness and shall have no greater mandatory prepayments than such Credit Agreement Refinanced Debt (other than (1) asset sale or similar event provisions that provide for the prior repayment in full of the Term Loans, (2) change of control provisions that provide for the prior repayment in full of the Term Loans, (3) maturity payments and customary mandatory prepayments for customary bridge financings that, subject to customary conditions, provide for automatic conversion or exchange into Indebtedness that otherwise complies with the requirements of this definition, (4) AHYDO payments and (5), with respect to convertible notes and bonds, fundamental change offers and pursuant to settlements upon conversion)), (x) such Credit Agreement Refinancing Indebtedness shall not be incurred or guaranteed by any Restricted Subsidiary that did not incur or guarantee such Credit Agreement Refinanced Debt, (y) such Credit Agreement Refinanced Debt shall be repaid, defeased or satisfied and discharged, and all accrued and unpaid interest, fees then due and premiums (if any) in connection therewith shall be paid substantially contemporaneously with, and to the extent of the incurrence of the Credit Agreement Refinancing Indebtedness, and (z) such Credit Agreement Refinancing Indebtedness shall have other terms and conditions (excluding pricing, fees, rate floors and optional prepayment or redemption terms and any provisions customary for convertible notes and bonds) substantially identical to, or (taken as a whole) no more favorable (as reasonably determined by the Borrower) to the lenders or holders providing such Credit Agreement Refinancing Indebtedness than, those applicable to the Credit Agreement Refinanced Debt (except to the extent (1) such terms are conformed (or added) in this Agreement for the benefit of the Lenders hereunder pursuant to an amendment hereto subject solely to the reasonable satisfaction of the Administrative Agent (it being understood that to the extent that any financial maintenance covenant is added for the benefit of any Credit Agreement Refinancing Indebtedness, no consent shall be required from the Administrative Agent to the extent that such financial maintenance covenant is also added for the benefit of the Lenders hereunder) or (2) applicable solely to periods after the Latest Maturity Date).  For the avoidance of doubt, Credit Agreement Refinancing Indebtedness consisting of Other Term Loans shall be subject to the requirements set forth in Section 2.6 and all accrued fees in connection therewith shall be paid substantially contemporaneously with the incurrence of the Credit Agreement Refinancing Indebtedness.

 

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Debtor Relief Laws ” shall mean the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws of the United States of America or other applicable jurisdictions from time to time in effect.

 

Default ”: any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

Defaulting Lender ”: any Lender that (a) has failed to (i) fund all or any portion of its Term Loans within two Business Days of the date such Term Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Borrower and the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Term Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender 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 permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Borrower and each Lender.  If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will cease to be a Defaulting Lender; provided that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender

 

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to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

Designated Non-Cash Consideration ”: means the fair market value of non-cash consideration received by a Group Member in connection with a Disposition pursuant to Section 7.4(r) that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower, setting forth the basis of such valuation (which amount will be reduced by the fair market value of the portion of the non-cash consideration converted to cash within 180 days following the consummation of the applicable Disposition).

 

Disposition ”: with respect to any Property, any sale, lease, exclusive license, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms “ Dispose ” and “ Disposed of ” shall have correlative meanings.

 

Disqualified Capital Stock ”: any Capital Stock that is not Qualified Capital Stock.  For the avoidance of doubt, the Existing Convertible Notes shall not constitute Disqualified Capital Stock.

 

Disqualified Institution ”: (i) any competitors of the Borrower or of GlaxoSmithKline plc that are each identified in writing by the Borrower to the Administrative Agent prior to the Effective Date and that are in the same or a similar line of business as the Borrower or GlaxoSmithKline plc, together with any affiliates (in each case other than a bona fide debt fund or an investment vehicle that is primarily engaged in the marketing, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course) that are readily identifiable as such on the basis of their name, (ii) any persons that are engaged as principals primarily in private equity or venture capital and certain banks, financial institutions, other institutional lenders and investors and other entities, including “activist” funds and royalty funds, in each case designated in writing by the Borrower to the Administrative Agent prior to the Effective Date and (iii) solely with respect to any competitor of the Borrower or of GlaxoSmithKline plc, following the Effective Date that are identified in writing by the Borrower with the consent of the Administrative Agent, such consent not to be unreasonably withheld or delayed; provided that the foregoing shall not apply retroactively to disqualify any parties that have previously acquired an assignment or participation interest in any Term Loans to the extent such party was not a Disqualified Institution at the time of the applicable assignment or participation, as the case may be.

 

Documentation Agent ”: Bank of America, N.A., in its capacity as documentation agent under this Agreement.

 

Dollars ” and “ $ ”: dollars in lawful currency of the United States.

 

Domestic Subsidiary ”: any Subsidiary that is a “United States Person,” as defined in the Code, other than a CFC or a FSHCO.

 

Earn-Out Obligations ”: those certain unsecured obligations of the Borrower or any Subsidiary arising in connection with any acquisition of assets or businesses permitted under Section 7.6 to the seller of such assets or businesses and the payment of which is dependent on

 

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the future earnings or performance of such assets or businesses and contained in the agreement relating to such acquisition or in an employment agreement delivered in connection therewith.

 

ECF Percentage ”: 25%; provided that, with respect to each fiscal year of the Borrower commencing with the fiscal year ending December 31, 2018, the ECF Percentage shall be (a) 50% if the First Lien Secured Leverage Ratio as of the last day of such fiscal year is greater than 1.55:1.00 and (b) 0% if the First Lien Secured Leverage Ratio as of the last day of such fiscal year is less than 0.55:1.00.

 

EEA Financial Institution ”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA  Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution  established in an EEA Member Country which 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 ”: any of the member states of the European Union, Iceland, Liechtenstein and Norway.

 

EEA Resolution Authority ”: 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.

 

Effective Date ”: August 18, 2017.

 

Eligible Assignee ”: any Assignee permitted by and consented to in accordance with Section 10.6(b); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include a Disqualified Institution.

 

Engagement Letter ”: the Engagement Letter dated July 31, 2017 among the Borrower, Morgan Stanley Senior Funding, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

Environmental Laws ”: any and all laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or other legally binding requirements (including, without limitation, principles of common law) of any Governmental Authority, regulating, relating to or imposing liability or standards of conduct concerning pollution, the preservation or protection of the environment, natural resources or, as pertains to exposure to Materials of Environmental Concern, health and safety, or the generation, manufacture, use, labeling, treatment, storage, handling, transportation or release of, or exposure to, Materials of Environmental Concern, as has been, is now, or may at any time hereafter be, in effect.

 

Environmental Liability ”: any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties, attorney or consultant fees or indemnities) resulting from or based upon (a) non-compliance with any Environmental Law or any Environmental Permit, (b) exposure to any Materials of Environmental Concern, (c) Release or threatened Release of any Materials of Environmental Concern, (d) any investigation, remediation, removal, clean-up or monitoring required under Environmental Laws or required by

 

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a Governmental Authority (including without limitation Governmental Authority oversight costs that the party conducting the investigation, remediation, removal, clean-up or monitoring is required to reimburse) or (e) any contract, agreement or other consensual arrangement to the extent that liability is assumed or imposed with respect to any of the foregoing.

 

Environmental Permits ”: any and all Governmental Authorizations required under any Environmental Law.

 

ERISA ”: the Employee Retirement Income Security Act of 1974, as amended from time to time, the regulations promulgated thereunder and any successor thereto.

 

ERISA Affiliate ”: any trade or business (whether or not incorporated) that, together with any Group Member, is treated as a single employer under Section 414(b) or (c) of the Code, or solely for purposes of Section 302 or 303 of ERISA or Section 412 or 430 of the Code, is treated as a single employer under Section 414 of the Code.  Any former ERISA Affiliate of the Group Members shall continue to be considered an ERISA Affiliate of the Group Members within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of any Group Member and with respect to liabilities arising after such period for which any Group Member would be liable under the Code or ERISA.

 

ERISA Event ”: (a) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Single Employer Plan (excluding those for which the provision for 30 day notice to the PBGC has been waived by PBGC regulation in effect on the date hereof); (b) the failure to meet the minimum funding standard of Sections 412 or 430 of the Code or Sections 302 or 303 of ERISA with respect to any Single Employer Plan, 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 Single Employer Plan; (d) the termination of any Single Employer Plan or the withdrawal or partial withdrawal of any Group Member from any Single Employer Plan or Multiemployer Plan, in each case which would reasonably be expected to result in a material liability to any Group Member; (e) a determination that any Single Employer Plan is, or is expected to be, in “at risk” status (as defined in Section 430 of the Code or Section 303 of ERISA); (f) a determination that any Multiemployer Plan is, or is expected to be, in “critical” or “endangered” status under Section 432 of the Code or Section 305 of ERISA; (g) the receipt by any Group Member or any of their respective ERISA Affiliates from the PBGC or a plan administrator of any notice relating to an intention to terminate any Single Employer Plan or to appoint a trustee to administer any Single Employer Plan; (h) the adoption of any amendment to a Single Employer Plan that would require the provision of security pursuant to Section 436(f) of the Code; (i) the receipt by any Group Member or any of their respective ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from any Group Member or any of their respective ERISA Affiliates of any notice, concerning the imposition 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; (j) the failure by any Group Member or any of their respective ERISA Affiliates to make a required contribution to a Multiemployer Plan; (k) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which would reasonably be expected to result in material liability to any Group Member; (l) the receipt from the IRS of notice of disqualification of any Plan intended to qualify

 

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under Section 401(a) of the Code, or the disqualification of any trust forming part of any Plan intended to qualify for exemption from taxation under Section 501(a) of the Code; (m) the imposition of a lien pursuant to Section 430(k) of the Code or Section 303(k) of ERISA or a violation of Section 436 of the Code with respect to any Single Employer Plan; (n) the assertion of a material claim (other than routine claims for benefits) against any Plan other than a Multiemployer Plan or the assets thereof, or against any Group Member or any of their respective ERISA Affiliates in connection with any Plan; or (o) the occurrence of an act or omission which would reasonably be expected to give rise to the imposition on any Group Member or any of their respective ERISA Affiliates of any  fine, penalty, tax or related charge under Chapter 43 of the Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Plan.

 

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

 

Event of Default ”: any of the events specified in Section 8; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

Excess Cash Flow ”: for the fiscal quarters of the Borrower ending on September 30, 2017 and December 31, 2017, or any fiscal year of the Borrower ending after December 31, 2017 (each such fiscal quarter or fiscal year, a “fiscal period”), the excess, if any, of:

 

(a)                                  the sum, without duplication, of:

 

(i)                                      Consolidated Net Income for such fiscal period;

 

(ii)                                   the amount of all non-cash charges (including depreciation and amortization) deducted in arriving at such Consolidated Net Income (excluding any such non-cash charge to the extent that it represents an accrual or reserve for a potential cash charge in any future fiscal period or amortization of a prepaid cash gain that was paid in a prior fiscal period);

 

(iii)                                decreases in Consolidated Working Capital for such fiscal period;

 

(iv)                               the aggregate net amount of non-cash loss on the Disposition of Property by the Borrower and the Restricted Subsidiaries during such fiscal period (other than sales of inventory in the ordinary course of business), to the extent deducted in arriving at such Consolidated Net Income; and

 

(v)                                  expenses deducted from Consolidated Net Income during such fiscal period in respect of expenditures made during any prior fiscal period for which a deduction from Excess Cash Flow was made in such prior fiscal period pursuant to clause (b)(viii), (ix) or (xiii) below, minus

 

(b)                                  the sum, without duplication, of:

 

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(i)                                      the amount of all non-cash credits included in arriving at such Consolidated Net Income;

 

(ii)                                   the aggregate amount actually paid by the Borrower and the Restricted Subsidiaries in cash during such fiscal period on account of Capital Expenditures, acquisitions, permitted Investments (including Permitted Acquisitions) and Earn-Out Obligations, in each case from Internally Generated Cash;

 

(iii)                                the aggregate amount of all principal payments of Indebtedness (including the Term Loans (but other than mandatory prepayments made under Section 3.2(c) and the Voluntary Prepaid Amount (as defined in Section 3.2(c))), but excluding payments in respect of any revolving credit facility unless there is an equivalent permanent reduction in commitments thereunder) of the Borrower and the Restricted Subsidiaries made during such fiscal period from Internally Generated Cash;

 

(iv)                               increases in Consolidated Working Capital for such fiscal period;

 

(v)                                  the aggregate net amount of non-cash gain on the Disposition of Property by the Borrower and the Restricted Subsidiaries during such fiscal period (other than sales of inventory in the ordinary course of business) to the extent included in arriving at such Consolidated Net Income;

 

(vi)                               cash payments by the Borrower and the Restricted Subsidiaries during such period in respect of long-term liabilities of the Borrower and the Restricted Subsidiaries (other than Indebtedness) from Internally Generated Cash;

 

(vii)                            Restricted Payments made in cash from Internally Generated Cash (other than to the Borrower or a Restricted Subsidiary);

 

(viii)                         the amount of cash Taxes actually paid in such fiscal period to the extent they exceed the amount of Tax expense deducted in determining Consolidated Net Income for such fiscal period;

 

(ix)                               fees, expenses or charges paid in cash related to any acquisitions or permitted Investments (including Permitted Acquisitions), the issuance, payment, amendment or refinancing of Indebtedness permitted under Section 7.1 hereof and the issuance of Capital Stock and Dispositions permitted under Section 7.4 hereof, including, in each case, any such transaction undertaken but not completed, to the extent not deducted in arriving at such Consolidated Net Income;

 

(x)                                  any premium paid in cash during such period in connection with the prepayment, redemption, purchase, defeasance or other satisfaction prior to scheduled maturity of Indebtedness permitted to be prepaid, redeemed, purchased, defeased or satisfied hereunder;

 

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(xi)                               without duplication of amounts deducted in prior fiscal periods (A) the aggregate consideration required to be paid in cash by a Group Member pursuant to binding contracts (the “ Contract Consideration ”) entered into prior to or during such fiscal period relating to acquisitions or permitted Investments (including Permitted Acquisitions) or (B) any planned cash expenditures by the Borrower or any of the Restricted Subsidiaries relating to Capital Expenditures or acquisitions of intellectual property (the “ Planned Expenditures ”), in each case to be consummated or made during the fiscal period of the Borrower following the end of such fiscal period; provided that, to the extent the aggregate amount of Internally Generated Cash actually utilized to finance such acquisitions, Investments, Capital Expenditures or acquisitions of intellectual property during such fiscal period is less than the Contract Consideration and the Planned Expenditures, as applicable, the amount of such shortfall shall be added to the calculation of Excess Cash Flow at the end of such fiscal period;

 

(xii)                            any payment of cash to be amortized or expensed over a future period and recorded as a long term asset (it being understood that the amortization or expense of such payment shall not reduce Excess Cash Flow in any future fiscal period); and

 

(xiii)                         cash expenditures in respect of Hedge Agreements to the extent not deducted in arriving at such Consolidated Net Income.

 

Excess Cash Flow Application Date ”: as defined in Section 3.2(c).

 

Excess Cash Flow Payment Period ”: with respect to the prepayment required on each Excess Cash Flow Application Date, the immediately preceding fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2018.

 

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

 

Excluded Assets ”: (a) any fee owned Real Property (other than Material Owned Real Property) and any leasehold rights and interests in Real Property (it being understood that there shall be no requirement to obtain any landlord or other third party waivers, estoppels or collateral access letters), (b) commercial tort claims where the amount of damages claimed by the applicable Loan Party in its reasonable determination is less than $2,500,000, (c) governmental licenses, state or local franchises, charters and authorizations and any other property and assets to the extent that the Administrative Agent may not validly possess a security interest therein under applicable Requirements of Law (including, without limitation, rules and regulations of any Governmental Authority or agency) or the pledge or creation of a security interest in which would require governmental consent, approval, license or authorization that has not been obtained, other than to the extent such prohibition or limitation on possessing a security interest therein is rendered ineffective under the UCC or other applicable Requirements of Law notwithstanding such prohibition or limitation, (d) (i) any lease, license, permit or agreement to the extent that a grant of a security interest therein is prohibited by applicable Requirements of Law other than to the extent such prohibition is rendered ineffective under the UCC or other applicable Requirements of Law notwithstanding such prohibition or (ii) any lease, license,

 

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permit or agreement or any property subject to a purchase money security interest or any property governed by any such lease in respect of a Capital Lease Obligation or similar arrangement to which a Loan Party is a party to the extent and for so long as it would violate or invalidate the terms thereof or of such purchase money arrangement or of such lease in respect of such Capital Lease Obligation or such similar arrangement (in each case, after giving effect to the relevant provisions of the UCC or other applicable Requirements of Law) or would give rise to a termination right of an unaffiliated third party thereunder or under such purchase money arrangement or such lease in respect of such Capital Lease Obligation or such similar arrangement or require consent of an unaffiliated third party thereunder or under such purchase money arrangement or such lease in respect of such Capital Lease Obligation or such similar arrangement (except to the extent such provision is overridden by the UCC or other Requirements of Law), (e) (i) Margin Stock, (ii) Capital Stock in any Person other than Wholly Owned Restricted Subsidiaries that cannot be pledged without the consent of unaffiliated third parties, (iii) the Capital Stock of TRC, to the extent TRC remains a non-Wholly Owned Subsidiary and (iv) voting Capital Stock in any CFC or FSHCO representing in excess of 65% of the total combined voting power of all classes of voting Capital Stock in such CFC or FSHCO, (f) any property or assets to the extent the creation or perfection of pledges thereof, or security interests therein, could reasonably be expected to result in material adverse tax consequences to the Borrower or any of its Subsidiaries, as reasonably determined by the Borrower, (g) any intent-to-use trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto and acceptance thereof by the United States Patent and Trademark Office, to the extent, if any, that, and solely during the period, if any, in which the grant of a security interest therein would impair the validity or enforceability of or void such intent-to-use trademark application or any registration that may issue therefrom under applicable federal law, (h) particular assets if and for so long as, if reasonably agreed by the Administrative Agent and the Borrower, the cost of creating a pledge or security interest in such assets exceed the practical benefits to be obtained by the Secured Parties therefrom, (i) any acquired property (including property acquired through acquisition or merger of or amalgamation with another entity) if at the time of such acquisition the granting of a security interest therein or the pledge thereof is prohibited by any contract or other agreement (in each case, not created in contemplation thereof) to the extent and for so long as such contract or other agreement prohibits such security interest or pledge other than to the extent such prohibition on possessing a security interest or pledge therein is rendered ineffective under the UCC or other applicable Requirements of Law notwithstanding such prohibition or limitation, (j) any assets located outside the United States to the extent that such assets require action under the law of any non-U.S. jurisdiction to create or perfect a security interest in such assets under such non-U.S. jurisdiction, including any intellectual property registered in any non-U.S. jurisdiction, (k) (A) payroll, healthcare and other employee wage and benefit accounts, (B) tax accounts, including, without limitation, sales tax accounts, (C) escrow, defeasance and redemption accounts, (D) fiduciary or trust accounts, (E) zero balance accounts and (F) accounts which, individually, maintain an average daily balance of less than $1,000,000 and, in the case of clauses (A) through (F), the funds or other property held in or maintained in any such account and (l) cash permitted to be pledged pursuant to Section 7.2(gg), to the extent such cash is pledged; provided that Excluded Assets shall not include any proceeds, substitutions or replacements of any Excluded Assets referred to in clauses (a) through (l) (unless such proceeds, replacements or substitutions would independently constitute Excluded Assets referred to in clauses (a) through (l)).

 

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Excluded Indebtedness ”: all Indebtedness permitted by Section 7.1.

 

Excluded Perfection Assets ”: (a) motor vehicles and other assets subject to certificates of title (in each case to the extent not constituting inventory), (b) letter of credit rights, except to the extent constituting support obligations for other Collateral as to which perfection of the security interest in such other Collateral is accomplished solely by the filing of a UCC financing statement (it being understood that no actions shall be required to perfect a security interest in letter of credit rights other than the filing of a UCC financing statement) and (c) particular assets if and for so long as, if reasonably agreed by the Administrative Agent and the Borrower, the cost of perfecting a pledge or security interest in such assets exceed the practical benefits to be obtained by the Secured Parties therefrom.

 

Excluded Subsidiary ”: (a) any Subsidiary that is not a Wholly Owned Subsidiary of the Borrower or a Subsidiary Guarantor (it being understood, for the avoidance of doubt, that TRC is not a Wholly Owned Subsidiary of the Borrower as of the Effective Date), (b) any CFC, (c) any FSHCO, (d) any direct or indirect subsidiary of a CFC or a FSHCO, (e) any Unrestricted Subsidiary, (f) any Immaterial Subsidiary, (g) any Subsidiary with respect to which, in the reasonable judgment of the Borrower and the Administrative Agent, the burden or cost of such entity providing a guarantee or pledging assets to secure the Obligations shall be excessive in view of the benefits to be obtained by the Secured Parties therefrom and (h) any special purpose Subsidiary that is designated as an Excluded Subsidiary by the Borrower that incurs Indebtedness permitted hereunder for the purpose of financing (or refinancing previously incurred Indebtedness that financed) Permitted Acquisitions, for so long as such Subsidiary is a special purpose Subsidiary (as determined by the Borrower); provided that any such Indebtedness shall be non-recourse to the Loan Parties and the Loan Parties shall not provide any guarantees or Liens in support of such Indebtedness (it being understood, for the avoidance of doubt, that LABA Royalty Sub, LLC, a Delaware limited liability company, is hereby designated by the Borrower as such a special purpose Subsidiary as of the Effective Date).

 

Excluded Swap Obligation ”: with respect to any Guarantor, any Swap  Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor, or the grant by such Guarantor of a security interest to secure, as applicable, such Swap  Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange  Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the  application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity  Exchange Act and the regulations thereunder at the time the Guarantee of such Guarantor, or the grant of such security interest, as applicable, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one  swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

 

Excluded Taxes ”: with respect to any Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of any Loan Party under any Loan Document, (a) Taxes imposed on or measured by its net income or net profits (however denominated), franchise Taxes and branch profits (or similar) Taxes imposed on it, in each case, by any jurisdiction (or any political subdivision thereof) (i) as a result of the recipient being

 

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organized or having its principal office or, in the case of any Lender, its applicable lending office in such jurisdiction, or (ii) as a result of any other present or former connection between such recipient and such jurisdiction (other than a connection arising primarily as a result of the execution, delivery, or performance by the recipient of its obligations under the Loan Documents, receipt of payments under, perfection of a security interest under or engagement in any transaction pursuant to the Loan Documents or enforcement of rights under the Loan Documents, or sale or assignment of an interest in any Loan or Loan Document), (b) any U.S. federal withholding Tax that (i) is imposed on amounts payable to a Lender under any laws in effect at the time such Lender becomes a party hereto, other than pursuant to an assignment request by the Borrower under Section 3.13 (or designates a new lending office, other than pursuant to a request by the Borrower under Section 3.12), except to the extent that, in the case where a Lender designated a new lending office, such Lender, or in the case of an assignment, the assignor, was entitled, immediately prior to the time of designation of a new lending office or assignment as the case may be, to receive amounts from the Borrower with respect to such Tax pursuant to Section 3.10; or (ii) is attributable to such Lender’s failure to comply with Sections 3.10(e) and (f) and (c) any United States federal withholding Tax that is imposed pursuant to FATCA.

 

Executive Order No. 13224 ”: Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same as been, or shall hereafter be, renewed, extended, amended or replaced.

 

Existing Convertible Notes ”: the 2023 Convertible Notes and the 2025 Convertible Notes, collectively.

 

Extension ”: as defined in Section 3.16.

 

Extension Amendment ”: as defined in Section 3.16.

 

Extension Offer ”: as defined in Section 3.16.

 

Extension Term Loan ”: as defined in Section 3.16.

 

FATCA ”: current 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 Treasury regulations or other official administrative guidance (including any Revenue Ruling, Revenue Procedure, Notice or similar guidance issued by the IRS) promulgated thereunder, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreement between a non-U.S. jurisdiction and the United States with respect to the foregoing and any law or regulation adopted pursuant to any such intergovernmental agreement.

 

Federal Funds Effective Rate ”: for any day, the rate per annum equal to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent from three (3) federal funds brokers of recognized standing selected by it.

 

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FEMA ”: the Federal Emergency Management Agency, a component of the U.S. Department of Homeland Security that administers the National Flood Insurance Program.

 

First Lien Secured Leverage Ratio ”: at any date, the ratio of (a) Consolidated Funded Debt secured by a first priority Lien on all or any portion of the Collateral or any other assets of any of the Loan Parties as of such date minus the aggregate amount of unrestricted cash and Cash Equivalents not to exceed $75,000,000 included in the consolidated balance sheet of the Borrower and the Restricted Subsidiaries as of such date to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on such date.

 

Flood Insurance Laws ”: collectively, (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto and (iv) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto.

 

Foreign Lender ”: any Lender that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code.

 

Foreign Proceeds ”: as defined in Section 3.2(g).

 

Foreign Subsidiary ”: any Subsidiary of the Borrower that is not a Domestic Subsidiary.

 

Foreign Subsidiary Excess Cash Flow ”: as defined in Section 3.2(g).

 

FSHCO ”: any Subsidiary that owns (directly or indirectly) no material assets other than Capital Stock (or Capital Stock and debt interests) of one or more CFCs.

 

Funded Debt ”: as to any Person, without duplication, (1) all Indebtedness of the type described in clauses (a), (c), (e), (f) (to the extent of any unreimbursed drawings thereunder) and (h), (2) Indebtedness of the type described in clause (g) of the definition of such term of such Person that matures more than one (1) year from the date of its creation or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including all current maturities and current sinking fund payments in respect of such Indebtedness whether or not required to be paid within one year from the date of its creation and (3) in the case of the Borrower, Indebtedness in respect of the Term Loans.

 

Funding Office ”: the office of the Administrative Agent specified in Section 10.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

 

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GAAP ”: generally accepted accounting principles in the United States as in effect from time to time subject to Section 1.2(e).

 

Governmental Authority ”: any nation or government, any state or other political subdivision thereof, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government (including any supranational bodies such as the European Union or the European Central Bank) and any securities exchange.

 

Governmental Authorization ”: any permit, license, authorization, certification, registration, approval, clearance, directive, consent order or consent decree of or from any Governmental Authority necessary in connection with any Group Member’s business.

 

Group Members ”: the collective reference to the Borrower and the Restricted Subsidiaries.

 

Guarantee and Collateral Agreement ”: the Guarantee and Collateral Agreement dated as of the Effective Date among the Loan Parties, the Administrative Agent and the Collateral Agent, in the form of Exhibit C.

 

Guarantee Obligation ”: as to any Person (the “ guaranteeing person ”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “ primary obligations ”) of any other third Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to hold harmless the owner of any such primary obligation against loss in respect thereof; provided , however , that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

 

Guarantors ”: collectively, the Subsidiary Guarantors.

 

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Hedge Agreements ”: any agreement with respect to any cap, floor, swap, forward, option, future or other derivative transaction or any combination of such transactions or any 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 Borrower or the Subsidiaries shall be a Hedge Agreement.

 

Immaterial Subsidiary ”: any Subsidiary now existing or hereafter acquired or formed and each successor thereto, (a) which accounts for not more than (i) 5% of the consolidated net revenues (after intercompany eliminations) of the Borrower and the Restricted Subsidiaries and (ii) 5% of the consolidated assets (after intercompany eliminations) of the Borrower and the Restricted Subsidiaries, in each case, as of the last day of the most recently completed fiscal quarter as reflected on the financial statements for such quarter, and (b) if the Subsidiaries that constitute Immaterial Subsidiaries pursuant to clause (a) above account for, in the aggregate, more than (i) 10% of such consolidated net revenues (after intercompany eliminations) and (ii) 10% of the consolidated assets (after intercompany eliminations), each as described in clause (b) above, then the term “ Immaterial Subsidiary ” shall not include each such Subsidiary (starting with the Subsidiary that accounts for the most consolidated net revenues or consolidated assets and then in descending order) necessary to account for at least 90% of the consolidated net revenues and 90% of the consolidated assets, each as described in clause (b) above.

 

Incremental Amendment ”: as defined in Section 2.4(c).

 

Incremental Equivalent Debt ”: any Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries; provided that (i) subject to the provisos to this definition, the amount of Incremental Equivalent Debt shall not exceed, immediately after giving effect to the incurrence of such Incremental Equivalent Debt, the sum of (1) (x) if such Incremental Equivalent Debt is secured on a pari passu basis with the Liens securing the Obligations, an amount such that the First Lien Secured Leverage Ratio calculated on a pro forma basis as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements have been delivered pursuant to Section 6.1(a) or (b) shall not be greater than 2.00:1.00 (excluding the cash proceeds of any borrowing under such Incremental Equivalent Debt that are to remain on the consolidated balance sheet of the Borrower following application of proceeds to any transaction or transactions to be given pro forma effect with such Incremental Equivalent Debt) or (y) if such Incremental Equivalent Debt is secured on a junior basis to the Liens securing the Obligations or is unsecured or subordinated in right of payment to the Obligations, the Consolidated Leverage Ratio calculated on a pro forma basis as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements have been delivered pursuant to Section 6.1(a) or (b) shall not be greater than 3.56:1.00 (excluding the cash proceeds of any borrowing under such Incremental Equivalent Debt that are to remain on the consolidated balance sheet of the Borrower following application of proceeds to any transaction or transactions to be given pro forma effect with such Incremental Equivalent Debt) (such Incremental Equivalent Debt described in the foregoing clauses (1)(x) and (1)(y), the “ Incremental Equivalent Ratio Debt ”) plus (2) the sum of (x) the greater of

 

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$75,000,000 and 45% of LTM EBITDA on the date of determination (net of any Indebtedness incurred pursuant to Section 2.4(a)(iii)(2)(x)) plus (y) the amount of any voluntary prepayments of Term Loans (which shall be deemed for this purpose to include the amount of any repurchases of Offer Loans and repurchases of Term Loans in the open market pursuant to Section 10.6(b)(v), in each case limited to the amount of cash actually paid in respect of such repurchases), other than to the extent made with the proceeds of long-term Indebtedness (net of any Indebtedness incurred pursuant to Section 2.4(a)(iii)(2)(y)) (such amounts described in the foregoing clauses (2)(x) and (2)(y), the “ Incremental Equivalent Base Amount ”); provided that the financial incurrence tests set forth in the foregoing clauses (i)(1)(x) and (i)(1)(y) shall not apply to the incurrence of Incremental Equivalent Debt pursuant to the Incremental Equivalent Base Amount and any such Incremental Equivalent Debt may, at the sole discretion of the Borrower, be incurred under clauses (i)(1)(x) and (i)(1)(y) regardless of whether there is capacity to incur such Incremental Equivalent Debt under clause (i)(2); and (ii) in the event that the Yield for any Incremental Equivalent Debt in the form of loans incurred on or prior to the 18-month anniversary of the Effective Date that is pari passu in right of payment and with respect to the Collateral with the Initial Term Loans is higher than the Yield for the Initial Term Loans by more than 50 basis points, then the Applicable Margin for the Initial Term Loans shall be increased to the extent necessary so that the Yield for the Initial Term Loans is equal to the Yield for such Incremental Equivalent Debt minus 50 basis points, provided that, in the event an interest rate floor for such Incremental Equivalent Debt is higher than the correlative interest rate floor for the Initial Term Loans, such differential between such floors shall be equated to the applicable Yield for purposes of determining whether an increase to the Applicable Margin for the Initial Term Loans shall be required but only to the extent that an increase in such interest rate floor with respect to the Initial Term Loans would cause an increase in the interest rate then in effect for the Initial Term Loans at the time of determination hereunder and, in such case, then such interest rate floor (but not the interest rate margin) applicable to the Initial Term Loans shall be increased to the extent of such differential between interest rate floors.  For purposes of such calculation of Yield, any Incremental Equivalent Debt that are fixed rate loans shall be swapped to a floating rate on a customary matched maturity basis.  For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement, the amount described in the foregoing clauses (i)(1)(x) and (i)(1)(y) are calculated without giving effect to any Incremental Equivalent Debt incurred on a substantially concurrent basis  in reliance on the foregoing clause (i)(2).  Except as set forth in this definition, Incremental Equivalent Debt shall have such terms as determined by the Borrower and the lenders providing such Incremental Equivalent Debt; provided that Incremental Equivalent Debt shall have terms and conditions (excluding pricing, fees, rate floors and optional prepayment or redemption terms or any provisions customary for convertible notes or bonds) that are either (1) not materially less favorable (when taken as a whole) (as determined by the Borrower) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (except to the extent (A) such terms are conformed (or added) in this Agreement for the benefit of the Lenders hereunder pursuant to an amendment hereto subject solely to the reasonable satisfaction of the Administrative Agent (it being understood that to the extent that any financial maintenance covenant is added for the benefit of any Incremental Equivalent Debt, no consent shall be required from the Administrative Agent to the extent that such financial maintenance covenant is also added for the benefit of the Lenders hereunder) or (B) applicable solely to periods after the Latest Maturity Date), (2) customary for issuances of high yield debt securities at the time of incurrence or (3) not materially more

 

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restrictive to the Borrower (as determined by the Borrower), when taken as a whole, than the Loan Documents (taken as a whole) (except to the extent (A) such terms are conformed (or added) in this Agreement for the benefit of the Lenders hereunder pursuant to an amendment hereto subject solely to the reasonable satisfaction of the Administrative Agent (it being understood that to the extent that any financial maintenance covenant is added for the benefit of any Incremental Equivalent Debt, no consent shall be required from the Administrative Agent to the extent that such financial maintenance covenant is also added for the benefit of the Lenders hereunder) or (B) applicable solely to periods after the Latest Maturity Date).  Incremental Equivalent Debt shall be secured on a pari passu basis with or junior basis to the Liens securing the Obligations or shall be unsecured or shall be subordinated in right of payment to the Obligations.  No Restricted Subsidiary shall be a guarantor with respect to any Incremental Equivalent Debt unless such Restricted Subsidiary is a Loan Party which shall have previously or substantially concurrently guaranteed the Obligations, and the obligations in respect of such Incremental Equivalent Debt shall not be secured by Liens on the assets of the Borrower and the Restricted Subsidiaries other than assets constituting Collateral.  No Incremental Equivalent Debt secured on a pari passu basis with the Liens securing the Obligations shall have a final maturity date earlier than the then existing Latest Maturity Date.  No Incremental Equivalent Debt that is secured on a junior basis to the Liens securing the Obligations or that is unsecured or subordinated in right of payment to the Obligations shall have a final maturity date earlier than 91 days after the then existing Latest Maturity Date, and shall have no greater amortization or mandatory prepayments than the then-remaining Initial Term Loans (other than, with respect to convertible notes and bonds, fundamental change offers and pursuant to settlements upon conversion).  No Incremental Equivalent Debt shall have a Weighted Average Life to Maturity that is shorter than the Weighted Average Life to Maturity of the then-remaining Initial Term Loans (without giving effect to nominal amortization for periods where amortization has been eliminated as a result of a prepayment of the applicable Term Loans).  Subject to the foregoing, Incremental Equivalent Debt secured on a pari passu basis with the Liens securing the Obligations shall have amortization as determined by the Borrower and the lenders providing such Incremental Equivalent Debts. To the extent any Incremental Equivalent Debt is secured by liens on the Collateral, the agent, representative or trustee in respect of such Incremental Equivalent Debt shall become a party to an intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent.

 

Incremental Lender ”: as defined in Section 2.4(c).

 

Incremental Term Facility ”: as defined in Section 2.4(a).

 

Incremental Term Commitment ”: as to any Incremental Lender, the obligation of such Incremental Lender, if any, to make an Incremental Term Loan to the Borrower hereunder in connection with an Incremental Amendment in a principal amount not to exceed the amount set forth in such Incremental Amendment or in the Assignment and Assumption pursuant to which such Incremental Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof.

 

Incremental Term Loan ”: a term loan made under an Incremental Term Facility.

 

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Indebtedness ”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (but excluding (i) trade payables, (ii) payroll liabilities incurred in the ordinary course of such Person’s business, (iii) Earn-Out Obligations until such Earn-Out Obligation becomes fixed in amount and a liability on the balance sheet of such Person in accordance with GAAP and (iv) expenses accrued in the ordinary course of business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under or in respect of acceptances, letters of credit, surety bonds or similar arrangements, (g) the liquidation value of all Disqualified Capital Stock of such Person, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation; provided that the amount of such Indebtedness will be the lesser of (i) the fair market value of such property as determined by such Person in good faith on the date of determination and (ii) the amount of such Indebtedness of other Persons, and (j) for the purposes of Sections 7.1 and 8(e) only, all obligations of such Person in respect of Hedge Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor. For purposes of clause (j) above (including as such clause applies to Section 8(e)), the principal amount of Indebtedness in respect of Hedge Agreements shall equal the amount that would be payable (giving effect to netting) at such time if such Hedge Agreement were terminated. For the avoidance of doubt Indebtedness does not include compensation and benefits paid, to be paid, provided or to be provided, in the ordinary course of business and not yet overdue.

 

Indemnified Liabilities ”: as defined in Section 10.5(b).

 

Indemnified Taxes ”: (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 ”: as defined in Section 10.5(b).

 

Independent Financial Advisor ”: an accounting, appraisal, investment banking or consulting firm of nationally recognized standing that is, in the good faith judgment of the Borrower, qualified to perform the task for which it has been engaged and that is independent of the Borrower and its Affiliates.

 

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Initial Term Commitment ”: as to any Initial Term Lender, the obligation of such Initial Term Lender, if any, to make an Initial Term Loan to the Borrower hereunder in a principal amount not to exceed the amount set forth on Schedule 1.1 or in the Assignment and Assumption pursuant to which such Initial Term Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The original aggregate amount of the Initial Term Commitments on the Effective Date is $250,000,000.

 

Initial Term Facility ”: the Initial Term Commitments and the Initial Term Loans made thereunder.

 

Initial Term Lender ”: each Lender that has an Initial Term Commitment or that holds an Initial Term Loan.

 

Initial Term Loan ”: as defined in Section 2.1.

 

Initial Term Loan Maturity Date ”: the date that is five (5) years after the Effective Date.

 

Intellectual Property ”: collectively, all United States and foreign (a) patents, patent applications, certificates of inventions, industrial designs, together with any and all inventions described and claimed therein, and reissues, divisions, continuations, extensions and continuations-in-part thereof and amendments thereto; (b) trademarks, service marks, certification marks, trade names, slogans, logos, trade dress, Internet Domain Names, and other source identifiers, whether statutory or common law, whether registered or unregistered, and whether established or registered in the United States or any other country or any political subdivision thereof, together with any and all registrations and applications for any of the foregoing, goodwill connected with the use thereof and symbolized thereby, and extensions and renewals thereof and amendments thereto; (c) copyrights (whether statutory or common law, and whether published or unpublished), copyrightable subject matter, and all mask works (as such term is defined in 17 U.S.C. Section 901, et seq .), together with any and all registrations and applications therefor, and renewals and extensions thereof and amendments thereto; (d) rights in computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing (“ Software ”); (e) trade secrets and proprietary or confidential information, data and databases, know-how and proprietary processes, designs, inventions, and any other similar intangible rights, to the extent not covered by the foregoing, whether statutory or common law, whether registered or unregistered; and (f) rights, priorities, and privileges corresponding to any of the foregoing or other similar intangible assets throughout the world (including, without limitation, rights and remedies to sue for past, present and future infringements, misappropriations and other violations of any of the foregoing).

 

Intellectual Property Security Agreements ”: an intellectual property security agreement or such other agreement, as applicable, in the form or forms attached to the Guarantee and Collateral Agreement (or any other form approved by the Borrower and the Administrative Agent) pursuant to which each Loan Party which owns any Intellectual Property which is the subject of a registration or application with the United States Patent and Trademark Office or the

 

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United States Copyright Office (such Intellectual Property, “ Registered Intellectual Property ”) grants to the Collateral Agent, for the benefit of the Secured Parties a security interest in such Intellectual Property.

 

Intercreditor Agreement ”: any intercreditor agreement referred to herein that is required to be entered into in order for the Borrower or a Restricted Subsidiary to issue or incur the Indebtedness or Liens, in each case in form and substance reasonably satisfactory to the Administrative Agent.

 

Interest Payment Date ”: (a) as to any ABR Loan, the last day of each March, June, September and December to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any LIBOR Rate Loan having an Interest Period of three (3) months or less, the last day of such Interest Period, and (c) as to any LIBOR Rate Loan having an Interest Period longer than three (3) months, each day that is three (3) months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period.

 

Interest Period ”: as to any LIBOR Rate Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending one, two, three or six months (or if consented to by all Lenders, twelve months) thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three or six months (or if consented to by all Lenders, twelve months) thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent no later than 12:00 Noon, New York City time, on the date that is three (3) Business Days prior to the last day of the then current Interest Period with respect thereto; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

(i)                                      if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

 

(ii)                                   the Borrower may not select an Interest Period that would extend beyond the relevant Term Loan Maturity Date; and

 

(iii)                                any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.

 

Internally Generated Cash ”: with respect to any period, any cash of the Borrower or any Subsidiary Guarantor generated during such period, excluding Net Cash Proceeds and any cash constituting proceeds from an incurrence of Indebtedness, an issuance of Capital Stock or a

 

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capital contribution, in each case, except to the extent such proceeds are included as income in calculating Consolidated Net Income for such period.

 

Internet Domain Names ”: all Internet domain names and associated URL addresses.

 

Interpolated Rate ”: at any time, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the rate as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page or screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; in each case the “ Screen Rate ”) for the longest period (for which that Screen Rate is available in Dollars) that is shorter than the Interest Period and (b) the Screen Rate for the shortest period (for which that Screen Rate is available for Dollars) that exceeds the Interest Period, in each case, as of approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided that if the Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

Investments ”: as defined in Section 7.6.

 

IRS ”: the United States Internal Revenue Service.

 

Joint Bookrunners ”: Morgan Stanley Senior Funding, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement), each in its capacity as a joint bookrunner under this Agreement, and any other joint bookrunner with respect to any Tranche of Term Loans.

 

Junior Financing ”: any Indebtedness of the Borrower or any Restricted Subsidiary or any Indebtedness of the Borrower or any Restricted Subsidiary that is, or that is required to be, contractually subordinated in payment or lien priority to the Obligations, and shall include the 2023 Convertible Notes.

 

Junior Financing Documentation ”: any documentation governing any Junior Financing.

 

Latest Maturity Date ”: at any date of determination, the latest maturity date applicable to any Term Loan or Commitment hereunder at such time, including the latest maturity date of any Incremental Term Loan, Extension Term Loan or Other Term Loan.

 

LCA Election ”: the Borrower’s election to treat a specified investment as a Limited Condition Acquisition.

 

LCA Test Date ”: as defined in Section 1.3(c).

 

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Lead Arranger ”: Morgan Stanley Senior Funding, Inc., in its capacity as sole lead arranger under this Agreement.

 

Lenders ”: each Term Lender, Incremental Lender, Additional Refinancing Lender and lenders holdings Extension Term Loans.

 

LIBOR Rate ”:

 

(a)  for any Interest Period with respect to a LIBOR Rate Loan, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the commencement of such Interest Period by reference to the interest settlement rates for deposits in Dollars (as set forth by (i) the ICE Benchmark Administration as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page or screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion), (ii) any successor service or entity that has been authorized by the U.K. Financial Conduct Authority to administer the London Interbank Offered Rate or (iii) any service selected by the Administrative Agent that has been nominated by such an entity as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “LIBOR Rate” shall be the Interpolated Rate; and

 

(b)  for any interest calculation with respect to an ABR Loan on any date, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on such date by reference to the interest settlement rates for deposits in Dollars with a term of one month (as set forth by (i) the ICE Benchmark Administration as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page or screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion), (ii) any successor service or entity that has been authorized by the U.K. Financial Conduct Authority to administer the London Interbank Offered Rate or (iii) any service selected by the Administrative Agent that has been nominated by such an entity as an authorized information vendor for the purpose of displaying such rates); provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “LIBOR Rate” shall be the Interpolated Rate;

 

in the case of each of clauses (a) and (b) above, multiplied by Statutory Reserves ; provided that notwithstanding the foregoing, the LIBOR Rate (before giving effect to any adjustment for Statutory Reserves) shall, in respect of the Initial Term Loans, be deemed not to be less than 1.00% per annum at any time.

 

LIBOR Rate Loans ”: Term Loans the rate of interest applicable to which is based upon the LIBOR Rate.

 

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LIBOR Tranche ”: the collective reference to LIBOR Rate Loans under a particular loan facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

 

Lien ”: with respect to any property or asset, (a) any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, encumbrance, charge or security interest in, on, of or with respect to such property or asset and (b) any right, title or interest of any Person (including any vendor or lessor) under any conditional sale agreement, capital lease or title retention agreement (or any capital or financing lease having substantially the same economic effect as any of the foregoing) relating to such property or asset; provided that in no event shall an operating lease be deemed to constitute a Lien.

 

Limited Condition Acquisition ” any Permitted Acquisition or other Investment permitted hereunder by the Borrower or one or more of its Restricted Subsidiaries whose consummation is not conditioned on the availability of, or on obtaining, third party financing.

 

Loan Documents ”: this Agreement, the Security Documents, any Intercreditor Agreement, any Refinancing Amendment, any Incremental Amendment, any Extension Amendment and the Notes.

 

Loan Party ”: each of the Borrower and the Subsidiary Guarantors.

 

LTM EBITDA ” as of any date of determination, Consolidated EBITDA calculated on a trailing twelve-month basis as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements have been delivered pursuant to Section 6.1(a) or (b) ending prior to such date.

 

Margin Stock ”: as defined in Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof.

 

Material Adverse Effect ”: a material adverse effect on and/or material adverse developments with respect to (a) the business, assets, liabilities, operations or condition (financial or otherwise) of the Borrower and the Restricted Subsidiaries, taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform their payment Obligations under the Loan Documents or (c) the rights, remedies and benefits available to, or conferred upon, the Administrative Agent, the Collateral Agent any Agent, any Lender or any other Secured Party, taken as a whole, under any Loan Document.

 

Material Indebtedness ”: any Indebtedness of the Borrower or any Restricted Subsidiary the outstanding principal amount of which exceeds $40,000,000.

 

Material Owned Real Property ”: as defined in Section 6.10(b).

 

Materials of Environmental Concern ”: any material, substance or waste that is listed, regulated, or otherwise defined as hazardous, toxic, radioactive, a pollutant or a contaminant (or words of similar regulatory intent or meaning) under applicable Environmental Law, or which would give rise to liability under any Environmental Law, including but not

 

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limited to petroleum (including crude oil or any fraction thereof), petroleum by-products, toxic mold, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos or asbestos-containing material, flammable or explosive substances, or pesticides.

 

Maximum Rate ”: as defined in Section 3.5(e).

 

Moody’s ”: Moody’s Investors Service, Inc.

 

Mortgaged Properties ”: the real properties as to which the Collateral Agent for the benefit of the Secured Parties is granted a Lien pursuant to the Mortgages pursuant to Section 6.10.

 

Mortgages ”: any mortgages, trust deed, deeds of trust or other comparable instrument, covering the Material Owned Real Property required to be mortgaged pursuant to this Agreement in form and substance reasonably satisfactory to the Administrative Agent, the Collateral Agent and the Borrower.

 

Multiemployer Plan ”: a Plan that is a “multiemployer plan” as defined in Section 3(37) or 4001(a)(3) of ERISA.

 

Net Cash Proceeds ”:

 

(a)                                  in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents that exceed $1,000,000 (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or held in escrow or purchase price adjustment receivable or by the Disposition of any non-cash consideration received in connection therewith or otherwise, but only as and when received and net of costs, amounts and taxes set forth below), net of:

 

(i)                                      attorneys’ fees, accountants’ fees, investment banking fees and other professional and transactional fees actually incurred in connection therewith or reasonably estimated to be payable by the Borrower;

 

(ii)                                   amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security Document);

 

(iii)                                other fees and expenses actually incurred in connection therewith;

 

(iv)                               taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements);

 

(v)                                  amounts provided as a reserve in accordance with GAAP against any liabilities associated with the assets disposed of in an Asset Sale (including, without limitation, pension and other post-employment benefit liabilities and

 

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liabilities related to environmental matters or against any indemnification obligations associated with such Asset Sale); provided that such amounts shall be considered Net Cash Proceeds upon release of such reserve; and

 

(b)                                  in connection with any issuance or incurrence of Indebtedness, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.

 

Non-Consenting Lenders ”: any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of each Lender, each affected Lender or each Lender or each affected Lender with respect to a particular Tranche of Term Loans, in each case, in accordance with the terms of Section 10.1 and (ii) has been approved by the Required Lenders (or, (x) in the case of any consent, waiver or amendment that requires the approval of each Lender or each affected Lender, in each case, with respect to a particular Tranche of Term Loans, the Required Lenders in respect of such Tranche or (y) in the case of a Permitted Repricing Amendment, all other Lenders holding a Tranche of Term Loans subject to such repricing that will continue as repriced or modified Term Loans).

 

Non-Defaulting Lender ”: at any time, a Lender that is not a Defaulting Lender.

 

Non-Public Information ”: information which has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD promulgated by the SEC under the Securities Act and the Exchange Act.

 

Not Otherwise Applied ”: with reference to any amount of proceeds of any transaction, that (a) was not required to be applied to prepay the Term Loans pursuant to Section 3.2(c) and (b) was not previously applied in determining the permissibility of a transaction under the Loan Documents where such permissibility was (or may have been) contingent on receipt of such amount or utilization of such amount for a specified purpose.

 

Notes ”: the collective reference to any promissory note evidencing Term Loans.

 

Obligations ”: the unpaid principal of and interest on (including interest accruing after the maturity of the Term Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Term Loans and all other obligations and liabilities of the Loan Parties to any Agent or to any Lender (or, in the case of Specified Hedge Agreements or Specified Cash Management Agreements, any Qualified Counterparty), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, any Specified Hedge Agreement, any Specified Cash Management Agreement or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to any Agent or to any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise; provided that, notwithstanding anything to the contrary

 

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contained herein or in the other Loan Documents, the Obligations shall exclude any Excluded Swap Obligations of any Guarantor.

 

OFAC ”: as defined in Section 4.23(a).

 

Offer ”: as defined in Section 10.6(b).

 

Offer Loans ”: as defined in Section 10.6(b).

 

Organizational Documents ”: as to any Person, the Certificate of Incorporation, Certificate of Formation, By-Laws, Limited Liability Company Agreement, Memorandum and Articles of Association, Partnership Agreement or other similar organizational or governing documents of such Person.

 

Other Applicable Indebtedness ”: as defined in Section 3.2(b).

 

Other Taxes ”: any and all present or future stamp, court, documentary, intangible, recording, filing, excise or property Taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Loan Document.

 

Other Term Loans ”: one or more Tranches of Term Loans made pursuant to or that result from a Refinancing Amendment.

 

Parent Company ”: with respect to a Lender, the bank holding company (as defined in Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.

 

Participant ”: as defined in Section 10.6(e).

 

Patriot Act ”: the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001).

 

Payment in Full ”: (a) the termination of all Commitments and (b) the payment in full in cash of all Term Loans and other amounts owing to any Lender, Agent or other Secured Party in respect of the Obligations (other than Unasserted Contingent Obligations not then due and obligations in respect of Specified Hedge Agreements and Specified Cash Management Agreements).

 

PBGC ”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

Perfection Certificate ”: a perfection certificate in the form of Exhibit I or any other form approved by the Collateral Agent.

 

Permitted Acquisition ”: any acquisition (in one transaction or a series of related transactions), whether by purchase, merger or otherwise, of all or substantially all of the assets

 

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of, all or a majority of the Capital Stock of, or assets constituting a business line or unit or a division of, any Person; provided :

 

(a)                                  immediately prior to, and immediately after giving effect thereto, no Event of Default (or, in the case of a Limited Condition Acquisition, no Event of Default arising under Section 8.1(a) or Section 8.1(f) and no other Event of Default the absence of which is a condition to the effectiveness of such Limited Condition Acquisition) shall have occurred and be continuing or would result therefrom;

 

(b)                                  the Borrower shall comply with Section 6.10 and Section 6.11 to the extent applicable (and subject to the time periods therein);

 

(c)                                   the Consolidated Leverage Ratio, in each case, calculated on a pro forma basis after giving effect to such acquisition as if such acquisition had occurred on the first day of the most recent period of four (4) consecutive fiscal quarters of the Borrower for which financial statements have been delivered pursuant to Section 6.1 shall be either (x) no greater than 4.06:1.00 or (y) no greater than the Consolidated Leverage Ratio as of the last day of the most recent period of four (4) consecutive fiscal quarters of the Borrower for which financial statements have been delivered pursuant to Section 6.1;

 

(d)                                  with respect to any such transaction involving acquisition consideration in an aggregate amount greater than $10,000,000, the Borrower shall have delivered to the Administrative Agent on or before the date of such proposed acquisition, a certificate duly executed by a Responsible Officer of the Borrower evidencing in reasonable detail compliance with the requirements of clause (c) above; and

 

(e)                                   any Person or assets or division as acquired in accordance herewith shall be in substantially the same business or lines of business in which the Borrower and the Restricted Subsidiaries are engaged, or are permitted to be engaged, as provided in Section 7.9, as of the time of such acquisition.

 

It is understood and agreed that any purchase of bonds, notes, debentures or other securities or rights secured by or otherwise supported by, or convertible, exercisable, or exchangeable into the right to receive, royalties owned by a licensor or any other Person without purchasing interests in the underlying agreements or patents shall be treated as a purchase of assets, and not as an Investment in bonds, notes, debentures or other securities for purposes of this Agreement.

 

Permitted Bond Hedge Transaction ” means any call or capped call option (or substantively equivalent derivative transaction) on the Borrower’s common stock purchased by the Borrower in connection with the issuance of any Convertible Indebtedness; provided that the purchase price for such Permitted Bond Hedge Transaction, less the proceeds received by the Borrower from the sale of any related Permitted Warrant Transaction, does not exceed the net proceeds received by the Borrower from the sale of such Convertible Indebtedness issued in connection with the Permitted Bond Hedge Transaction.

 

Permitted First Priority Replacement Debt ”: any secured Indebtedness (including any Registered Equivalent Notes) incurred by the Borrower or any other Loan Party in the form of one or more series of senior secured notes or senior secured loans; provided that (i) such

 

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Indebtedness may only be secured by assets consisting of Collateral on a pari passu basis with the Obligations to the extent secured by such Collateral, (ii) such Indebtedness satisfies the requirements set forth in clauses (v) through (z) of the definition of Credit Agreement Refinancing Indebtedness, (iii) either the security agreements relating to such Indebtedness are substantially the same as the applicable Security Documents (with such differences as are reasonably satisfactory to the Borrower and the Administrative Agent) or all security therefor shall be granted pursuant to documentation that is not more restrictive than the Security Documents in any material respect, in each case taken as a whole (as determined by the Borrower), and (iv) the secured parties thereunder, or a trustee or collateral agent or other representative on their behalf, shall have become a party to an intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent, which shall be entered into or shall be amended prior to or concurrently with the first issuance of Permitted First Priority Replacement Debt in accordance with the terms thereof to provide for the sharing of the Collateral on a pari passu basis among the holders of the Obligations and the holders of such Permitted First Priority Replacement Debt.

 

Permitted Junior Priority Replacement Debt ”: any secured Indebtedness (including any Registered Equivalent Notes) incurred by the Borrower or any other Loan Party in the form of one or more series of second lien (or other junior lien) secured notes or second lien (or other junior lien) secured loans; provided that (i) such Indebtedness may only be secured by assets consisting of Collateral on a second priority (or other junior priority) basis to the Liens securing the Obligations and the obligations in respect of any Permitted First Priority Replacement Debt, (ii) such Indebtedness satisfies the requirements set forth in clauses (v) through (z) of the definition of Credit Agreement Refinancing Indebtedness, (iii) either the security agreements relating to such Indebtedness are substantially the same as the applicable Security Documents (with such differences as are reasonably satisfactory to the Borrower and the Administrative Agent (taking into account the second lien (or other junior lien) nature of all security therefor) or all security therefor shall be granted pursuant to documentation that is not more restrictive than the Security Documents in any material respect, in each case taken as a whole (as determined by the Borrower), and (iv) the secured parties thereunder, or a trustee or collateral agent or other representative on their behalf, shall have become a party to an intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent, which shall be entered into or shall be amended prior to or concurrently with the first issuance of Permitted Junior Priority Replacement Debt in accordance with the terms thereof to provide for the sharing of the Collateral among the holders of the Obligations and the holders of such Permitted Junior Priority Replacement Debt consistent with the terms of this definition.

 

Permitted Refinancing ”: any modification, refinancing, refunding, renewal, restructuring, replacement or extension of any Indebtedness; provided that (i) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness being modified, refinanced, refunded, renewed, restructured, replaced or extended except by an amount equal to unpaid accrued interest and premium thereon plus other amounts paid, and fees and expenses incurred, in connection with such modification, refinancing, refunding, renewal, restructuring, replacement or extension and by an amount equal to any existing commitments unutilized thereunder; (ii) other than with respect to a Permitted Refinancing in respect of Indebtedness permitted under Section 7.1(e), such modification, refinancing, refunding, renewal, restructuring, replacement or extension has a

 

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maturity no earlier and a Weighted Average Life to Maturity no shorter than the Indebtedness being modified, refinanced, refunded, renewed, restructured, replaced or extended; (iii) if the Indebtedness being modified, refinanced, refunded, renewed, restructured, replaced or extended is unsecured, such modification, refinancing, refunding, renewal, restructuring, replacement or extension is unsecured; (iv) if the Indebtedness being modified, refinanced, refunded, renewed, restructured, replaced or extended is subordinated in right of payment to the Obligations, such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the Obligations on terms, taken as a whole, at least as favorable (taken as a whole (as reasonably determined by the Borrowers) to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed, restructured, replaced or extended; (v) if the Indebtedness being modified, refinanced, refunded, renewed, restructured, replaced or extended is secured, such modification, refinancing, refunding, renewal, restructuring, replacement or extension shall not expand the scope of the collateral securing the Indebtedness being modified, refinanced, refunded, renewed , restructured, replaced or extended; (vi) if the Indebtedness being modified, refinanced, refunded, renewed, restructured, replaced or extended is subject to an Intercreditor Agreement, an agent, trustee or other representative validly acting on behalf of the holders of such modified, refinanced, refunded, renewed, restructured, replaced or extended Indebtedness shall become a party to such Intercreditor Agreement; and (vii) the primary obligors and guarantors in respect of such Indebtedness being modified, refinanced, refunded, renewed, restructured, replaced or extended remain the same (or constitute a subset thereof).

 

Permitted Repricing Amendment ”: as defined in Section 10.1.

 

Permitted Reorganization Transaction ”: any reorganization and other activities related to tax planning and tax reorganization (as determined by the Borrower in good faith) so long as such reorganization and other activities do not result in a “significant modification” of the Term Loans for U.S. federal income tax purposes and do not materially impair the security interests of the Lenders and are otherwise not materially adverse to the Lenders and after giving effect to such reorganization and other activities, the Borrower and its Restricted Subsidiaries otherwise comply with Section 6.10 and Section 6.11.  It is understood and agreed that the following transactions shall not be deemed to be materially adverse to the Lenders: (i) the Borrower forms a Delaware limited liability company as a direct Wholly Owned Subsidiary (“ New LLC ”), (ii) New LLC forms a direct Wholly Owned Subsidiary and such Wholly Owned Subsidiary merges with and into the Borrower, with the Borrower surviving as a direct Wholly Owned Subsidiary of New LLC, (iii) in connection with such merger, the public shareholders of the Borrower receive limited liability company interests of New LLC in exchange for their shares of the Borrower, and (iv) (a) New LLC becomes a Guarantor (as defined in the Guarantee and Collateral Agreement) and Grantor (as defined in the Guarantee and Collateral Agreement) (including providing a pledge of all of the outstanding Capital Stock of the Borrower) under the Guarantee and Collateral Agreement and complies with the other provisions of Section 6.10, (b) New LLC becomes subject to a customary passivity covenant, (c) New LLC is required to directly own and control at all times all outstanding Capital Stock of the Borrower and (d) New LLC otherwise becomes subject to this Agreement and the other Loan Documents in a manner customary for passive holding companies.

 

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Permitted Unsecured Replacement Debt ”: any unsecured Indebtedness (including any Registered Equivalent Notes) incurred by the Borrower or any other Loan Party in the form of one or more series of unsecured notes or loans; provided that (i) such Indebtedness satisfies the requirements set forth in clauses (v) through (z) of the definition of Credit Agreement Refinancing Indebtedness, (ii) such Indebtedness (including any guarantee thereof) is not secured by any Lien on any property or assets of the Borrower or any Restricted Subsidiary and (iii) to the extent such Indebtedness is subordinated in right of payment with the Term Loans hereunder, such Indebtedness is subject to a subordination agreement reasonably satisfactory to the Administrative Agent.

 

Permitted Warrant Transaction ” means any call option, warrant or right to purchase (or substantively equivalent derivative transaction) on the Borrower’s common stock sold by the Borrower substantially concurrently with any purchase by the Borrower of a related Permitted Bond Hedge Transaction.

 

Person ”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

Plan ”: any “employee benefit plan” as defined in Section 3(3) of ERISA which is sponsored, maintained or contributed to by, or required to be contributed to by the Borrower or any of its ERISA Affiliates or with respect to which the Borrower or any of its ERISA Affiliates has or would reasonably be expected to have liability, contingent or otherwise, under ERISA.

 

Platform ”: shall mean Debt Domain, IntraLinks, SyndTrak or a substantially similar electronic transmission system.

 

Pledged Equity Interests ”: as defined in the Guarantee and Collateral Agreement.

 

Portfolio Interest Exemption ”: as defined in Section 3.10.

 

Prime Rate ”: the prime rate published in The Wall Street Journal from time to time; provided that if The Wall Street Journal ceases to publish for any reason such rate of interest, “Prime Rate” shall mean the prime lending rate as set forth on the Bloomberg page PRIMBB Index (or successor page) for such day (or such other service as determined by the Administrative Agent from time to time for purposes of providing quotations of prime lending interest rates).

 

Property ”: any right or interest in or to assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.

 

PTE ”: a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

Public Lender ”: any Lender that does not wish to receive Non-Public Information with respect to the Borrower or its Subsidiaries or their respective securities.

 

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Qualified Capital Stock ”: any Capital Stock (other than warrants, rights or options referenced in the definition thereof) that either (a) does not have a maturity and is not mandatorily redeemable (other than for Qualified Capital Stock), or (b) by its terms (or by the terms of any employee stock option, incentive stock or other equity-based plan or arrangement under which it is issued or by the terms of any security into which it is convertible or for which it is exchangeable  (or from which it was converted or exchanged)), or upon the happening of any event, (x) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable (other than for Qualified Capital Stock) (excluding any mandatory redemption resulting from an asset sale or change in control so long as no payments in respect thereof are due or owing, or otherwise required to be made, until all Obligations have been paid in full in cash), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled payment constituting a return of capital, in each case, at any time on or after the ninety-first day following the Latest Maturity Date, or (y) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (or has been converted or  exchanged from) (i) debt securities or (ii) any Capital Stock referred to in clauses (a) or (b)(x) above, in each case, at any time on or after the ninety-first day following the Latest Maturity Date.

 

Qualified Counterparty ”: with respect to any Hedge Agreement or Cash Management Agreement, any counterparty thereto that is, or that at the time such Hedge Agreement or Cash Management Agreement, as applicable, was entered into, was, a Lender, the Lead Arranger, a Joint Bookrunner or an Affiliate of any of the foregoing Persons (or, in the case of any such Hedge Agreement or Cash Management Agreement, as applicable, entered into prior to the Effective Date, any counterparty that was a Lender, the Lead Arranger, a Joint Bookrunner or an Affiliate of any of the foregoing Persons on the Effective Date).

 

Quarterly Payment Date ”: March 31, June 30, September 30 and December 31 of each year.

 

Ratio Calculation Date ”: as defined in Section 1.3(a)(i).

 

Real Property ”: all real property held or used by any Group Member, which relevant Group Member owns in fee or in which it holds a leasehold interest as a tenant, including as of the Effective Date.

 

Recovery Event ”: any settlement of or payment in excess of $5,000,000 in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Group Member.

 

Referenced SEC Filings ”: the Borrower’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “ 2016 Annual Report ”), the Borrower’s Definitive Proxy Statement on Schedule 14A filed on March 22, 2017, as amended, but only to the extent that such information was incorporated by reference into the 2016 Annual Report, the Borrower’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, and the Borrower’s Current Reports on Form 8-K and Form 8-K/A filed on January 30, 2017, February 9, 2017, February 23, 2017, March 7, 2017, April 10, 2017, April 26, 2017, April 27, 2017, April 28, 2017, May 2, 2017, May 5, 2017, June 2, 2017, July 21, 2017, July 26, 2017, August 1, 2017, August 2, 2017 and August 7, 2017 (excluding in each case, if applicable, Items 2.02 and 7.01).

 

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Refinancing ”: as defined in the recitals to this Agreement.

 

Refinancing Amendment ”: any amendment to this Agreement in form reasonably satisfactory to the Borrower executed by (a) each Loan Party (and to the extent it directly adversely affects the rights or increases the obligations of the Administrative Agent or the Collateral Agent, the Administrative Agent or Collateral Agent, as applicable) and (b) each Additional Refinancing Lender that agrees to provide any portion of the Other Term Loans being incurred pursuant thereto, in accordance with Section 2.6.

 

Register ”: as defined in Section 10.6(d).

 

Registered Equivalent Notes ”: with respect to any notes originally issued in a Rule 144A or other private placement transaction under the Securities Act, substantially identical notes (having the same guarantees) issued in a dollar-for-dollar exchange therefor pursuant to an exchange offer registered with the SEC.

 

Registered Intellectual Property ”: as defined in the definition of Intellectual Property Security Agreements.

 

Regulation S-X ”: Regulation S-X promulgated under the Securities Act.

 

Regulation T ”: Regulation T of the Board as in effect from time to time.

 

Regulation U ”: Regulation U of the Board as in effect from time to time.

 

Regulation X ”: Regulation X of the Board as in effect from time to time.

 

Reinvestment Deferred Amount ”: with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by any Group Member in connection therewith that are not applied to prepay the Term Loans pursuant to Section 3.2(b) as a result of the delivery of a Reinvestment Notice.

 

Reinvestment Event ”: any Asset Sale or Recovery Event in respect of which the Borrower has delivered a Reinvestment Notice.

 

Reinvestment Notice ”: a written notice executed by a Responsible Officer stating that no Event of Default has occurred and is continuing and that the Borrower, (directly or indirectly through a Restricted Subsidiary) intends and expects to reinvest all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event in its business (including by making Permitted Acquisitions and funding research and development costs).

 

Reinvestment Prepayment Amount ”: with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount reinvested prior to the relevant Reinvestment Prepayment Date in the Borrower’s or the Restricted Subsidiaries’ businesses (including by making Permitted Acquisitions and funding research and development costs).

 

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Reinvestment Prepayment Date ”: with respect to any Reinvestment Event, the earlier of (a) the date occurring twelve (12) months (or if the Borrower or a Restricted Subsidiary, as the case may be has entered into a legally binding commitment to reinvest such Reinvestment Deferred Amount during such twelve (12) month period, eighteen (18) months) after such Reinvestment Event and (b) the date on which the Borrower shall have determined not to, or shall have otherwise ceased to, reinvest the relevant Reinvestment Deferred Amount in accordance with this Agreement.

 

Related Parties ” shall mean, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents, advisors and other representatives of such Person and of such Person’s Affiliates.

 

Related Party Register ”: as defined in Section 10.6(d).

 

Release ”: with respect to Materials of Environmental Concern, any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration into or through the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Materials of Environmental Concern).

 

Removal Effective Date ”: as defined in Section 9.6(b).

 

Repricing Transaction ”: (a) the prepayment pursuant to Section 3.1 or 3.2(a), refinancing, substitution or replacement of all or a portion of the Initial Term Loans with the incurrence of any new indebtedness having an effective interest cost or weighted average yield (excluding any arrangement, structuring, underwriting or similar fee paid to any Person in connection therewith that are not shared generally with all Persons providing such new indebtedness) at the time of incurrence thereof that is less than the effective interest cost or weighted average yield of such Initial Term Loans at the time of such incurrence or (b) any amendment to this Agreement that, directly or indirectly, reduces the effective interest cost or weighted average yield of such Initial Term Loans (or any Lender must assign its Initial Term Loans as a result of its failure to consent to any such amendment).  No “Repricing Transaction” shall be deemed to occur in connection with any Change of Control or Transformative Acquisition.

 

Required Lenders ”: at any time, the holders of more than 50% of the sum of (a) the aggregate unpaid principal amount of the Term Loans then outstanding and (b) the Total Term Commitments then in effect.

 

Required Prepayment Date ”: as defined in Section 3.2(h).

 

Requirement of Law ”: as to any Person, any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, 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.

 

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Resignation Effective Date ”: as defined in Section 9.6(a).

 

Responsible Officer ”: the chief executive officer, president, chief financial officer treasurer, any vice president or secretary of the Borrower or any other person designated by the board of directors in a resolution (unless otherwise specified), but in any event, with respect to financial matters, the chief financial officer or treasurer of the Borrower (unless otherwise specified).

 

Restricted Payments ”: as defined in Section 7.5.

 

Restricted Subsidiary ”: shall mean any Subsidiary that is not an Unrestricted Subsidiary.

 

Retained Declined Proceeds ”: as defined in Section 3.2(h).

 

Retained Excess Cash Flow Amount ”: at any date, an amount, not less than zero, determined on a cumulative basis equal to the amount of Excess Cash Flow (commencing with the fiscal quarter ending September 30, 2017) that was not required to be applied to prepay the Term Loans in accordance with Section 3.2(c).

 

Return ”: with respect to any Investment, any dividend, distribution, interest, fee, premium, return of capital, repayment of principal, income, profit (from a disposition or otherwise) and any other amount received or realized in respect thereof.

 

Royalty Rights ”: the contractual right to receive royalties, income, fees or other payments from any Person in connection with such Person’s exploitation of Intellectual Property, including, without limitation, any right to receive royalty payments, income, fees or other payments from Glaxo Group Limited or any Affiliate or licensee of Glaxo Group Limited.

 

S&P ”: Standard & Poor’s Ratings Services.

 

Sanctioned Country ” shall mean, at any time, a country or territory that is subject to comprehensive Sanctions.  For the avoidance of doubt, as of the Effective Date, Sanctioned Countries are the Crimea region of Ukraine, Cuba, Iran, North Korea, Syria and Sudan.

 

Sanctioned Person ” 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 or the U.S. Department of State, or by the United Nations Security Council or the European Union, (b) any Person located, organized or resident in a Sanctioned Country or (c) any Person owned 50% or more or controlled by any such Person described in the foregoing clauses (a) and (b).

 

Sanctions ”: economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) 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, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

 

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Screen Rate ”: as defined in the definition of Interpolated Rate.

 

SEC ”: the U.S. Securities and Exchange Commission, any successor thereto and any analogous Governmental Authority.

 

Secured Parties ”: the collective reference to the Lenders, the Agents, and the Qualified Counterparties, and each of their successors and assigns.

 

Securities Act ”: the Securities Act of 1933, as amended.

 

Security Documents ”: the collective reference to the Guarantee and Collateral Agreement, the Mortgages, the Control Agreements, the Intellectual Property Security Agreements and all other security documents hereafter delivered to the Administrative Agent or the Collateral Agent granting a Lien on any property of any Person to secure the Obligations of any Loan Party under any Loan Document, any Specified Hedge Agreement or any Specified Cash Management Agreement.

 

Single Employer Plan ”: any Plan that is covered by Title IV of ERISA, but that is not a Multiemployer Plan.

 

Software ”: as defined in the definition of Intellectual Property.

 

Solvent ”: as to any Person, that as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise,” as of such date, (b) the “present fair saleable value” of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business and (d) such Person will be able to pay its debts as they mature.  For purposes of this definition, (i) “ debt ” shall mean liability on a “claim,” (ii) “ claim ” shall mean any (A) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured and (iii) such other quoted terms used in this definition shall be determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors.

 

Special Flood Hazard Area ”: an area that FEMA’s current flood maps indicate has at least a one percent (1%) chance of a flood equal to or exceeding the base flood elevation (a 100-year flood) in any given year.

 

specified currency ”: as defined in Section 10.17.

 

Specified Cash Management Agreement ”: any Cash Management Agreement entered into by (a) the Borrower and (b) any Qualified Counterparty, as counterparty, in each case to the extent the Borrower designates in writing to the Administrative Agent that such Cash

 

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Management Agreement is a Specified Cash Management Agreement; provided , that any release of Collateral or Guarantors effected in the manner permitted by this Agreement shall not require the consent of holders of obligations under Specified Cash Management Agreements; provided , however , that notwithstanding such release, nothing herein shall limit the contractual rights of any such Qualified Counterparty set forth in such Specified Cash Management Agreement.

 

Specified Hedge Agreement ”: any Hedge Agreement entered into by (a) the Borrower and (b) any Qualified Counterparty, as counterparty, in each case to the extent the Borrower designates in writing to the Administrative Agent that such Hedge Agreement is a Specified Hedge Agreement; provided , that any release of Collateral or Guarantors effected in the manner permitted by this Agreement shall not require the consent of holders of obligations under Specified Hedge Agreements; provided , however , that notwithstanding such release, nothing herein shall limit the contractual rights of any such Qualified Counterparty set forth in such Specified Hedge Agreement.

 

Specified Transaction ”:  any (a) disposition of all or substantially all the assets of or all the Capital Stock of any Restricted Subsidiary or of any product line, business unit, line of business or division of the Borrower or any of the Restricted Subsidiaries, (b) Permitted Acquisitions, (c) Investment that results in a Person becoming a Restricted Subsidiary, (d) designation of any Restricted Subsidiary as an Unrestricted Subsidiary, or of any Unrestricted Subsidiary as a Restricted Subsidiary or (e) the proposed incurrence of Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility in the ordinary course of business for working capital purposes) or making of a Restricted Payment or payment in respect of Indebtedness or other event in respect of which calculation of Consolidated EBITDA or compliance with any financial ratio is by the terms of this Agreement required to be calculated on a pro forma basis.

 

Statutory Reserves ”: 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 percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board of Governors of the Federal Reserve System of the United States and any other banking authority, domestic or foreign, to which the Administrative Agent or any Lender (including any branch, Affiliate or other fronting office making or holding a Loan) is subject for Eurocurrency Liabilities (as defined in Regulation D of the Board). Eurocurrency Rate Loans shall be deemed to constitute Eurocurrency Liabilities (as defined in Regulation D of the Board) 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 the Administrative Agent or any Lender under such Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

Subsidiary ”: as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

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Subsidiary Guarantor ”: each Subsidiary of the Borrower that guarantees the Obligations pursuant to a Loan Document or pursuant to Section 6.10.

 

Survey ”: a survey of any Mortgaged Property (and all improvements thereon) which is (a) (i) prepared by a surveyor or engineer licensed to perform surveys in the jurisdiction where such Mortgaged Property is located, (ii) dated (or redated) not earlier than six months prior to the date of delivery thereof unless there shall have occurred within six months prior to such date of delivery any exterior construction on the site of such Mortgaged Property or any easement, right of way or other interest in the Mortgaged Property has been granted or become effective through operation of law or otherwise with respect to such Mortgaged Property which, in either case, can be depicted on a survey, in which events, as applicable, such survey shall be dated (or redated) after the completion of such construction or if such construction shall not have been completed as of such date of delivery, not earlier than 20 days prior to such date of delivery, or after the grant or effectiveness of any such easement, right of way or other interest in the Mortgaged Property, provided that the Borrower shall have a reasonable amount of time to deliver such redated survey, (iii) certified by the surveyor (in a manner reasonably acceptable to the Administrative Agent) to the Administrative Agent, the Collateral Agent and the Title Company, (iv) complying in all respects with the minimum detail requirements of the American Land Title Association as such requirements are in effect on the date of preparation of such survey and (v) sufficient for the Title Company to remove all standard survey exceptions from the title insurance policy (or commitment) relating to such Mortgaged Property and issue customary endorsements or (b) otherwise acceptable to the Administrative Agent.

 

Swap Obligations ”: with respect to any Loan Party any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the  meaning of Section 1a(47) of the Commodity Exchange Act.

 

Tax Status Certificate ”: a certificate substantially in the form of Exhibit D-1, D-2, D-3 or D-4, as applicable.

 

Taxes ”: taxes, levies, imposts, duties, charges, fees, deductions or withholdings imposed by any Governmental Authority, and any interest, penalties or additions to tax imposed with respect thereto.

 

Term Commitments ”: each of the Initial Term Commitments and the Incremental Term Commitments, as the context may require.

 

Term Facilities ”: each of the Initial Term Facility, each Incremental Term Facility and each Tranche of Other Term Loans or Extension Term Loans, as the context may require.

 

Term Lender ”: each Initial Term Lender, each Incremental Lender and each Lender that holds Other Term Loans or Extension Term Loans, as the context may require.

 

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Term Loan Maturity Date ”: (a) in the case of the Initial Term Facility, the Initial Term Loan Maturity Date and (b) in the case of any Incremental Term Loan, Other Term Loan or Extension Term Loan, the maturity date with respect thereto as set forth in the relevant Incremental Amendment, Refinancing Amendment or Extension Amendment, as applicable.

 

Term Loans ”: each of the Initial Term Loans, together with any Incremental Term Loans, Other Term Loans and Extension Term Loans, as the context may require.

 

Title Company ”: any title insurance company as shall be retained by Borrower and reasonably acceptable to the Administrative Agent.

 

Total Term Commitments ”: at any time, the aggregate amount of the Term Commitments then in effect. The original aggregate amount of the Total Term Commitments on the Effective Date is $250,000,000.

 

Tranche ”: each of the Initial Term Loans, any Incremental Term Loans borrowed in accordance with Section 2.4 that are designated as a separate Tranche, any Other Term Loans and any Extension Term Loans, as the context may require.

 

Transaction ”: collectively, (a) the Refinancing, (b) the execution, delivery and performance of the Loan Documents and the borrowing of the Initial Term Loans on the Effective Date, (c) the other transactions contemplated by the Loan Documents and (d) the payment of all fees and expenses to be paid on or prior to the Effective Date and owing in connection with the foregoing.

 

Transformative Acquisition ”: any acquisition by any Group Member that either (a) is not permitted by the terms of this Agreement and other Loan Documents  immediately prior to the consummation of such acquisition or (b) if permitted by the terms of this Agreement and other Loan Documents immediately prior to the consummation of such acquisition, would not provide the Group Members with adequate flexibility under this Agreement and other Loan Documents for the continuation and/or expansion of their combined operations following such consummation, as determined by the Borrower acting in good faith.

 

TRC ”: Theravance Respiratory Company, LLC, a Delaware limited liability company.

 

Type ”: as to any Term Loan, its nature as an ABR Loan or a LIBOR Rate Loan.

 

Unasserted Contingent Obligations ”: as defined in the Guarantee and Collateral Agreement.

 

Uniform Commercial Code ” or “ UCC ”: the Uniform Commercial Code, as in effect from time to time in any applicable jurisdiction.

 

United States ”: the United States of America.

 

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Unrestricted Subsidiary ”: means any Subsidiary designated by the Borrower after the Effective Date as an Unrestricted Subsidiary pursuant to Section 6.15, in each case, until such Person ceases to be Unrestricted Subsidiary in accordance with Section 6.15 or ceases to be a Subsidiary.  As of the Effective Date, none of the Subsidiaries of the Borrower are Unrestricted Subsidiaries.

 

Voluntary Prepaid Amount ” as defined in Section 3.2(c)

 

Voluntary Prepayment ”: a prepayment of the Term Loans pursuant to Section 3.1.

 

Waivable Mandatory Prepayment ”: as defined in Section 3.2(h).

 

Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness.

 

Wholly Owned Restricted Subsidiary ”: a Wholly Owned Subsidiary that is a Restricted Subsidiary.

 

Wholly Owned Subsidiary ”: as to any Person, any other Person, all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

 

Withdrawal Liability ” shall mean any liability to a Multiemployer Plan as a result of a “complete withdrawal” or “partial withdrawal” from such Multiemployer Plan, as such terms are defined in Section 4201(b) of ERISA.

 

Write-Down and Conversion Powers ”: 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 ”: with respect to any Term Loan, on any date of determination as calculated by the Administrative Agent, the effective yield on such Term Loan, taking into account (a) the applicable interest rate margin, (b) any interest rate floors, (c) original issue discount and (d) upfront fees paid generally to all Persons providing such Term Loan (with original issue discount and upfront fees being equated to interest based on the shorter of (x) the Weighted Average Life to Maturity of such Term Loans and (y) four years), but exclusive of any arrangement, structuring, underwriting or similar fee paid to any Person in connection therewith that are not shared generally with all Persons providing such Term Loan.

 

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1.2.                             Other Interpretive Provisions .

 

(a)                                  Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

 

(b)                                  As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to any Group Member not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP, (ii) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) 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, Capital Stock, securities, revenues, accounts, leasehold interests and contract rights, (v) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (vi) references to agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise modified from time to time (subject to any applicable restrictions hereunder), (vii) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, (viii) any references herein to any Person shall be construed to include such Person’s permitted successors and assigns and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all of the functions thereof and (ix) the phrase “for the term of this Agreement” and any similar phrases shall mean the period beginning on the Effective Date and ending on the Latest Maturity Date.  In the computation of periods of time from a specified date to a later specified date, the word “from” shall mean “from and excluding”, the words “to” and “until” each mean “to but excluding” and the word “through” shall mean “to and including”.

 

(c)                                   The words “hereof,” “herein” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document in its entirety and not to any particular provision of thereof.  Unless otherwise specified, all references in a Loan Document to Articles, Sections, recitals, Annexes, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and recitals, Annexes, Exhibits and Schedules to, the Loan Document in which such references appear.

 

(d)                                  The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.

 

(e)                                   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.  In the event that any Accounting Change (as defined below) shall occur and such change results in a change in the method of calculation of standards or terms (including financial ratios) in this Agreement, then the Borrower and the Administrative Agent agree to enter into good faith negotiations in order to amend such provisions of this Agreement so as to equitably reflect such

 

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Accounting Change with the desired result that the criteria for evaluating the Borrower’s consolidated financial condition shall be the same after such Accounting Change as if such Accounting Change had not been made.  Until such time as such an amendment shall have been executed and delivered by the Borrowers the Administrative Agent and the Required Lenders, (i) all financial ratios, covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Change had not occurred and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such standards and terms (including financial ratios) made before and after giving effect to such Accounting Change.  “ Accounting Change ” refers to any change in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC.  Notwithstanding the foregoing, for purposes of determining compliance with any covenant contained herein, Indebtedness of the Borrower and its Restricted Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

(f)                                    When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall extend to the immediately succeeding Business Day and such extension of time shall be reflected in computing interest or fees, as the case may be; provided that, with respect to any payment of interest on or principal of LIBOR Rate Loans, if such extension would cause any such payment to be made in the next succeeding calendar month, such payment shall be made on the immediately preceding Business Day.

 

(g)                                   Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

1.3.                             Pro Forma Calculations; Limited Condition Acquisitions .

 

(a)                                  Solely for purposes of determining whether any action is otherwise permitted to be taken hereunder, the Consolidated Leverage Ratio and the First Lien Secured Leverage Ratio shall be calculated as follows:

 

(i)                                      in the event that the Borrower or any of the Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness subsequent to the reference period for which such ratio is being calculated but prior to or simultaneously with the event for which the calculation of such ratio is made (a “ Ratio Calculation Date ”), then such ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness as if the same had occurred at the beginning of the applicable four-quarter period; provided that (x) if such Indebtedness has a floating or formula rate, such Indebtedness shall have an implied rate of interest for the applicable period for purposes of this calculation determined by utilizing the rate that is or would be in effect with respect to such Indebtedness at the relevant date of determination (taking into account any interest rate hedging arrangements applicable to such Indebtedness), (y) interest on

 

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any obligations with respect to capital leases shall be deemed to accrue at an interest rate reasonably determined by a Responsible Officer of the Borrower to be the rate of interest implicit in such obligation in accordance with GAAP and (z) interest on any Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a London interbank offered rate or other rate shall be determined to have been based upon the rate actually chosen, or, if none was so chosen, then based upon such optional rate as the Borrower or such Restricted Subsidiary may designate; and

 

(ii)                                   if any Specified Transactions are consummated by the Borrower or any of the Restricted Subsidiaries subsequent to such reference period and on or prior to or simultaneously with the relevant Ratio Calculation Date, Consolidated EBITDA shall be calculated on a pro forma basis, assuming that all such Specified Transactions had occurred on the first day of the four-quarter reference period in a manner consistent, where applicable, with the pro forma adjustments (without duplication) set forth in the definition of Consolidated EBITDA.

 

(b)                                  For purposes of calculating the Consolidated Leverage Ratio and the First Lien Secured Leverage Ratio in connection with any Indebtedness incurrence test (including any amounts permitted to be incurred pursuant to Section 2.4), such ratios shall be calculated after giving effect to any such incurrence on a pro forma basis, and, in each case, with respect to any revolving commitment, assuming a borrowing of the maximum amount of loans available thereunder, and such calculation shall be made excluding the cash proceeds of any borrowing under any such Indebtedness that are to remain on the consolidated balance sheet of the Borrower following application of proceeds to any transaction or transactions to be given pro forma effect with such Indebtedness.  For purposes of calculating the Consolidated Leverage Ratio or the First Lien Secured Leverage Ratio on a pro forma basis as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements have been delivered pursuant to Section 6.1(a) or (b), prior to the initial delivery of financial statements under Section 6.1(a) or (b), as applicable, the relevant measurement period shall be the period of four consecutive fiscal quarters ending prior to the Effective Date for which financial statements have been delivered to the Administrative Agent.

 

(c)                                   Notwithstanding anything to the contrary in this Agreement, solely for the purpose of (A) measuring the relevant financial ratios and basket availability with respect to the incurrence of any Indebtedness (including any Incremental Term Loans) or Liens or the making of any Investments, Restricted Payments, prepayments, repurchases, redemptions or defeasances of Junior Financings or Dispositions or the designation of any Restricted Subsidiaries or Unrestricted Subsidiaries, (B) determining compliance with representations and warranties or the occurrence of any Default or Event of Default or (C) determining the satisfaction of all other conditions precedent to the incurrence of Indebtedness, the creation of Liens, the making of any Disposition, the making of an Investment or the making of a Restricted Payment, in each case, in connection with a Limited Condition Acquisition, if the Borrower has made an LCA Election with respect to such Limited Condition Acquisition, the date of determination of whether any such action is permitted hereunder, shall be deemed to be at the election of the Borrower, either (x) the date on which the definitive agreements for such Limited Condition Acquisition are entered into or (y) the date on which such Limited Condition Acquisition is consummated (the “ LCA Test Date ”), and if, after giving pro forma effect to the Limited Condition Acquisition and

 

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the other transactions to be entered into in connection therewith as if they had occurred at the beginning of the most recent period of four consecutive fiscal quarters for which financial statements have been delivered pursuant to Section 6.1 ending prior to the LCA Test Date, the Borrower could have taken such action on the relevant LCA Test Date in compliance with such financial ratio, basket, representation, warranty or condition, such financial ratio, basket, representation, warranty or condition shall be deemed to have been complied with.  If the Borrower has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any financial ratio or basket availability on or following the relevant LCA Test Date and prior to the earlier of (x) the date on which such Limited Condition Acquisition is consummated or (y) the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation of such Limited Condition Acquisition, any such financial ratio or basket availability shall be calculated (and tested) (A) on a pro forma basis assuming such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated until such time as the applicable Limited Condition Acquisition has actually closed or the definitive agreement with respect thereto expires or has been terminated and (B) with respect to any Restricted Payment, on a standalone basis without giving effect to such Limited Condition Acquisition and the other transactions in connection therewith.

 

(d)                                  Notwithstanding anything herein to the contrary, Excess Cash Flow shall not be determined on a pro forma basis.

 

1.4.                             Rounding .  Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up for five).

 

1.5.                             Rates .  The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of “LIBOR Rate” or with respect to any comparable or successor rate thereto.

 

1.6.                             Cashless Rolls .  Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, any Lender may exchange, continue or roll over all or a portion of its Term Loans in connection with any refinancing, extension, loan modification or similar transaction permitted by the terms of this Agreement, pursuant to a cashless settlement mechanism approved by the Borrower, the Administrative Agent and such Lender.

 

SECTION 2.  AMOUNT AND TERMS OF TERM COMMITMENTS

 

2.1.                             Term Commitments . Subject to the terms and conditions hereof, each Initial Term Lender severally agrees to make a term loan (an “ Initial Term Loan ”) to the Borrower on the Effective Date in an amount not to exceed the Initial Term Commitment of such Initial Term Lender.  Term Loans may from time to time be LIBOR Rate Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 3.3.

 

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2.2.                             Procedure for Term Loan Borrowing .  With respect to Term Loan borrowings, the Borrower shall give the Administrative Agent irrevocable notice in the form attached hereto as Exhibit B (or any other form approved by the Borrower and the Administrative Agent) (which notice must be received by the Administrative Agent prior to 12:00 Noon, New York City time (or such later time as the Administrative Agent may agree), (a) one Business Day (or such shorter time as the Administrative Agent may agree) prior to the requested Borrowing Date, in the case of LIBOR Rate Loans or (b) one Business Day prior to the requested Borrowing Date, in the case of ABR Loans; provided that such notice with respect to the Initial Term Loans may be delivered to the Administrative Agent prior to 12:00 Noon, New York City time (or such later time as the Administrative Agent may agree), one Business Day prior to the anticipated Effective Date) requesting that the applicable Lenders make the applicable Term Loans on the applicable Borrowing Date and specifying the amount to be borrowed.  Upon receipt of such notice the Administrative Agent shall promptly notify each applicable Lender thereof.  Not later than 12:00 Noon, New York City time, on the requested Borrowing Date, each applicable Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the applicable Term Loans to be made by such Lender. The Administrative Agent shall make the proceeds of such Term Loans available to the Borrower on such Borrowing Date by wire transfer in immediately available funds to a bank account designated in writing by the Borrower to the Administrative Agent.

 

2.3.                             Repayment of Term Loans . On each Quarterly Payment Date, beginning with December 31, 2017, the Borrower shall repay to the Administrative Agent for the ratable account of the Initial Term Lenders an aggregate principal amount of Initial Term Loans equal to 2.50% of the aggregate initial principal amounts of Initial Term Loans borrowed by the Borrower on the Effective Date pursuant to Section 2.1, and the entire outstanding balance of the Initial Term Loans shall be due and payable by the Borrower in full on the Initial Term Loan Maturity Date.  The Borrower shall repay Incremental Term Loans, Other Term Loans and Extension Term Loans in accordance with the relevant repayment schedule agreed to by the Lenders of such Term Loans in the relevant Incremental Amendment, Refinancing Amendment or Extension Amendment, as applicable.

 

2.4.                             Incremental Term Loans .

 

(a)                                  At any time and from time to time prior to the Latest Maturity Date, subject to the terms and express conditions set forth herein, the Borrower may by no less than three Business Days’ prior written notice to the Administrative Agent (or such lesser number of days reasonably acceptable to the Administrative Agent), request to add one or more new credit facilities consisting of one or more additional Tranches of Term Loans or an increase to an existing Tranche of Term Loans (each, an “ Incremental Term Facility ”); provided that (i) immediately before and after giving effect to each Incremental Amendment and the applicable Incremental Term Facility, (A) no Default or Event of Default exists or would result therefrom to the extent the proceeds of such Incremental Term Facility are not used to finance a Limited Condition Acquisition or (B) no Default or Event of Default arising under Section 8.1(a) or Section 8.1(f) and no other Default or Event of Default the absence of which is a condition required by the Incremental Lenders providing such Incremental Term Facility exists or would result therefrom to the extent the proceeds of such Incremental Term Facility are used to finance a Limited Condition Acquisition; (ii) as a condition to the effectiveness of any Incremental

 

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Amendment and any Incremental Term Commitments and the making of the Incremental Term Loans thereunder, each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects (or in all respects where qualified by materiality or Material Adverse Effect) on and as of the date thereof (except to the extent made as of a specific date, in which case such representations and warranties shall be true and correct in all material respects (or in all respects where qualified by materiality or Material Adverse Effect) on and as of such specified date) (provided that in the case of an Incremental Term Facility the proceeds of which are used to finance a Limited Condition Acquisition, such requirement shall be subject to customary “specified representations” and customary “specified acquisition agreement representations” as agreed by the relevant Incremental Lenders (but in no event shall “specified representations” be more expansive than the representations made by the Borrower in Sections 4.3(a) (with respect to the organizational existence of the Loan Parties only), 4.4, 4.5(a), 4.11, 4.14, 4.19 (as it relates to the creation, validity and perfection of the security interests in the Collateral), 4.20, 4.23(b) (as it relates to the Patriot Act) and 4.23(d)) and any reference to “material adverse effect” in such “specified representations” shall be understood for this purpose to refer to “material adverse effect” or similar definition in as defined in the main transaction agreement governing such Limited Condition Acquisition), (iii) subject to the provisos to this sentence, the amount of Incremental Term Facilities shall not exceed, immediately after giving effect to each Incremental Amendment and the applicable Incremental Term Facility, the sum of (1) (x) if such Incremental Term Facility is secured on a pari passu basis with the Liens securing the Obligations, an amount such that the First Lien Secured Leverage Ratio calculated on a pro forma basis as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements have been delivered pursuant to Section 6.1(a) or (b) shall not be greater than 2.00:1.00 (excluding the cash proceeds of any borrowing under such Incremental Term Facility that are to remain on the consolidated balance sheet of the Borrower following application of proceeds to any transaction or transactions to be given pro forma effect with such Incremental Term Facility) or (y) if such Incremental Term Facility is secured on a junior basis to the Liens securing the Obligations or is unsecured or subordinated in right of payment to the Obligations, the Consolidated Leverage Ratio calculated on a pro forma basis as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements have been delivered pursuant to Section 6.1(a) or (b) shall not be greater than 3.56:1.00 (excluding the cash proceeds of any borrowing under such Incremental Term Facility that are to remain on the consolidated balance sheet of the Borrower following application of proceeds to any transaction or transactions to be given pro forma effect with such Incremental Term Facility) (such Incremental Term Facilities described in the foregoing clauses (1)(x) and (1)(y), the “ Incremental Ratio Debt ”) plus (2) the sum of (x) the greater of $75,000,000 and 45% of LTM EBITDA on the date of determination (net of any Indebtedness incurred pursuant to clause (i)(2)(x) of the first proviso set forth in the definition of Incremental Equivalent Debt) plus (y) the amount of any voluntary prepayments of Term Loans (which shall be deemed for this purpose to include the amount of any repurchases of Offer Loans and repurchases of Term Loans in the open market pursuant to Section 10.6(b)(v), in each case limited to the amount of cash actually paid in respect of such repurchases), other than to the extent made with the proceeds of long-term Indebtedness (net of any Indebtedness incurred pursuant to clause (i)(2)(y) of the first proviso set forth in the definition of Incremental Equivalent Debt) (such amounts described in the foregoing clauses (2)(x) and (2)(y), the “ Incremental Base Amount ”); provided that the

 

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financial incurrence tests set forth in the foregoing clauses (iii)(1)(x) and (iii)(1)(y) shall not apply to the incurrence of Incremental Term Facilities pursuant to the Incremental Base Amount and any such Incremental Term Facility may, at the sole discretion of the Borrower, be incurred under clauses (iii)(1)(x) and (iii)(1)(y) regardless of whether there is capacity to incur such Incremental Term Facility under clause (iii)(2); and (iv) in the event that the Yield for any Incremental Term Facility incurred on or prior to the 18-month anniversary of the Effective Date that is pari passu in right of payment and with respect to the Collateral with the Initial Term Loans is higher than the Yield for the Initial Term Loans by more than 50 basis points, then the Applicable Margin for the Initial Term Loans shall be increased to the extent necessary so that the Yield for the Initial Term Loans is equal to the Yield for such Incremental Term Facility minus 50 basis points; provided that, in the event an interest rate floor for such Incremental Term Facility is higher than the correlative interest rate floor for the Initial Term Loans, such differential between such floors shall be equated to the applicable Yield for purposes of determining whether an increase to the Applicable Margin for the Initial Term Loans shall be required but only to the extent that an increase in such interest rate floor with respect to the Initial Term Loans would cause an increase in the interest rate then in effect for the Initial Term Loans at the time of determination hereunder and, in such case, then such interest rate floor (but not the interest rate margin) applicable to the Initial Term Loans shall be increased to the extent of such differential between interest rate floors (the provision in this clause (iv), the “ MFN Protection ”).  For purposes of such calculation of Yield, any Incremental Term Loans that are fixed rate loans shall be swapped to a floating rate on a customary matched maturity basis.  For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement, the amount described in the foregoing clauses (iii)(1)(x) and (iii)(1)(y) are calculated without giving effect to any Incremental Term Facilities incurred on a substantially concurrent basis in reliance on the foregoing clause (iii)(2).  Each Incremental Term Facility shall be in an integral multiple of $1,000,000 and be in an aggregate principal amount that is not less than $10,000,000, provided that such amount may be less than $10,000,000 if such amount represents all the remaining availability under the aggregate principal amount of Incremental Term Facilities set forth above.

 

(b)                                  Each Incremental Term Facility (i) if made part of the existing Tranche of Term Loans, shall have terms identical to those applicable to such Term Loans or (ii) if consisting of an additional Tranche of Term Loans, shall have such terms as determined by the Borrower and the Incremental Lenders providing such Incremental Term Facility; provided that such additional Tranche of Term Loans shall have terms and conditions (excluding pricing, fees, rate floors and optional prepayment or redemption terms) substantially identical to, or (taken as a whole) no more favorable (as reasonably determined by the Borrower) to the Incremental Lenders providing such additional Tranche of Term Loans than, those applicable to the Initial Term Loans (except to the extent (1) such terms are conformed (or added) in this Agreement for the benefit of the Lenders hereunder pursuant to an amendment hereto subject solely to the reasonable satisfaction of the Administrative Agent (it being understood that to the extent that any financial maintenance covenant is added for the benefit of any additional Tranche of Term Loans, no consent shall be required from the Administrative Agent to the extent that such financial maintenance covenant is also added for the benefit of the Lenders hereunder) or (2) applicable solely to periods after the Latest Maturity Date).  Each Incremental Term Facility shall be secured on a pari passu basis with or junior basis to the Liens securing the Obligations or shall be unsecured or shall be subordinated in right of payment to the Obligations.  No

 

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Restricted Subsidiary shall be a guarantor with respect to any Incremental Term Facility unless such Restricted Subsidiary is a Loan Party which shall have previously or substantially concurrently guaranteed the Obligations and the obligations in respect of such Incremental Term Facility shall not be secured by Liens on the assets of the Borrower and the Restricted Subsidiaries other than assets constituting Collateral.  No Incremental Term Facility secured on a pari passu basis with the Liens securing the Obligations shall have a final maturity date earlier than the then existing Latest Maturity Date.  No Incremental Term Facility that is secured on a junior basis to the Liens securing the Obligations or that is unsecured or subordinated in right of payment to the Obligations shall have a final maturity date earlier than 91 days after the then existing Latest Maturity Date, and shall have no greater amortization or mandatory prepayments than the then-remaining Initial Term Loans.  No Incremental Term Facility shall have a Weighted Average Life to Maturity that is shorter than the Weighted Average Life to Maturity of the then-remaining Initial Term Loans (without giving effect to nominal amortization for periods where amortization has been eliminated as a result of a prepayment of the applicable Term Loans.  Subject to the foregoing, Incremental Term Facilities secured on a pari passu basis with the Liens securing the Obligations shall have amortization as determined by the Borrower and the applicable Incremental Lenders.  Incremental Term Facilities secured on a pari passu basis with the Liens securing the Obligations shall ratably in any mandatory prepayments of Term Loans unless the Borrower and the applicable Incremental Lenders agree to a less than pro rata share of such mandatory prepayments.

 

(c)                                   Each notice from the Borrower pursuant to this Section 2.4 shall set forth the requested amount and proposed terms of the relevant Incremental Term Facility.  Any additional bank, financial institution, existing Lender or other Person that elects to provide Incremental Term Commitments under an Incremental Term Facility shall be reasonably satisfactory to the Administrative Agent (to the extent such consent would be required for an assignment of such Loans or Commitments pursuant to Section 10.6, such consent not to be unreasonably withheld or delayed) (any such bank, financial institution, existing Lender or other Person being called an “ Incremental Lender ”) and the Borrower and, if not already a Lender, shall become a Lender under this Agreement pursuant to an amendment (an “ Incremental Amendment ”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, the other Loan Parties, such Incremental Lender (in the case of this Agreement and, as appropriate, any other Loan Document, as applicable) and, to the extent it directly adversely amends or modifies the rights or duties of the Administrative Agent and/or the Collateral Agent, the Administrative Agent and/or the Collateral Agent; provided that if the relevant Incremental Term Facility is not secured on a pari passu basis with the Liens securing the Obligations in respect of the then existing Term Loans, it will be documented pursuant to documentation separate from this Agreement and the Loan Documents, as applicable, and, to the extent such Incremental Term Facility is secured by liens on the Collateral, the agent, representative or trustee in respect of such Incremental Term Facility shall become a party to an intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent.  No Lender shall be obligated to provide any Incremental Term Commitments under an Incremental Term Facility, unless it so agrees.  Incremental Term Commitments in respect of any Incremental Term Facilities shall become Commitments under this Agreement.  An Incremental Amendment may, without the consent of any other Lenders, effect such amendments to any Loan Documents as may be necessary, advisable or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.4.  The Lenders hereby

 

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irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents with the Loan Parties as may be necessary in order to establish new Tranches or sub-tranches in respect of Term Loans made pursuant to this Section 2.4 and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new Tranches or sub-tranches, in each case on terms consistent with this Section 2.4, including any amendments that are not adverse to the interests of any Lender that are made to effectuate changes necessary to enable any Incremental Term Loans to be fungible for United States federal income tax purposes with another Tranche of Term Loans, which shall include any amendments that do not reduce the ratable amortization received by each Lender thereunder.  The effectiveness of any Incremental Amendment shall, unless otherwise agreed to by the applicable Incremental Lenders, be subject to the satisfaction (or waiver) on the date thereof of the express conditions in respect of such Incremental Amendment to be mutually agreed upon by the applicable Incremental Lenders and the Borrower.  The proceeds of any Loans under an Incremental Term Facility will be used, directly or indirectly, for working capital and/or general corporate purposes and/or any other purposes not prohibited hereunder.  This Section 2.4 shall supersede any provisions in Section 10.1 to the contrary.

 

(d)                                  In connection with the effectiveness of any Incremental Term Facility, to the extent reasonably requested by the Administrative Agent, the Administrative Agent shall have received (i) customary legal opinions addressed to the Administrative Agent, the Collateral Agent and the Lenders, board resolutions and officers’ certificates in form and substance reasonably satisfactory to the Administrative Agent and (ii) reaffirmation agreements and/or such amendments to the Security Documents (including modifications to the Mortgages), as may be reasonably requested by the Administrative Agent in order to ensure that the enforceability of the Security Documents and the perfection and priority of the Liens thereunder are preserved and maintained.

 

2.5.                             Fees .

 

(a)                                  The Borrower shall pay to the Agents such fees as shall have been separately agreed upon in writing in the amounts and at times specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever (except as expressly agreed between the Borrower and the applicable Agent).

 

(b)                                  The Borrower agrees to pay on the Effective Date to each Initial Term Lender party to this Agreement as an Initial Term Lender on the Effective Date, as fee compensation for the funding of such Initial Term Lender’s Initial Term Loans, a closing fee in an amount equal to 1.0% of the stated principal amount of such Initial Term Lender’s Initial Term Loans, payable to such Initial Term Lender from the proceeds of its Initial Term Loans as and when funded on the Effective Date.  Such closing fees shall be in all respects fully earned, due and payable on the Effective Date and non-refundable and non-creditable thereafter.

 

2.6.                             Refinancing Amendments . At any time after the Effective Date, the Borrower may obtain from any existing Lender or any other Person reasonably satisfactory to the Borrower (subject to the prior written consent of the Administrative Agent to the extent such consent would be required for an assignment of Term Loans to such other Person pursuant to

 

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Section 10.6) (any such existing Lender or other Person being called an “ Additional Refinancing Lender ”) Credit Agreement Refinancing Indebtedness in respect of all or any portion of the Term Loans then outstanding under this Agreement (which will be deemed to include any then outstanding Other Term Loans constituting Term Loans), in the form of Other Term Loans, in each case pursuant to a Refinancing Amendment; provided that (i) such Credit Agreement Refinancing Indebtedness shall rank pari passu in right of payment and of security with the other Term Loans and Commitments hereunder, (ii) such Credit Agreement Refinancing Indebtedness shall only be secured by assets consisting of Collateral, and (iii) such Credit Agreement Refinancing Indebtedness satisfies the requirements set forth in clauses (v) through (z) of the definition of Credit Agreement Refinancing Indebtedness.  The effectiveness of any Refinancing Amendment shall be subject to such express conditions as are mutually agreed with the participating Additional Refinancing Lenders.  Each Tranche of Credit Agreement Refinancing Indebtedness (other than in connection with an extension of the maturity of Term Loans) incurred under this Section 2.6 shall be in an integral multiple of $1,000,000 and be in an aggregate principal amount that is not less than $10,000,000, provided that such amount may be less than $10,000,000 if such amount represents all the remaining availability under the aggregate principal amount of Credit Agreement Refinancing Indebtedness set forth above.  The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Refinancing Amendment.  Each of the parties hereto hereby agrees that, upon the effectiveness of any Refinancing Amendment, this Agreement shall be deemed amended to the extent (but only to the extent) necessary or reasonably advisable to reflect the existence and terms of the Credit Agreement Refinancing Indebtedness incurred pursuant thereto (including any amendments necessary to treat the Loans subject thereto as Other Term Loans).  Any Refinancing Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary, or reasonably advisable or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.6.  This Section 2.6 shall supersede any provisions in Section 10.1 to the contrary.

 

SECTION 3.  GENERAL PROVISIONS APPLICABLE TO LOANS

 

3.1.                             Optional Prepayments . The Borrower may at any time and from time to time prepay the Term Loans, in whole or in part, without premium or penalty (other than as set forth in Section 3.2(f) below), upon notice delivered to the Administrative Agent no later than 12:00 Noon, New York City time (or such later time as the Administrative Agent may agree), three (3) Business Days prior thereto (or such shorter time as the Administrative Agent may agree), in the case of LIBOR Rate Loans, and no later than 12:00 Noon, New York City time (or such later time as the Administrative Agent may agree), one (1) Business Day prior thereto, in the case of ABR Loans, which notice shall specify the date and amount of prepayment, whether the prepayment is of LIBOR Rate Loans or ABR Loans, the Tranche of Term Loans to which the prepayment applies and the manner in which such prepayment is to be applied to the applicable Tranche of Term Loans; provided , that if a LIBOR Rate Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 3.11. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to such date on the amount prepaid. Partial prepayments of LIBOR Rate Loans shall be in an

 

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aggregate principal amount of $500,000 or integral multiples of $100,000 in excess thereof. Partial prepayments of ABR Loans shall be in an aggregate principal amount of $250,000 or integral multiples of $100,000 in excess thereof. Notwithstanding the foregoing, a notice of prepayment delivered by Borrower in accordance with this Section 3.1 may expressly state that such notice is conditioned upon the effectiveness of new credit facilities or other sources of refinancing or another transaction, in which case such notice may be revoked by the Borrower (by written notice to the Administrative Agent on or prior to the time on which the Term Loans would have been repaid in accordance with such notice of prepayment) if such condition is not satisfied.

 

3.2.                             Mandatory Prepayments; Termination of Commitments; Prepayment Premium .

 

(a)                                  If any Indebtedness shall be incurred or issued by any Group Member after the Effective Date (other than Excluded Indebtedness except for Credit Agreement Refinancing Indebtedness), an amount equal to 100% of the Net Cash Proceeds thereof shall be applied no later than the third Business Day following on the date of such incurrence or issuance toward the prepayment of the Term Loans (without premium or penalty (other than as set forth in Section 3.2(f) below)) as set forth in Section 3.2(d).

 

(b)                                  If on any date any Group Member shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be applied no later than the fifth Business Day following the date of the receipt of such Net Cash Proceeds toward the prepayment of the Term Loans as set forth in Section 3.2(d); provided , that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the prepayment of the Term Loans as set forth in Section 3.2(d); provided , further that if at the time that any such prepayment would be required hereunder, the Borrower is required to offer to repurchase or prepay any other Indebtedness secured by the Collateral on a pari passu basis with the Obligations pursuant to the terms of the documentation governing such Indebtedness with such Net Cash Proceeds (such Indebtedness required to be offered to be so repurchased or prepaid, “ Other Applicable Indebtedness ”), then the Borrower may apply such amount otherwise required to be applied as a prepayment pursuant to this Section 3.2(b) on a pro rata basis to the prepayment of the Term Loans and to the repurchase or prepayment of the Other Applicable Indebtedness (determined on the basis of the aggregate outstanding principal amount of the Term Loans and Other Applicable Indebtedness (or accreted amount if such Other Applicable Indebtedness is issued with original issue discount) at such time; provided that the portion of such amount otherwise required to be applied as a prepayment pursuant to this Section 3.2(b) allocated to the Other Applicable Indebtedness shall not exceed the amount of such Net Cash Proceeds required to be allocated to the Other Applicable Indebtedness pursuant to the terms thereof, and the remaining amount, if any, of such amount otherwise required to be applied as a prepayment pursuant to this Section 3.2(b) shall be allocated to the Term Loans in accordance with the terms hereof), and the amount of prepayment of the Term Loans that would have otherwise been required pursuant to this Section 3.2(b) shall be reduced accordingly; provided , further , that to the extent the holders of the Other Applicable Indebtedness decline to have such Indebtedness prepaid or repurchased, the declined amount shall promptly (and in any event within ten Business Days after the date of such rejection) be applied to prepay the Term Loans (without premium or penalty (other than as set forth in Section 3.2(f) below)) in accordance with the terms hereof.

 

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(c)                                   The Borrower shall, on each Excess Cash Flow Application Date, apply the ECF Percentage of the excess, if any, of (i) Excess Cash Flow for the related Excess Cash Flow Payment Period minus (ii) the amount (such amount, the “ Voluntary Prepaid Amount ”) of all Voluntary Prepayments (excluding any such Voluntary Prepayment made with the proceeds of long-term Indebtedness), repurchases of Offer Loans (limited to the amount of cash actually paid in respect of such repurchase and excluding any such repurchase made with the proceeds of long-term Indebtedness) and repurchases of Term Loans in the open market by the Borrower or any of its Subsidiaries pursuant to Section 10.6(b)(v) (limited to the amount of cash actually paid in respect of such repurchase and excluding any such repurchase made with the proceeds of long-term Indebtedness) made during such Excess Cash Flow Payment Period or the period following end of the applicable fiscal year and prior to the applicable Excess Cash Flow Application Date (without duplication in the next Excess Cash Flow Payment Period), toward the prepayment of the Term Loans as set forth in Section 3.2(d). Each such prepayment shall be made on a date (an “ Excess Cash Flow Application Date ”) no later than ten (10) days after the date on which the financial statements referred to in Section 6.1(a) for the fiscal year of the Borrower with respect to which such prepayment is made are required to be delivered to the Lenders (commencing with the fiscal year of the Borrower ending December 31, 2018).  If at the time that any such prepayment would be required hereunder, the Borrower is required to offer to repurchase or prepay any Other Applicable Indebtedness pursuant to the terms of the documentation governing such Other Applicable Indebtedness with such Excess Cash Flow, then the Borrower may apply such amount otherwise required to be applied as a prepayment pursuant to this Section 3.2(c) on a pro rata basis to the prepayment of the Term Loans and to the repurchase or prepayment of the Other Applicable Indebtedness (determined on the basis of the aggregate outstanding principal amount of the Term Loans and Other Applicable Indebtedness (or accreted amount if such Other Applicable Indebtedness is issued with original issue discount) at such time; provided that the portion of such amount otherwise required to be applied as a prepayment pursuant to this Section 3.2(c) allocated to the Other Applicable Indebtedness shall not exceed the amount of such Excess Cash Flow required to be allocated to the Other Applicable Indebtedness pursuant to the terms thereof, and the remaining amount, if any, of such amount otherwise required to be applied as a prepayment pursuant to this Section 3.2(c) shall be allocated to the Term Loans in accordance with the terms hereof), and the amount of prepayment of the Term Loans that would have otherwise been required pursuant to this Section 3.2(c) shall be reduced accordingly; provided , further , that to the extent the holders of the Other Applicable Indebtedness decline to have such Indebtedness prepaid or repurchased, the declined amount shall promptly (and in any event within ten Business Days after the date of such rejection) be applied to prepay the Term Loans (without premium or penalty (other than as set forth in Section 3.2(f) below)) in accordance with the terms hereof.

 

(d)                                  Amounts to be applied in connection with prepayments made pursuant to this Section 3.2 shall be applied to the prepayment of the Term Loans in accordance with Section 3.8. The application of any prepayment pursuant to this Section 3.2 shall be made, first, to ABR Loans and, second, to LIBOR Rate Loans. Each prepayment of the Term Loans under this Section 3.2 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.

 

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(e)                                   The Initial Term Commitments of each Initial Term Lender shall terminate in their entirety upon the funding of the Initial Term Loans on the Effective Date.

 

(f)                                    Prepayment Premium. In the event that, on or prior to the date that occurs six months following the Effective Date, the Borrower (x) makes any prepayment of any Initial Term Loans in connection with any Repricing Transaction or (y) effects any amendment of this Agreement resulting in a Repricing Transaction with respect to the Initial Term Loans, the Borrower shall pay to the Administrative Agent, for the ratable account of each Initial Term Lender, (i) in the case of clause (x), a prepayment premium of 1% of the amount of the Initial Term Loans being prepaid and (ii) in the case of clause (y), a payment equal to 1% of the aggregate amount of the Initial Term Loans that are subject to such amendment.

 

(g)                                   Notwithstanding any other provisions of this Section 3.2, (i) to the extent that any or all of the Net Cash Proceeds of any Asset Sale, Recovery Event or issuance or incurrence of Indebtedness attributable to a Foreign Subsidiary (“ Foreign Proceeds ”) or Excess Cash Flow attributable to Foreign Subsidiaries (“ Foreign Subsidiary Excess Cash Flow ”) are prohibited or delayed by applicable local law from being distributed to any Loan Party, the portion of such Net Cash Proceeds or Excess Cash Flow so affected will not be required to be applied to repay Term Loans at the times provided in this Section 3.2 but may be retained by the applicable Foreign Subsidiary so long, but only so long, as the applicable local law will not permit distribution to any Loan Party (the Borrower hereby agreeing to use commercially reasonable efforts (i) to cause the applicable Foreign Subsidiary to take all actions reasonably required by the applicable local law to permit such distribution and/or (ii) to use other cash resources of the Borrower and the Restricted Subsidiaries that would not be subject to such applicable local law), and if, within one year following the date on which the respective prepayment would otherwise have been required, any of such affected Foreign Proceeds or Foreign Subsidiary Excess Cash Flow that, in each case, would otherwise be required to be used to prepay Term Loans pursuant to Section 3.2, is permitted under the applicable local law to be distributed to any Loan Party, such distribution will be promptly made and such distributed Foreign Proceeds or Foreign Subsidiary Excess Cash Flow will be promptly (and in any event not later than two Business Days after such distribution) applied (net of additional taxes payable or reserved against as a result thereof) to the repayment of the Term Loans pursuant to this Section 3.2 (it being understood and agreed that if such prepayment is not made by the one-year anniversary of the date on which such prepayment would otherwise have been required, that such prepayment shall be forgiven subject to the penultimate sentence of this clause (g)) and (ii) to the extent that the Borrower has determined in good faith that distribution of any Foreign Proceeds or Foreign Subsidiary Excess Cash Flow to a Loan Party would have material adverse tax cost consequences to the Borrower and its Subsidiaries, such Foreign Proceeds or Foreign Subsidiary Excess Cash Flow so affected may be retained by the applicable Foreign Subsidiary so long, but only so long, as the distribution of such Foreign Proceeds or Foreign Subsidiary Excess Cash Flow would have material adverse tax consequences to the Borrower and its Subsidiaries (the Borrower hereby agreeing to use commercially reasonable efforts to take all actions reasonably required to minimize the tax consequences of such distribution), and if, within one year following the date on which the respective prepayment would otherwise have been required, any of such affected Foreign Proceeds or Foreign Subsidiary Excess Cash Flow that, in each case, would otherwise be required to be used to prepay Term Loans pursuant to Section 3.2, is able to be distributed to any Loan Party without resulting in material adverse tax consequences to the

 

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Borrower and its Subsidiaries, such distribution will be promptly made and such distributed Foreign Proceeds or Foreign Subsidiary Excess Cash Flow will be promptly (and in any event not later than two Business Days after such distribution) applied (net of additional taxes payable or reserved against as a result thereof) to the repayment of the Term Loans pursuant to this Section 3.2 (it being understood and agreed that if such prepayment is not made by the one-year anniversary of the date on which such prepayment would otherwise have been required, that such prepayment shall be forgiven subject to the penultimate sentence of this clause (g)).  Notwithstanding the foregoing, if at any time within one year after any prepayment being forgiven as a result of the foregoing provisions, the applicable local law no longer would prohibit or delay such Foreign Proceeds or Foreign Subsidiary Excess Cash Flow from being distributed to any Loan Party or the distribution of such Foreign Proceeds or Foreign Subsidiary Excess Cash Flow to a Loan Party would no longer have material adverse tax cost consequences to the Borrower and its Subsidiaries, such distribution will be promptly made and such distributed Foreign Proceeds or Foreign Subsidiary Excess Cash Flow will be promptly (and in any event not later than two Business Days after such distribution) applied (net of additional taxes payable or reserved against as a result thereof) to the repayment of the Term Loans pursuant to this Section 3.2.  The non-application of any such Foreign Proceeds or Foreign Subsidiary Excess Cash Flow as a result of the foregoing provisions will not constitute a Default or Event of Default and such amounts shall be available for working capital purposes of the Borrower and the Restricted Subsidiaries so long as not required to be applied as a prepayment in accordance with the foregoing provisions.

 

(h)                                  Notwithstanding anything herein to the contrary, in the event that the Borrower is required to make any mandatory prepayment (other than pursuant to Section 3.2(a) in connection with the incurrence of Credit Agreement Refinancing Indebtedness) (a “ Waivable Mandatory Prepayment ”) of the Term Loans, not less than three Business Days prior to the date (the “ Required Prepayment Date ”) on which the Borrower is required to make such Waivable Mandatory Prepayment, the Borrower shall notify the Administrative Agent of the amount of such prepayment, and the Administrative Agent will promptly thereafter notify each Lender holding an outstanding Term Loan of the amount of such Lender’s pro rata share 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 and the Administrative Agent of its election to do so (such declined amounts, “ Retained Declined Proceeds ”) on or before the Business Day immediately prior to the Required Prepayment Date (it being understood that any Lender which does not notify the Borrower and the Administrative Agent of its election to exercise such option on or before the Business Day immediately prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option).  Any such Retained Declined Proceeds shall be included in the Available Amount as described in the definition thereof.

 

3.3.                             Conversion and Continuation Options .

 

(a)                                  The Borrower may elect from time to time to convert LIBOR Rate Loans to ABR Loans by giving the Administrative Agent prior irrevocable notice of such election in the form attached hereto as Exhibit G (or any other form approved by the Borrower and the Administrative Agent) no later than 12:00 Noon, New York City time (or such later time as the Administrative Agent may agree), on the Business Day preceding the proposed conversion date;

 

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provided that any such conversion of LIBOR Rate Loans may only be made on the last day of an Interest Period with respect thereto unless the Borrower shall have paid any amounts owing pursuant to Section 3.11. The Borrower may elect from time to time to convert ABR Loans to LIBOR Rate Loans by giving the Administrative Agent prior irrevocable notice of such election no later than 12:00 Noon, New York City time (or such later time as the Administrative Agent may agree), on the third Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefor); provided that no ABR Loan may be converted into a LIBOR Rate Loan when any Event of Default has occurred and is continuing and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such conversions. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

 

(b)                                  Any LIBOR Rate Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term Interest Period set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans; provided that no LIBOR Rate Loan may be continued as such when any Event of Default has occurred and is continuing and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such continuations; and provided , further , that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

 

3.4.                             Limitations on LIBOR Tranches . Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of LIBOR Rate Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the LIBOR Rate Loans comprising each LIBOR Tranche shall be equal to $500,000 or integral multiples of $100,000 in excess thereof and (b) no more than ten (10) LIBOR Tranches shall be outstanding at any one time.

 

3.5.                             Interest Rates and Payment Dates .

 

(a)                                  Each LIBOR Rate Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the LIBOR Rate determined for such day plus the Applicable Margin.

 

(b)                                  Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

 

(c)                                   If the Borrower shall default in the payment of the principal or interest on any Term Loan or any other amount becoming due hereunder, by acceleration or otherwise, or under any other Loan Document (or including, as a result of an Event of Default under Sections 8(a) or (f)), the Borrower shall pay interest on any such defaulted amount at a rate per annum equal to (i) in the case of Term Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2%, and (ii) in the case of any such other amounts, the non-default rate then applicable to ABR Loans plus 2%.

 

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(d)                                  Interest shall be payable in arrears on each Interest Payment Date; provided that interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand.

 

(e)                                   Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Requirements of Law (the “ Maximum Rate ”). If any Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Term Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by an Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Requirements of Law, (i) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

 

3.6.                             Computation of Interest and Fees .

 

(a)                                  Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to ABR Loans the rate of interest on which is calculated on the basis of clause (a) of the definition of ABR, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a LIBOR Rate.  Any change in the interest rate on a Loan resulting from a change in the ABR or Statutory Reserves shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate.

 

(b)                                  Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, promptly deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 3.6(a).

 

3.7.                             Inability to Determine Interest Rate . If prior to the first day of any Interest Period:

 

(a)                                  the Administrative Agent shall have reasonably determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the LIBOR Rate for such Interest Period, or

 

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(b)                                  the Administrative Agent shall have received notice from the Required Lenders that the LIBOR Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as reasonably determined and conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period,

 

the Administrative Agent shall give written notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter but at least two (2) Business Days prior to the first day of such Interest Period. If such notice is given (x) any Term Loans that were to have been converted on the first day of such Interest Period to LIBOR Rate Loans shall be continued as ABR Loans and (y) any outstanding LIBOR Rate Loans shall be converted, on the last day of the then-current Interest Period, to ABR Loans. Until such notice has been withdrawn by the Administrative Agent (which notice the Administrative Agent agrees to withdraw promptly upon a determination that the condition or situation which gave rise to such notice no longer exists), no further LIBOR Rate Loans shall be made or continued as such, nor shall the Borrower have the right to convert Loans to LIBOR Rate Loans.

 

3.8.                             Pro Rata Treatment; Application of Payments; Payments .

 

(a)                                  Each borrowing by the Borrower of a given Tranche from the Lenders hereunder and any reduction of the Commitments of the Lenders in respect of such Tranche shall be allocated ratably among the relevant Lenders in respect of such Tranche.

 

(b)                                  Except for mandatory prepayments of Term Loans pursuant to Section 3.2, optional prepayments of Term Loans pursuant to Section 3.1, repurchases of Offer Loans pursuant to Section 10.6(b)(v) and repurchases of Term Loans in the open market pursuant to Section 10.6(b)(v), each payment on account of principal of and interest on any Tranche of Term Loans shall be applied pro rata within each such Tranche to the Term Loans constituting such Tranche.  Each mandatory prepayment of Term Loans pursuant to Section 3.2 shall be applied pro rata to each Tranche of Term Loans (and pro rata within each such Tranche to the Term Loans constituting such Tranche); provided that the Lenders providing any given Tranche of Term Lenders may elect to receive less (but not more) than their pro rata share of such mandatory prepayments.  Optional prepayments pursuant to Section 3.1 shall be applied ratably to the outstanding principal amount of the Tranche of Term Loans specified by the Borrower in the applicable notice of prepayment (and shall be applied pro rata within each such Tranche to the Term Loans constituting such Tranche).  Repurchases of Offer Loans pursuant to Section 10.6(b)(v) shall be applied to the Tranche of Terms specified by the Borrower in the notice referred to in Section 10.6(b)(v)(B) and shall be applied to the applicable Term Loans of such Tranche in accordance with the procedures specified in such Section 10.6(b)(v).  Repurchases of Term Loans in the open market pursuant to Section 10.6(b)(v) shall be applied to the Term Loans so repurchased by the Borrower or its applicable Subsidiary.  The amount of each optional and mandatory principal prepayment of the Term Loans shall be applied to reduce the then remaining installments of the Term Loans as specified by the Borrower in the applicable notice of prepayment (or, if no such direction is given, shall be applied to the applicable remaining installments in direct order of maturity). Amounts repaid or prepaid on account of the Term Loans may not be reborrowed.

 

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(c)                                   All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 12:00 Noon, New York City time (or such later time as the Administrative Agent may agree), on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the applicable Lenders promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

 

(d)                                  Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may (but shall not be required to), in reliance upon such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three (3) Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

 

3.9.                             Requirements of Law .

 

(a)                                  If the adoption of, taking effect of or any change in any Requirement of Law or in the administration, interpretation or application thereof or compliance by any Lender with any request, guideline or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the Effective Date (and, for purposes of this Agreement, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to have gone into effect and adopted subsequent and adopted subsequent to the Effective Date, regardless of the date enacted, adopted or issued):

 

(i)                                      shall subject any Lender to any Tax of any kind whatsoever (other than Excluded Taxes, Indemnified Taxes and Other Taxes which shall be governed exclusively by Section 3.10), with respect to this Agreement or any other Loan Document;

 

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(ii)                                   shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the LIBOR Rate hereunder; or

 

(iii)                                shall impose on such Lender or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Rate Loans made by such Lender;

 

and the result of any of the foregoing is to increase the cost to such Lender of making, converting into, continuing or maintaining LIBOR Rate Loans or, with respect to Taxes under clause (i) above, any Term Loan, or to reduce any amount receivable hereunder in respect thereof (whether of principal, interest or any other amount), then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled and setting forth in reasonable detail such increased costs.

 

(b)                                  If any Lender shall have determined that the adoption of, taking effect of or any change in any Requirement of Law regarding capital adequacy or liquidity requirements or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy or liquidity requirements (whether or not having the force of law) from any Governmental Authority made subsequent to the Effective Date (and, for purposes of this Agreement, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to have gone into effect and adopted subsequent and adopted subsequent to the Effective Date, regardless of the date enacted, adopted or issued) shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy or liquidity requirements), then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request therefor setting forth in reasonable detail the charge and the calculation of such reduced rate of return, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

 

(c)                                   A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. 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 the Borrower shall not be required to compensate a

 

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Lender pursuant to this Section for any amounts incurred more than one hundred and eighty (180) days prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such one hundred and eighty (180)-day period shall be extended to include the period of such retroactive effect.  The provisions of this Section 3.9 shall survive and remain in full force and effect regardless of the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the consummation of the transactions contemplated hereby, the Payment in Full, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof. The Borrower shall pay the Lender the amount shown as due on any certificate referred to above within ten (10) days after receipt thereof.

 

(d)                                  For purposes of this Section 3.9, the term “Lender” shall include the Administrative Agent.

 

3.10.                      Taxes .

 

(a)                                  Payments Free of Indemnified Taxes and Other Taxes . Any and all payments by or on account of any obligation of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Taxes, provided that, if any applicable withholding agent shall be required by applicable Requirements of Law to deduct or withhold any Taxes from such payments, then (i) the applicable withholding agent shall be entitled to make such deductions or withholdings (ii) the applicable withholding agent shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Requirements of Law, and (iii) if such Tax is an Indemnified Tax, the sum payable by the applicable Loan Party shall be increased as necessary so that after all required deductions or withholdings have been made (including deductions applicable to additional sums payable under this Section 3.10) the applicable Agent or Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions or withholdings been made.

 

(b)                                  Payment of Other Taxes by the Loan Parties . Without limiting the provisions of subsection (a) above, the Loan Parties shall timely pay any Other Taxes to the relevant Governmental Authority (or at the option of the Administrative Agent, timely reimburse it for the payment of, any Other Taxes) in accordance with applicable Requirements of Law, except for any Other Taxes imposed on any assignment of or participation with respect to a Lender’s rights or obligations hereunder pursuant to Section 10.6 if such Tax is imposed as a result of the Lender having a present or former connection with the jurisdiction imposing such Tax (other than a connection arising solely from having executed, delivered, enforced, become a party to, performed its obligations, received payments, received or perfected a security interest under, and/or engaged in any other transaction pursuant to, any Loan Document).

 

(c)                                   Indemnification by the Loan Parties . The Loan Parties shall jointly and severally indemnify each Agent and Lender, within 10 Business Days after written demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed on or attributable to amounts payable under this Section 3.10) imposed on, payable by or required to be withheld or deducted from a payment to such Agent or Lender, as the case may be, with

 

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respect to this Agreement or any other Loan Document, and reasonable expenses arising therefrom, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth the amount of such payment or liability (together with a copy of any applicable documents from the IRS or other Governmental Authority that asserts such claim) delivered to the Borrower by a Lender (with a copy to the relevant Agent), or by an Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d)                                  Evidence of Payments . As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority, the Borrower shall deliver to the Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment or other evidence of such payment reasonably satisfactory to the Agent.

 

(e)                                   Status of Lenders .

 

(i)                                      Each Lender shall deliver to the Borrower and to the Administrative Agent, whenever reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Requirements of Law and such other reasonably requested information as will permit the Borrower or the Administrative Agent, as the case may be, (A) to determine whether or not payments made hereunder or under any other Loan Document are subject to Taxes, (B) to determine, if applicable, the required rate of withholding or deduction and (C) to establish such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of any payments to be made to such Lender pursuant to any Loan Document or otherwise to establish such Lender’s status for withholding tax purposes (including backup withholding and information reporting requirements) in an applicable jurisdiction. If any form, certification or other documentation provided by a Lender pursuant to this Section 3.10(e) (including any of the specific documentation described below) or Section 3.10(f) expires or becomes obsolete or inaccurate in any respect, such Lender shall promptly notify the Borrower and the Administrative Agent in writing and shall promptly update or otherwise correct the affected documentation or promptly notify the Borrower and the Administrative Agent in writing that such Lender is not legally eligible to do so. Notwithstanding anything to the contrary in this Section 3.10(e), the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.10(e)(ii)(A), Section 3.10(e)(ii)(B)(i)-(iv) and 3.10(f) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(ii)                                   Without limiting the generality of the foregoing,

 

(A)                                any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent duly completed and executed copies of IRS Form W-9 (in such number of signed originals as shall be requested by the recipient) on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon reasonable request of the Borrower or the Administrative Agent) certifying that such Lender is exempt from U.S. federal backup withholding tax; and

 

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(B)                                each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of U.S. federal withholding tax with respect to any payments hereunder or under any other Loan Document shall deliver to the Borrower and the Administrative Agent (in such number 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 or the Administrative Agent), duly completed and executed copies of whichever of the following is applicable:

 

(i)                                      IRS Form W-8BEN or W-8BEN-E (or any successor thereto) claiming eligibility for benefits of an income tax treaty to which the United States is a party;

 

(ii)                                   IRS Form W-8ECI (or any successor thereto) claiming that specified payments (as applicable) under this Agreement or any other Loan Documents (as applicable) constitute income that is effectively connected with such Foreign Lender’s conduct of a trade or business in the United States, or if applicable, IRS Form W-8EXP;

 

(iii)                                in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Sections 881(c) or 871(h) of the Code (the “ Portfolio Interest Exemption ”), (x) a Tax Status Certificate, substantially in the form of Exhibit D-1, to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower, within the meaning of Section 881(c)(3)(B) of the Code or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code, and that no interest to be received is effectively connected with a U.S. trade or business and (y) IRS Form W-8BEN or W-8BEN-E (or any successor thereto);

 

(iv)                               where such Lender is a partnership (for U.S. federal income tax purposes) or otherwise not a beneficial owner (e.g., where such Lender has sold a participation), IRS Form W-8IMY (or any successor thereto) and all required supporting documentation (including, where one or more of the underlying beneficial owner(s) is claiming the benefits of the Portfolio Interest Exemption, a Tax Status Certificate of such beneficial owner(s) in the form of Exhibit D-3 or D-4, as applicable, (provided that, if the Foreign Lender is a partnership and not a participating Lender, the Tax Status Certificate in the form of Exhibit D-2 from the beneficial owner(s) may be provided by the Foreign Lender on behalf of the beneficial owner(s)); or

 

(v)                                  any other form prescribed by applicable Requirements of Law as a basis for claiming exemption from or a reduction in United States federal withholding tax together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit the Borrower or the Agent to determine the withholding or deduction required to be made.

 

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Notwithstanding anything to the contrary in this Section 3.10(e), no Lender shall be required to deliver any documentation pursuant to this Section 3.10(e) that it is not legally eligible to provide.

 

(f)                                    FATCA . 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 and the Administrative Agent, at the time or times prescribed by applicable Requirements of Law and otherwise at such times reasonably requested by the Borrower or the Administrative Agent, such documentation prescribed by applicable Requirements of Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower 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 Section 3.10(f), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(g)                                   If any Agent or Lender determines, in its good faith discretion, that it has received a refund (whether received in cash or applied as an offset against other Taxes due) of any Indemnified Taxes or Other Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section 3.10, it shall promptly pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by any Loan Party under this Section 3.10 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Agent or Lender (including any Taxes), as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that, the Borrower, upon the request of such Agent or Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Agent or Lender in the event such Agent or Lender is required to repay such refund to such Governmental Authority. Such Lender or Agent, as the case may be, shall, at the Borrower’s reasonable request, provide the Borrower with a copy of any notice of assessment or other evidence reasonably satisfactory to the Borrower of the requirement to repay such refund received from the relevant taxing authority. Notwithstanding anything to the contrary in this Section 3.10(g), in no event will an Agent or Lender be required to pay any amount the Borrower pursuant to this Section 3.10(g) the payment of which would place such Agent or Lender in a less favorable net after-Tax position than it would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This Section 3.10(g) shall not be construed to require any Agent or Lender to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person.

 

(h)                                  The provisions of this Section 3.10 shall survive and remain in full force and effect regardless of the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the consummation of the transactions contemplated hereby, the Payment in Full, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

 

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3.11.                      Indemnity . The Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss, cost or expense (excluding loss of anticipated profits) that such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of LIBOR Rate Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from LIBOR Rate Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of, or a conversion from, LIBOR Rate Loans on a day that is not the last day of an Interest Period with respect thereto. A certificate setting forth in reasonable detail the basis for requesting such amount actually incurred as to any amounts payable pursuant to this Section submitted to the Borrower by any Lender shall be conclusive in the absence of manifest error. The provisions of this Section 3.11 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the Payment in Full, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

 

3.12.                      Change of Lending Office . Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 3.9 or requires a Loan Party to pay Indemnified Taxes or additional amounts pursuant to Section 3.10(a), (b) or (c) with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Term Loans affected by such event with the object of avoiding the consequences of such event; provided , that such designation is made on terms that, in the sole judgment of such Lender, (i) would eliminate or reduce amounts payable pursuant to Section 3.9 or Section 3.10, as the case may be, in the future and (ii) cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage or any unreimbursed costs or expenses; and provided , further , that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 3.9 or 3.10(a), (b) or (c). The Borrower hereby agrees to pay all reasonable, documented out-of-pocket costs and expenses incurred by any Lender in connection with any such designation.

 

3.13.                      Replacement of Lenders . The Borrower shall be permitted to replace any Lender that (a) requests reimbursement for amounts owing pursuant to Section 3.9 or 3.10(a) (such Lender, an “ Affected Lender ”), (b) is a Non-Consenting Lender or (c) is a Defaulting Lender, with a replacement financial institution or other entity; provided that (i) such replacement does not conflict with any Requirement of Law, (ii) in the case of an Affected Lender, prior to any such replacement, such Lender shall have taken no action under Section 3.12 that have actually eliminated the continued need for payment of amounts owing pursuant to Section 3.9 or 3.10(a), (iii) the replacement financial institution or entity shall purchase, at par, all Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (iv) the Borrower shall be liable to such replaced Lender under Section 3.11 if any LIBOR Rate Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (v) the replacement financial institution or entity shall be an Eligible Assignee, (vi) the replaced Lender shall be obligated to make such replacement in

 

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accordance with the provisions of Section 10.6 ( provided that, except in the case of clause (c) hereof, the Borrower shall be obligated to pay the registration and processing fee referred to therein), (vii) until such time as such replacement shall be consummated, the Borrower shall pay all additional amounts (if any) required pursuant to Section 3.9 or 3.10(a), as the case may be, (viii) any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender, and (ix) in the case of a Non-Consenting Lender, (A) the replacement financial institution or entity shall consent at the time of such assignment to each matter in respect of which the replaced Lender was a Non-Consenting Lender and (B) if the Non-Consenting Lender is a Non-Consenting Lender due to its failure to waive, postpone or reduce the prepayment premium described in Section 3.2(f), the Borrower shall pay such prepayment premium to such Non-Consenting Lender as if the Initial Term Loans being assigned were subject to a Repricing Transaction.  Any Non-Consenting Lender, Affected Lender or Defaulting Lender shall be deemed to have consented to the assignment and delegation of its interests, rights and obligations pursuant to this Section 3.13 if it does not execute and deliver an Assignment and Assumption to the Administrative Agent within one Business Day after having received a request therefor.

 

3.14.                      Evidence of Debt .

 

(a)                                  Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing Indebtedness of the Borrower to such Lender resulting from each Term Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

 

(b)                                  The Administrative Agent, on behalf of the Borrower (or, in the case of an assignment not required to be recorded in the Register in accordance with the provisions of Section 10.6(d), the assigning Lender, acting solely for this purpose as a non-fiduciary agent of the Borrower), shall maintain the Register (or, in the case of an assignment not required to be recorded in the Register in accordance with the provisions of Section 10.6(d), a Related Party Register), in each case pursuant to Section 10.6(d), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Term Loan made hereunder and any Note evidencing such Term Loan, the Type of such Term Loan and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) both the amount of any sum received by the Administrative Agent (or, in the case of an assignment not required to be recorded in the Register in accordance with the provisions of Section 10.6(d), the assigning Lender) hereunder from the Borrower and each Lender’s share thereof.

 

(c)                                   The entries made in the Register and the accounts of each Lender maintained pursuant to Section 3.14(a) shall, to the extent permitted by applicable Requirements of Law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded (absent manifest error); provided , however , that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Term Loans made to the Borrower by such Lender in accordance with the terms of this Agreement.

 

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(d)                                  The Borrower agrees that, upon the request to the Administrative Agent by any Lender, the Borrower will execute and deliver to such Lender a promissory note of the Borrower evidencing any Term Loans, of such Lender, substantially in the form of Exhibit E, with appropriate insertions as to date and principal amount.

 

3.15.                      Illegality . Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain LIBOR Rate Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make LIBOR Rate Loans, continue LIBOR Rate Loans as such and convert ABR Loans to LIBOR Rate Loans shall forthwith be canceled and (b) such Lender’s Term Loans then outstanding as LIBOR Rate Loans, if any, shall be converted automatically to ABR Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a LIBOR Rate Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to Section 3.11.

 

3.16.                      Extension Offers .

 

(a)                                  Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “ Extension Offer ”) made from time to time by the Borrower to all Lenders holding the applicable Tranche of Term Loans, on a pro rata basis (based on the aggregate outstanding principal amount of such Tranche of Term Loans) and on the same terms to each such Lender, the Borrower may from time to time extend the maturity date of such Tranche of Term Loans, and otherwise modify the terms of such Tranche of Term Loans, pursuant to the terms of the relevant Extension Offer (including, without limitation, by increasing the interest rate or fees payable in respect of such Tranche of Term Loans (and related outstandings) (each, an “ Extension ,” and each Tranche of Term Loans so extended being an “extended tranche”; any Extension Term Loans shall constitute a separate Tranche of Term Loans from the other Tranches of Term Loans so long as the following terms are satisfied: (i) no Default or Event of Default shall have occurred and be continuing immediately after the effectiveness of any Extension Term Loan, (ii) except as to interest rates, fees, final maturity date and premium, which shall, subject to immediately succeeding clauses (iii), (iv) and (v), be determined by the Borrower and set forth in the relevant Extension Offer), the Tranche of Term Loans of any Lender extended pursuant to any Extension (“ Extension Term Loans ”) shall have the same terms (save for any terms that apply solely after the latest maturity date of the Term Loans hereunder prior to giving effect to such Extension) as the Tranche of Term Loans subject to such Extension Offer, (iii) the final maturity date of any Extension Term Loans shall be no earlier than the then latest maturity date of Term Loans hereunder, (iv) the Weighted Average to Life Maturity of the Extension Term Loans shall be no shorter than the remaining Weighted Average Life to Maturity of Tranche of Term Loans extended thereby; (v) the amortization schedule applicable to the Extension Term Loans for the periods prior to the Latest Maturity Date shall not be increased, (vi) any Extension Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments or prepayments hereunder, in each case as specified in the respective Extension Offer, (vii) if the aggregate principal amount of Term Loans (calculated on the face amount thereof), in respect of which Lenders shall have accepted the relevant Extension Offer shall

 

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exceed the maximum aggregate principal amount of Term Loans offered to be extended by the Borrower pursuant to such Extension Offer, then the Term Loans of such Lenders shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings of record) with respect to which such Lenders have accepted such Extension Offer, (viii) all documentation in respect of such Extension shall be consistent with the foregoing, and (ix) any applicable Minimum Extension Condition (as defined below) shall be satisfied unless waived by the Borrower. For the avoidance of doubt, no Lender shall be required to participate in any Extension.

 

(b)                                  With respect to all Extensions consummated by the Borrower pursuant to this Section 3.16, the Extension Offer shall specify the Tranche of Term Loans as to which the Extension Offer applies and a minimum amount of Term Loans to be tendered (which shall not be less than $10,000,000) as a condition to the consummation of such Extension Offer (a “ Minimum Extension Condition ”). The Administrative Agent and the Lenders hereby consent to the Extensions and the other transactions contemplated by this Section 3.16 (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extension Term Loans on such terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section 3.16.

 

(c)                                   No consent of any Lender or the Administrative Agent shall be required to effectuate any Extension, other than the consent of each Lender agreeing to such Extension with respect to one or more of its Term Loans (or a portion thereof). The Lenders hereby irrevocably authorize the Administrative Agent and the Collateral Agent to enter into amendments (each, an “ Extension Amendment ”) to this Agreement and the other Loan Documents with the Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of the Term Loans so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrowers in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent with this Section 3.16.  This Section 3.16 shall supersede any provisions of Section 10.1 to the contrary.

 

(d)                                  In connection with any Extension, the Borrower shall provide the Administrative Agent at least five (5) Business Days’ (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures, if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section 3.16.

 

(e)                                   The conversion of any Term Loans hereunder into Extension Term Loans in accordance with this Section 3.16 shall not constitute a voluntary or mandatory payment or prepayment for purposes of this Agreement.

 

SECTION 4.  REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent, the Collateral Agent and the Lenders to enter into this Agreement and to make the Term Loans, the Borrower hereby represents and warrants on the Effective Date that:

 

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4.1.                             Financial Condition .

 

(a)                                  The audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower and its Subsidiaries as of and for the fiscal years ended December 31, 2014, December 31, 2015 and December 31, 2016, reported on by and accompanied by an unqualified report from Ernst & Young LLP, have been prepared in accordance with GAAP consistently applied throughout the applicable period and present fairly in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as at such dates and the consolidated results of operations, stockholders’ equity and cash flows of the Borrower and its Subsidiaries for such fiscal years.

 

(b)                                  The unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower and its Subsidiaries as of and for the six months ended June 30, 2017, have been prepared in accordance with GAAP consistently applied throughout the applicable period and present fairly in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as at such date and the consolidated results of operations, stockholders’ equity and cash flows of the Borrower and its Subsidiaries for such six month period (subject to normal year-end audit adjustments and the absence of footnotes).

 

(c)                                   The Borrower has heretofore delivered to the Administrative Agent a capitalization table of the Borrower and its Subsidiaries as at June 30, 2017, after giving pro forma effect to the Transaction and the issuance of the 2025 Convertible Notes.

 

4.2.                             No Change . Since December 31, 2016, there has been no development or event that has had or would reasonably be expected to have a Material Adverse Effect.

 

4.3.                             Corporate Existence; Compliance with Law . Except as permitted under Section 7.3, each Group Member (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, to the extent such concept is recognized in its jurisdiction of incorporation except, in the case of a Restricted Subsidiary, where the failure to do so would not reasonably be expected to result in a Material Adverse Effect, (b) has the organizational power and authority and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign entity and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, and (d) is in compliance with the terms of all Requirements of Law (including Health Care Laws) and all Governmental Authorizations, except in case of clauses (b), (c) and (d), to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

4.4.                             Power; Authorization; Enforceable Obligations . Each Loan Party has the organizational power and authority, and the legal right, to execute, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has taken all necessary organizational and other action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the extensions of credit on the terms and conditions of this

 

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Agreement. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the Refinancing or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the Loan Documents, except the filings referred to in Section 4.19 which filings have been, or will be, obtained or made and are in full force and effect on or before the Effective Date, other than any such consent, authorizations, filings and notices the absence of which would not reasonably be expected to have a Material Adverse Effect. Each Loan Document required to be executed and delivered prior to the making of this representation and warranty has been duly executed and delivered on behalf of each Loan Party party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether enforcement is sought by proceedings in equity or at law).

 

4.5.                             No Legal Bar . The execution, delivery and performance of this Agreement and the other Loan Documents, the borrowings hereunder and the use of the proceeds thereof will not violate (a) the Organizational Documents of any Loan Party, (b) any Requirement of Law, Governmental Authorization or any Contractual Obligation of any Group Member and (c) will not result in, or require, the creation or imposition of any Lien on any Group Member’s respective properties or revenues pursuant to its Organizational Documents, any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Security Documents and the other Liens permitted under Section 7.2), except for any violation set forth in clause (b) or (c) which would not reasonably be expected to have a Material Adverse Effect.

 

4.6.                             Litigation and Adverse Proceedings . No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened in writing by or against any Group Member or against any of their respective properties or revenues that would reasonably be expected to have a Material Adverse Effect (taking into account reserves made or the benefit of warranties, indemnities or insurance coverage in respect thereof).

 

4.7.                             Insurance .  The Borrower and the Restricted Subsidiaries maintain with financially sound and reputable (in the good faith judgment of the Borrower) insurance companies material insurance in such amounts (after giving effect to any self-insurance reasonable and customary for similarly-situated Persons engaged in the same or similar business) and against such risks as is (i) customarily maintained by companies engaged in the same or similar businesses as reasonably determined by management of the Borrower or (ii) considered adequate by the Borrower in good faith.

 

4.8.                             Ownership of Property; Liens .

 

(a)                                  Each Group Member has title in fee simple (or local law equivalent) to all of its owned real property, a valid leasehold interest in all its leased real property, and good title to, or a valid leasehold interest in, license to, or right to use, all its other tangible Property material to its business, in all material respects, and no such Property is subject to any Lien

 

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except as permitted by Section 7.2, except, in each case, where the failure to have such title or other interest would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(b)                                  As of the Effective Date, the Borrower and the Restricted Subsidiaries do not own any real property.

 

4.9.                             Intellectual Property; Royalty Rights . All Intellectual Property owned by the Group Members is owned free and clear of all Liens other than (i) as permitted by Section 7.2, Section 7.4 or the Security Documents, (ii) licenses granted in the ordinary course of business (including, without limitation, in connection with the sale or provision by Group Members of products or services or the grant of rights to licensees (including, without limitation, any exclusive licensees) to manufacture, use, sell, offer to sell or import products or to use, sell or offer to sell processes or services) in existence as of the Effective Date and any amendment, renewal or extension thereof or thereto, and (iii) as would not reasonably be expected to have a Material Adverse Effect.  Except as would not reasonably be expected to have a Material Adverse Effect: (a) the conduct of, and the use of Intellectual Property in, the business of the Group Members as currently conducted (including the products and services of the Group Members) does not infringe, misappropriate, or otherwise violate the Intellectual Property rights of any other Person, provided that the foregoing representation is made to the Group Members’ knowledge with respect to patents and trademarks; (b) there is no such outstanding claim asserted (including in the form of offers or invitations to obtain a license, but for which Group Member would be infringing), pending, or to the Group Members’ knowledge, threatened, before any Governmental Authority against any Group Member; (c) to the Group Members’ knowledge, no Person is infringing, misappropriating, or otherwise violating any Intellectual Property rights of any Group Member, and there has been no such claim asserted or threatened against any third party by any Group Member; (d) to each Group Member’s knowledge, each Group Member has taken all formal or procedural actions (including payment of fees) required to maintain the registration of any Registered Intellectual Property owned by it; and (e) each Group Member has complied with all applicable Requirements of Law, as well as its own rules, policies, and procedures, relating to privacy, data protection, and the collection and use of personal information collected, used, or held for use by such Group Member.  All Royalty Rights owned by or to which the Group Members are entitled are owned or otherwise held free and clear of all Liens other than (i) as permitted by Section 7.2, Section 7.4 or the Security Documents or (ii) as would not reasonably be expected to have a Material Adverse Effect. Except as would not reasonably be expected to have a Material Adverse Effect: (a) the use of Intellectual Property underlying all Royalty Rights owned or otherwise held by the Group Members (including the sale of products by Glaxo Group Limited or its licensees or Affiliates) does not infringe, misappropriate, or otherwise violate the Intellectual Property rights of any other Person, provided that the foregoing representation is made to the Group Members’ knowledge; (b) to the Group Members’ knowledge, there is no such outstanding claim asserted (including in the form of offers or invitations to obtain a license, but for which the sale of products of Glaxo Group Limited or its licensees or Affiliates would be infringing), pending or threatened against Glaxo Group Limited or its licensees or Affiliates before any Governmental Authority; (c) to the Group Members’ knowledge, no Person is infringing, misappropriating, or otherwise violating any Intellectual Property rights underlying any Royalty Rights of any Group Member, and there has been no such claim asserted or threatened by Glaxo Group Limited or its licensees or Affiliates against any third party; and (d) to each Group Members’ knowledge, each Group Member has taken all formal or procedural actions required to maintain the Royalty Rights owned or held by it.

 

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4.10.                      Taxes . Each Loan Party has filed or caused to be filed all federal, state and other material tax returns that are required to be filed by it and all such tax returns are true, correct, and complete in all material respects.  Each Loan Party has paid all federal, state and other taxes and any assessments made in writing against it or any of its property by any Governmental Authority (other than (a) any which are not yet due or the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the relevant Loan Party or (b) any which the failure to so pay would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect).  No tax Lien for any material amount has been filed (other than for taxes not yet due or the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the relevant Loan Party).  No Loan Party is aware of any proposed or pending tax assessments, deficiencies or audits with respect to such Loan Party that would be reasonably expected to, individually or in the aggregate, result in a Material Adverse Effect.

 

4.11.                      Federal Reserve Regulations . No Group Member is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock. No part of the proceeds of any extension of credit under this Agreement will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for purchasing or carrying Margin Stock or for any other purpose that entails a violation of, or that is inconsistent with, the provisions of the regulations of the Board, including Regulation T, Regulation U or Regulation X.

 

4.12.                      Labor Matters . Except as, in the aggregate, would not reasonably be expected to have a Material Adverse Effect: (a) there are no strikes or other labor disputes against any Group Member pending or, to the knowledge of the Borrower, threatened; (b) hours worked by and payment made to employees of each Group Member have not been in violation of the Fair Labor Standards Act, as amended, or any other applicable Requirement of Law dealing with such matters; and (c) all payments due from any Group Member on account of employee health and welfare insurance or other similar employee taxes have been paid or accrued as a liability on the books of the relevant Group Member.

 

4.13.                      ERISA .  (x) Except as has not had or would not reasonably be expected to have a Material Adverse Effect, (a) each Plan and, with respect to each Plan, each of the Borrower and its ERISA Affiliates are in compliance with the applicable provisions of ERISA and the Code; (b) each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS indicating that such Plan is so qualified and nothing has occurred subsequent to the issuance of such determination letter which would cause such Plan to lose its qualified status; (c) no liability to the PBGC (other than required premium payments), the IRS, any Plan (other than in the ordinary course) or any trust established under Title IV of ERISA has been or reasonably would be expected to be incurred by the Borrower or any of its ERISA Affiliates with respect to any Plan; (d) no ERISA Event has

 

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occurred or is reasonably expected to occur; (e) the present value of all accrued benefit obligations under each Single Employer Plan (based on those assumptions used to fund such Single Employer Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Single Employer Plan allocable to such accrued benefit obligations; (f) as of the most recent valuation date for each Multiemployer Plan, the potential liability of the Borrower and each of its ERISA Affiliates for a complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 or Section 4205 of ERISA), when aggregated with such potential liability for a complete withdrawal from all Multiemployer Plans, is zero; (g) the Borrower and each of its ERISA Affiliates have complied with the requirements of Section 515 of ERISA with respect to each Multiemployer Plan and are not in material “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan; (h) neither the Borrower nor any of its ERISA Affiliates contributes to, or reasonably would be expected to have any liability with respect to, any Multiemployer Plan or has any contingent liability with respect to any post-retirement welfare benefit under a Plan that is subject to ERISA, other than liability for continuation coverage described in Part 6 of Title I of ERISA; or (i) neither the Borrower nor any of its ERISA Affiliates maintains or contributes to any employee benefit plan that is subject to the laws of any jurisdiction outside the United States of America.

 

(y)                                  The Borrower represents and warrants as of the Effective Date that the Borrower is not and will not be (1) an employee benefit plan subject to Title I of ERISA, (2) a plan or account subject to Section 4975 of the Code, (3) an entity deemed to hold “plan assets” of any such plans or accounts for purposes of ERISA or the Code or (4) a “governmental plan” within the meaning of ERISA.

 

4.14.                      Investment Company Act . No Loan Party is an “investment company” or a company “controlled” by an “investment company” as defined in the Investment Company Act of 1940, as amended.

 

4.15.                      Capital Stock and Ownership Interests of Subsidiaries .  As of the Effective Date, Schedule 4.15 sets forth the name and jurisdiction of formation or incorporation of each Subsidiary and states the authorized and issued capitalization of such Group Member, the beneficial and record owners thereof and the percentage of each class of Capital Stock owned by any Loan Party. Except as listed on Schedule 4.15, as of the Effective Date, no Group Member owns any interests in any joint venture, partnership or similar arrangements with any Person.

 

4.16.                      Use of Proceeds . The proceeds of the Initial Term Loans shall be used to finance the Refinancing and to pay fees and expenses in connection with the Transaction.

 

4.17.                      Environmental Matters . Except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect:

 

(a)                                  the Group Members (i) are, and have been, in compliance with all applicable Environmental Laws including obtaining, maintaining and complying with all Environmental Permits required for their current or intended operations or for any property owned, leased, or otherwise operated by any of them and (ii) reasonably believe that compliance with any Environmental Law that is or is currently expected to become applicable to any of them will be timely attained and maintained, without material expense;

 

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(b)                                  Materials of Environmental Concern have not been Released and are not present at, on, under, in, or about any real property now owned, leased or operated by any Group Member, or to the knowledge of the Borrower any real property formerly owned, leased or operated by any Group Member or any other location (including, without limitation, any location to which Materials of Environmental Concern have been sent for re-use, recycling, treatment, storage, or disposal) in a quantity, manner or condition which would reasonably be expected to (i) require investigation, removal, or remediation under Environmental Law or otherwise give rise to Environmental Liability of any Group Member, (ii) interfere with any Group Member’s continued operations, or (iii) impair the fair saleable value of any Mortgaged Property owned by any Group Member;

 

(c)                                   there are no pending or, to the knowledge of the Borrower, threatened actions, suits, claims, disputes or proceedings at law or in equity, administrative or judicial, by or before any Governmental Authority (including any notice of violation or alleged violation or seeking to revoke, cancel, or amend any Environmental Permit) under or relating to any Environmental Law to which any Group Member is, or to the knowledge of the Borrower, will be, named as a party or affecting any Group Member or any business, property or rights of any Group Member;

 

(d)                                  no Group Member has received any written request for information, or been otherwise notified that it is a potentially responsible party under or relating to the federal Comprehensive Environmental Response, Compensation, and Liability Act or any similar Environmental Law, or with respect to any Release of Materials of Environmental Concern, nor is any Group Member paying for or conducting, in whole or in part, any response or other corrective action to address any Materials of Environmental Concern at any location pursuant to any Environmental Law;

 

(e)                                   no Group Member has entered into or agreed to any consent decree, order, or settlement or other agreement, or is subject to any judgment, decree, or order or other agreement, in any judicial, administrative, arbitral, or other forum for dispute resolution, relating to compliance with Environmental Law or any Environmental Liability; and

 

(f)                                    no Group Member has assumed or retained by contract any Environmental Liabilities of any kind, whether fixed or contingent, known or unknown.

 

4.18.                      Accuracy of Information, etc.   No written statement (including the Confidential Information Memorandum but excluding any projections, other forward-looking information and information of a general economic or industry specific nature) contained in any document, certificate or statement furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, when taken as a whole with all information included in the Referenced SEC Filings or in any report, schedule, form, statement or other document filed with the SEC by the Borrower and publicly available on and after the Effective Date, contained as of the date such document, certificate or statement was furnished, any untrue

 

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statement of a material fact or omitted to state a material fact necessary in order to make the statements contained therein not materially misleading in the light of the circumstances under which such statements were made, in each case after giving effect to any written updates thereto.

 

4.19.                      Security Documents . The Guarantee and Collateral Agreement and each other Security Document is, or upon execution, will be, effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a valid security interest in the Collateral described therein except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether enforcement is sought by proceedings in equity or at law). In the case of the Pledged Equity Interests described in the Guarantee and Collateral Agreement, when stock or interest certificates representing such Pledged Equity Interests (along with properly completed stock or interest powers and, where applicable, stock transfer forms, in each case, endorsing the Pledged Equity Interest and executed by the owner of such shares or interests) are delivered to the Collateral Agent, and in the case of the other Collateral described in the Guarantee and Collateral Agreement or any other Security Document (other than deposit accounts), when financing statements and other filings specified on Schedule 4.19 in appropriate form are filed in the offices specified on Schedule 4.19, the Collateral Agent, for the benefit of the Secured Parties, shall have a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral to the extent perfection can be obtained by filing a UCC financing statement, as security for the Obligations, subject in the case of the Intellectual Property that is the subject of any application or registration in the United States Patent and Trademark Office or the United States Copyright Office (other than intent to use Trademark applications), to the recordation of appropriate evidence of the Collateral Agent’s Lien in the United States Patent and Trademark Office and/or United States Copyright Office, as appropriate, and the taking of actions and making of filings necessary under the applicable Requirements of Law to obtain the equivalent of perfection.

 

4.20.                      Solvency .  As of the Effective Date, the Borrower and its Subsidiaries (on a consolidated basis), after giving effect to the Transaction, are Solvent.

 

4.21.                      Senior Indebtedness . The Obligations constitute “senior debt,” “senior indebtedness,” “designated senior debt,” “guarantor senior debt” or “senior secured financing” (or any comparable term) of each Loan Party under and as defined in any documentation relating to any Junior Financing.  In furtherance of the foregoing, the parties hereto agree that the Obligations of the Borrower shall be “Designated Senior Indebtedness” for purposes of the indenture governing the 2023 Convertible Notes.

 

4.22.                      EEA Financial Institution .  No Loan Party is an EEA Financial Institution.

 

4.23.                      Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws .

 

(a)                                  The Borrower and its Subsidiaries and their respective officers and, to the knowledge of the Borrower, the directors, employees and agents of the Borrower and its Subsidiaries, are in compliance with Anti-Corruption Laws and applicable Sanctions, in all material respects.

 

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(b)                                  No Loan Party or any of its Subsidiaries, is in violation of any applicable Anti-Terrorism Law in any material respect.

 

(c)                                   None of the Loan Parties nor any Subsidiaries of any Loan Party or, to the knowledge of the Loan Parties, their respective agents acting or benefiting in any capacity in connection with the Term Loans or other transactions hereunder, is a Sanctioned Person.

 

(d)                                  No part of the proceeds of the Term Loans will be used, directly or knowingly indirectly, for the benefit of a Sanctioned Country or Sanctioned Person, in each case in violation of applicable Sanctions or otherwise in violation of applicable Sanctions, or for any payment to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or other applicable Anti-Corruption Laws.

 

SECTION 5.  CONDITIONS PRECEDENT

 

5.1.                             Conditions to Extension of Credit . The obligation of each Initial Term Lender to make the Initial Term Loans requested to be made by it hereunder is subject to the satisfaction (or waiver), prior to or concurrently with the making of such Initial Term Loans on the Effective Date, of each of the following conditions precedent:

 

(a)                                  The Administrative Agent shall have received (i) this Agreement, executed and delivered by a duly authorized officer of the Borrower, the Administrative Agent, the Collateral Agent and each Initial Term Lender, (ii) a Note, executed and delivered by the Borrower in favor of each Initial Term Lender that has requested a Note at least two Business Days prior to the Effective Date, (iii) the Guarantee and Collateral Agreement, executed and delivered by a duly authorized officer of each party thereto, (iv) Intellectual Property Security Agreements, executed and delivered by a duly authorized officer of each party thereto, in the case of any owned Intellectual Property and (v) a borrowing notice in the form attached hereto as Exhibit B (or any other form approved by the Borrower and the Administrative Agent) executed and delivered by a duly authorized officer of the Borrower.

 

(b)                                  The Administrative Agent shall have received the capitalization table and the financial statements described in Sections 4.1(a) and (b).

 

(c)                                   The Administrative Agent shall have received evidence reasonably satisfactory to the Administrative Agent that the Refinancing will be consummated substantially simultaneously with the making of the Initial Term Loans hereunder on the Effective Date.

 

(d)                                  The Borrower shall have delivered to the Administrative Agent (or the Collateral Agent in the case of clause (iii) below):

 

(i)                                      a completed Perfection Certificate, dated as of the Effective Date, executed by a duly authorized officer of the Borrower, together with all attachments contemplated thereby;

 

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(ii)                                   evidence that each Loan Party shall have taken or caused to be taken any other action, executed and delivered or caused to be executed and delivered any other agreement, document and instrument and authorized, made or caused to be made any other filing and recording required under the Security Documents, and each UCC financing statement shall have been delivered to the Collateral Agent and shall be in proper form for filing, registration or recordation; and

 

(iii)                                (1) the certificates representing the Pledged Equity Interests, together with an undated stock power or other instrument of transfer for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (2) each promissory note pledged pursuant to the Guarantee and Collateral Agreement, together with an undated instrument of transfer for each such promissory note executed in blank by a duly authorized officer of the pledgor thereof.

 

(e)                                   The Lenders and the Agents shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced at least two Business Days prior to the Effective Date, reimbursement or payment of all out-of-pocket expenses (including reasonable fees, disbursements and other charges of counsel) required to be reimbursed or paid under the Engagement Letter or the Agent Fee Letter.

 

(f)                                    The Administrative Agent shall have received a solvency certificate in form and substance reasonably satisfactory to the Administrative Agent, dated the Effective Date and signed by the chief financial officer of the Borrower.

 

(g)                                   The Administrative Agent shall have received the results of a recent lien, tax lien, judgment and litigation search in each of the jurisdictions or offices (including, without limitation, in the United States Patent and Trademark Office and the United States Copyright Office) in which UCC financing statement or other filings or recordations should be made to evidence or perfect security interests in all assets of the Loan Parties (or would have been made at any time during the five years immediately preceding the Effective Date to evidence or perfect Liens on any assets of the Loan Parties), and such search shall reveal no Liens or judgments on any of the assets of the Loan Parties, except for Liens permitted pursuant to Section 7.2 or Liens and judgments to be terminated on the Effective Date pursuant to documentation reasonably satisfactory to the Administrative Agent.

 

(h)                                  The Administrative Agent shall have received a certificate substantially in the form of Exhibit F-1 signed by a Responsible Officer of the Borrower, dated the Effective Date, confirming the satisfaction of the conditions set forth in Sections 5.1(l) and (m) below.

 

(i)                                      The Administrative Agent shall have received with respect to the Borrower and each other Loan Party:

 

(i)                                      copies of the Organizational Documents of such Loan Party (including each amendment thereto) and, to the extent applicable, certified as of a date reasonably near the Effective Date as being a true and complete copy thereof by the Secretary of State or other applicable Governmental Authority of the jurisdiction in which each such Loan Party is organized;

 

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(ii)                                   a certificate of the secretary or assistant secretary of each Loan Party dated the Effective Date and certifying (A) that attached thereto is a true and complete copy of the Organizational Documents of such Loan Party as in effect on the Effective Date, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors or similar governing body of such Loan Party (and, if applicable, any parent company of such Loan Party) approving and authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party and the consummation of the Transaction, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation, formation or organization, as applicable, of such Loan Party have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (iv) below and (D) as to the incumbency and specimen signature of each Person authorized to execute any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party;

 

(iii)                                a certificate of another officer as to the incumbency and specimen signature of the secretary or assistant secretary executing the certificate pursuant to clause (ii) above; and

 

(iv)                               a copy of the certificate of good standing (to the extent such concept is known in the relevant jurisdiction) of such Loan Party from the Secretary of State or other applicable Governmental Authority of the jurisdiction in which each such Loan Party is organized (dated as of a date reasonably near the Effective Date).

 

(j)                                     The Administrative Agent shall have received a customary written opinion (addressed to the Administrative Agent, the Collateral Agent and the Lenders and dated the Effective Date) of Skadden, Arps, Slate, Meagher & Flom LLP and Gunderson, Dettmer, Stough, Villeneuve, Franklin & Hachigian, LLP, counsel for the Loan Parties.  Each Loan Party hereby instructs such counsel to deliver such opinion to the Administrative Agent, the Collateral Agent and the Lenders.

 

(k)                                  At least five Business Days prior to the Effective Date, the Agents and the Lenders shall have received all documentation and other information required by bank regulatory authorities or reasonably requested by any Agent or any Lender under or in respect of applicable “know-your-customer” and anti-money laundering rules and regulations, including the Patriot Act, that was requested at least 10 Business Days prior to the Effective Date.

 

(l)                                      Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects (or in all respects where qualified by materiality or Material Adverse Effect) on and as of the Effective Date.

 

(m)                              No Default or Event of Default shall have occurred and be continuing on the Effective Date immediately prior and after giving effect to the making of the Initial Term Loans to be made on the Effective Date and the use of proceeds thereof.

 

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5.2.                             Conditions to Each Incremental Term Loan . The agreement of each Incremental Lender to make any Incremental Term Loans is subject to the satisfaction of the following conditions precedent (a) the delivery of a borrowing notice in the form attached hereto as Exhibit B (or any other form approved by the Borrower and the Administrative Agent) executed and delivered by a duly authorized officer of the Borrower, (b) the conditions precedent set forth in Section 2.4, (c) the delivery of the applicable Incremental Amendment executed and delivered by a duly authorized officer of the Borrower and each other party thereto and (d) any other condition precedent required by the Lenders providing such Incremental Term Loans.

 

SECTION 6.  AFFIRMATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitments remain in effect, or any Term Loan or other amount is owing to any Lender or Agent hereunder (other than Unasserted Contingent Obligations), the Borrower shall and shall cause each of its Restricted Subsidiaries to:

 

6.1.                             Financial Statements . Furnish to the Administrative Agent for prompt further distribution to each Lender:

 

(a)                                  as soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Borrower and except to the extent publicly available on the SEC’s EDGAR system within such time (so long as the Borrower has provided written notice to the Administrative Agent of the filing thereof), (i) a copy of the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income, stockholders’ equity and cash flows for such year, setting forth in each case in comparative form the figures for the previous year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of Ernst & Young LLP or any other independent certified public accounting firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit (other than a “going concern” qualification resulting solely from an upcoming maturity date of the Term Loans occurring within one year from the time such opinion is delivered) and (ii) in the event the Borrower is no longer subject to the periodic reporting requirements of the Exchange Act, a narrative report and management’s discussion and analysis, in customary form, of the financial condition and results of operations of the Borrower for such fiscal year, as compared to amounts for the previous fiscal year;

 

(b)                                  as soon as available, but in any event on the date forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower and except to the extent publicly available on the SEC’s EDGAR system within such time (so long as the Borrower has provided written notice to the Administrative Agent of the filing thereof), (i) the unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter, the related unaudited consolidated statements of income, stockholders’ equity and cash flows for such fiscal quarter and the then elapsed portion of the fiscal year through the end of such fiscal quarter, setting forth in each case in comparative form the figures for the previous year, all in reasonable detail and certified by a Responsible Officer of the

 

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Borrower as fairly presenting in all material respects the financial condition, results of operation, stockholders’ equity and cash flows of the Borrower in accordance with GAAP (subject to normal year-end audit adjustments and the absence of footnotes) and (ii) in the event the Borrower is no longer subject to the periodic reporting requirements of the Exchange Act, a narrative report and management’s discussion and analysis, in customary form, of the financial condition and results of operations for such fiscal quarter and the then elapsed portion of the fiscal year, as compared to the comparable periods in the previous fiscal year;

 

(c)                                   in the event the Borrower is no longer subject to the periodic reporting requirements of the Exchange Act, at such time as reasonably determined by the Administrative Agent, after the financial statements of the Borrower and its consolidated Subsidiaries are required to be delivered pursuant to Sections 6.1(a) and 6.1(b), the Borrower shall participate in a conference call to discuss results of operations of the Borrower and its consolidated Subsidiaries with the Lenders; and

 

(d)                                  simultaneously with the delivery of each set of consolidated financial statements referred to in Section 6.1(a) or (b) above, the related consolidating financial statements reflecting the adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements.

 

All such financial statements shall be in accordance with GAAP applied consistently throughout the periods reflected therein and other than as disclosed therein with prior periods.

 

Any documents required to be delivered pursuant to this Section 6.1 may be delivered by posting such documents electronically with notice of such posting to the Administrative Agent and if so posted, shall be deemed to have been delivered on the date on which such documents are posted on the Borrower’s behalf on the Platform or another relevant website sponsored by the Administrative Agent to which each Lender has access.

 

6.2.                             Certificates; Other Information . Furnish to the Administrative Agent and the Collateral Agent (as applicable) (or, in the case of clause (e), to the relevant Lender):

 

(a)                                  concurrently with the delivery of any financial statements pursuant to Section 6.1, (i) a certificate of a Responsible Officer of the Borrower stating that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate, (ii) to the extent not previously disclosed and delivered to the Administrative Agent and the Collateral Agent, a listing of any material Intellectual Property which is the subject of a United States federal registration or federal application (including Intellectual Property included in the Collateral which was theretofore unregistered and becomes the subject of a United States federal registration or federal application) acquired by any Loan Party since the date of the most recent list delivered pursuant to this clause (ii) (or, in the case of the first such list so delivered, since the Effective Date), and promptly deliver to the Administrative Agent and the Collateral Agent an Intellectual Property Security Agreement suitable for recordation in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, or such other instrument in form and substance reasonably acceptable to the Administrative Agent, and undertake the filing of any instruments or statements as shall be reasonably necessary to create, record, preserve, protect or perfect the Collateral Agent’s security interest in such Intellectual Property, and (iii) a Compliance Certificate as of the last day of the fiscal quarter or fiscal year of the Borrower, as the case may be;

 

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(b)                                  as soon as available and in any event no later than ninety (90) days after the beginning of each fiscal year of the Borrower, an annual budget prepared by management of the Borrower, consisting of condensed income statements on an annual basis for such fiscal year;

 

(c)                                   promptly after the same are sent, copies of all material notices that the Borrower sends to the holders of any class of its Indebtedness or public equity securities and, promptly after the same are filed, copies of all annual, regular or periodic and special reports and registration statements which the Loan Parties may file or be required to file with the SEC or any national securities exchange and not otherwise required to be delivered to the Administrative Agent pursuant hereto (provided that notwithstanding the foregoing, the obligations in this Section 6.2(c) may be satisfied if such information is publicly available on the SEC’s EDGAR website); and

 

(d)                                  promptly, such additional financial and other information regarding the business, financial or corporate affairs of the Borrower or any of its Restricted Subsidiaries as the Administrative Agent (for itself or on behalf of any Lender) may from time to time reasonably request.  Notwithstanding anything to the contrary in this Section 6.2(d), none of the Borrower or any of its Restricted Subsidiaries will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (a) constitutes non-financial trade secrets or non-financial proprietary information, (b) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding agreement or (c) is subject to attorney-client or similar privilege or constitutes attorney work product; provided that, in the event that the Borrower or a Restricted Subsidiary does not provide information in reliance on foregoing clause (b) or clause (c), such Person shall (x) if permitted by applicable law, provide written notice to the Administrative Agent that such information is being withheld pursuant to the foregoing clause (b) or clause (c), as applicable, if such notice can, in the Borrower’s good faith determination, be provided in a manner that would not result in such a violation of law or binding agreement or waiver or impairment of privilege and (y) use commercially reasonable efforts to provide such information in a manner that would not result in such a violation of law or binding agreement or waiver or impairment of privilege.

 

6.3.                             Payment of Taxes . Pay all federal, state and other material taxes, assessments, fees or other charges imposed on it or any of its property by any Governmental Authority that are material in amount before they become delinquent, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the relevant Group Member.

 

6.4.                             Maintenance of Existence; Compliance .

 

(a)                                  (i) Preserve, renew and keep in full force and effect its organizational existence except as permitted hereunder and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, including,

 

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without limitation, all necessary Governmental Authorizations, except, in each case, as otherwise permitted by Section 7.3 and Section 7.4 and except, in the case of clause (ii) above, to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect; and

 

(b)                                  comply with all Contractual Obligations, Organizational Documents and Requirements of Law (including, without limitation, and as applicable, ERISA and the Code) except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

6.5.                             Maintenance of Property; Insurance . (a) Keep all material Property in good working order and condition, ordinary wear and tear and casualty and condemnation excepted and except to the extent the failure to do so would not reasonably be expected to result in a Material Adverse Effect or as otherwise expressly permitted by this Agreement, (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by similarly situated companies engaged in the same or similar business operating in the same or similar locations. Within 60 days after the Effective Date (or such later date as the Administrative Agent may reasonably agree), the umbrella liability insurance and property insurance of the Group Members shall (i) name the Collateral Agent, on behalf of the Secured Parties as an additional insured thereunder as its interests may appear and (ii) in the case of each casualty insurance policy, contain a loss payable clause or endorsement, reasonably satisfactory in form and substance to the Administrative Agent, that names Collateral Agent, on behalf of Lenders as the loss payee thereunder and (c) if any portion of any Mortgaged Property is at any time located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a Special Flood Hazard Area with respect to which flood insurance has been made available under the National Flood Insurance Act of 1968 (as now or hereafter in effect or successor act thereto), then the Borrower shall, or shall cause each Loan Party to (i) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws and (ii) deliver to the Administrative Agent evidence of such compliance in form and substance reasonably acceptable to the Administrative Agent.

 

6.6.                             Inspection of Property; Books and Records; Discussions . (a) Keep proper books of records and account in which full, true and correct in all material respects entries in conformity with GAAP and all Requirements of Law shall be made of all material dealings and transactions in relation to its business and activities and (b) subject to the Borrower’s and each Restricted Subsidiary’s internal policies for the protection and preservation of Intellectual Property or other non-financial proprietary information, permit representatives of the Administrative Agent to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time during normal business hours and upon reasonable advance notice to the Borrower and to discuss the business, operations, properties and financial and other condition of the Group Members with the officers of the Group Members and with their independent certified public accountants ( provided that (i) the Borrower or its Subsidiaries may, at their option, have one or more employees or representatives present at any discussion with such accountants and (ii) only the Administrative Agent on behalf of the Lenders may exercise rights of the Administrative Agent and the Lenders under this Section 6.6); provided that unless an Event of Default has occurred or is continuing, only one (1) such visit in

 

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any calendar year shall be at the Borrower’s expense.  Notwithstanding anything to the contrary in this Section 6.6, none of the Borrower or any of its Restricted Subsidiaries will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (a) constitutes non-financial trade secrets or non-financial proprietary information, (b) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding agreement or (c) is subject to attorney-client or similar privilege or constitutes attorney work product; provided that, in the event that the Borrower or a Restricted Subsidiary does not provide information in reliance on foregoing clause (b) or clause (c), such Person shall (x) if permitted by applicable law, provide written notice to the Administrative Agent that such information is being withheld pursuant to the foregoing clause (b) or clause (c), as applicable, if such notice can, in the Borrower’s good faith determination, be provided in a manner that would not result in such a violation of law or binding agreement or waiver or impairment of privilege and (y) use commercially reasonable efforts to provide such information in a manner that would not result in such a violation of law or binding agreement or waiver or impairment of privilege.

 

6.7.                             Notices . Promptly give notice to the Administrative Agent of:

 

(a)                                  the occurrence of any Default or Event of Default;

 

(b)                                  any litigation or proceeding affecting any Group Member (i) which would reasonably be expected to have a Material Adverse Effect or (ii) which relates to any Loan Document;

 

(c)                                   the occurrence of any of the following events, as soon as possible and in any event within 30 days after any Group Member knows or has reason to know thereof:  (i) any ERISA Event that has had or would reasonably be expected to have a Material Adverse Effect, (ii) the adoption of any new Single Employer Plan by any Group Member or any of their respective ERISA Affiliates, (iii) the adoption of an amendment to a Single Employer Plan if such amendment results in a material increase in benefits or unfunded liabilities or (iv) the commencement of contributions by any Group Member or any of their respective ERISA Affiliates to a Multiemployer Plan or Single Employer Plan, which, in the case of each of the foregoing clauses (i) through (iv), shall specify the nature thereof, what action such Group Member or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the IRS, the Department of Labor or the PBGC with respect thereto; and

 

(d)                                  any development or event that has had or would reasonably be expected to have a Material Adverse Effect.

 

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Borrower or the relevant Subsidiary proposes to take with respect thereto.

 

6.8.                             Environmental Laws .

 

(a)                                  Comply with all applicable Environmental Laws, and obtain and comply with and maintain any and all Environmental Permits required by applicable Environmental Laws, except, in each case, to the extent the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

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(b)                                  Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws to address Materials of Environmental Concern, and promptly comply with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws, except to the extent the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

(c)                                   Make an appropriate response to any investigation, notice, demand, claim, suit or other proceeding asserting Environmental Liability against the Borrower or any of the Restricted Subsidiaries and discharge any legally enforceable obligations it may have to any Person thereunder, except to the extent the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

6.9.                             Intellectual Property; Royalty Rights .  Each Group Member shall (and the Borrower shall procure that each Group Member shall): (a) take commercially reasonable efforts to maintain the subsistence of Intellectual Property which the relevant Group Member owns and is, in the reasonable determination of the relevant Group Member, necessary to the conduct of the business of such Group Member; (b) take commercially reasonable efforts to preserve and maintain the validity of the Registered Intellectual Property which the relevant Group Member owns by paying all registration fees and taxes necessary, as applicable, to maintain such Registered Intellectual Property in full force and effect and, as applicable, by recording its interest in such Registered Intellectual Property with the appropriate governmental authority; and (c) take commercially reasonable steps to defend against any third party claims against such Group Member alleging infringement of such third party’s Intellectual Property, including, without limitation, settling litigation when in such Group Member’s good faith belief it is commercially reasonable to do so, except, in each case, to the extent the failure to do so would not reasonably be expected to have a Material Adverse Effect.  Each Group Member shall (and the Borrower shall procure that each Group Member shall) take all commercially reasonable efforts to maintain the subsistence of all Royalty Rights the relevant Group Member owns or is entitled to receive except to the extent the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

6.10.                      Post-Closing; Additional Collateral, etc.

 

(a)                                  Subject to Section 6.10(b), with respect to any property acquired after the Effective Date by any Loan Party as to which the Collateral Agent, for the benefit of the Secured Parties, does not have a perfected Lien (other than (x) any property described in paragraph (b), (c) or (d) below and (y) property that is not required to become subject to Liens in favor of the Collateral Agent pursuant to the Loan Documents), (i) execute and deliver to the Collateral Agent such amendments to the applicable Security Document or such other documents as the Collateral Agent reasonably deems necessary or advisable to grant to the Collateral Agent, for the benefit of the Secured Parties, a security interest in such property and (ii) take all actions necessary or advisable to grant to the Collateral Agent, for the benefit of the Secured Parties, a perfected first priority security interest in such property, including, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the

 

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applicable Security Document or by law, the delivery of Pledged Equity Interests (together with undated powers, in blank, executed and delivered by a duly authorized officer of the relevant pledgor) and, in the case of Intellectual Property subject to a United States federal registration or federal application, as promptly as practicable, the delivery for filing of an Intellectual Property Security Agreement suitable for recordation in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, or such other instrument in form and substance reasonably acceptable to the Administrative Agent, or as may be reasonably requested by the Administrative.

 

(b)                                  With respect to any fee interest in any Real Property located in the United States having a value (together with improvements thereof) of at least $5,000,000 (“ Material Owned Real Property ”) owned or acquired on or after the Effective Date by any Loan Party (other than any such real property subject to a Lien expressly permitted by Section 7.2(g)), promptly (but in any event within 90 days, or as such later date the Administrative Agent may reasonably agree) (i) execute and deliver a first priority Mortgage subject to Liens permitted under clause (i) of Section 7.2 hereof, in favor of the Collateral Agent, for the benefit of the Secured Parties, covering such real property, (ii) provide the Secured Parties with (x) a policy of title insurance (or marked up title insurance commitment having the effect of a policy of title insurance) covering such real property in an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably acceptable to the Administrative Agent, provided that in jurisdictions that impose mortgage recording taxes, the Security Documents shall not secure indebtedness in an amount exceeding 105% of the fair market value of the Mortgaged Property, as reasonably determined in good faith by the Loan Parties and reasonably acceptable to Administrative Agent), and, if reasonably requested by the Administrative Agent, a Survey thereof (except that a new Survey will not be required except to the extent necessary to delete the so called “survey exceptions” in any such policy of title insurance) and (y) any consents or estoppels deemed necessary or reasonably advisable by the Administrative Agent in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the Administrative Agent, (iii) deliver to the Administrative Agent and the Collateral Agent legal opinions relating to, among other things, the enforceability in the jurisdiction where the property is located, due authorization, execution and delivery of the applicable Mortgage, which opinions shall be in customary form and substance and from counsel reasonably satisfactory to the Administrative Agent and (iv) for real property located in the United States deliver to the Administrative Agent a “Life-of-Loan” Federal Emergency Standard Flood Hazard Determination (together with a notice about special flood hazard area status and flood disaster assistance duly executed by the Borrower and each Loan Party relating thereto), and if such Mortgaged Property is located in a special flood hazard area, evidence of flood insurance confirming that such insurance has been obtained, which certificate shall be in a form and substance reasonably satisfactory to the Administrative Agent, and any and all other documents as the Administrative Agent may reasonably request, in each case, in form and substance reasonably satisfactory to the Administrative Agent.

 

(c)                                   With respect to any Restricted Subsidiary (other than an Excluded Subsidiary) formed or acquired after the Effective Date by any Loan Party or which ceases to be an Excluded Subsidiary, within forty-five (45) days after such formation, acquisition or cessation (or such later date as the Administrative Agent may agree) (i) cause such Restricted Subsidiary (A) to become a party to the applicable Security Documents and (B) to take such actions

 

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necessary or advisable to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (subject to Liens permitted by Section 7.2 hereof and other than Excluded Perfection Actions) in the Collateral of such Restricted Subsidiary, for the benefit of the Secured Parties, pursuant to the Loan Documents as the Administrative Agent shall determine, in its reasonable discretion, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Administrative Agent, and (ii) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in customary form and substance and from counsel reasonably satisfactory to the Administrative Agent.

 

(d)                                  Notwithstanding anything to the contrary herein:

 

(i)                                      no Loan Party shall be required to grant a Lien on any Excluded Assets;

 

(ii)                                   no Loan Party shall be required to perfect any Lien on any Excluded Perfection Assets;

 

(iii)                                no Loan Party shall be required to seek any landlord waiver, bailee letter, estoppel, warehouseman waiver or other collateral access, lien waiver or similar letter or agreement;

 

(iv)                               any joinder or supplement to any Security Document or any other Loan Document executed by any Restricted Subsidiary that is required to become a Loan Party pursuant to Section 6.10 above may, with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed), include such schedules (or updates to schedules) as may be necessary to qualify any representation or warranty with respect to such Restricted Subsidiary set forth in any Loan Document to the extent necessary to ensure that such representation or warranty is true and correct in all material respects to the extent required thereby or by the terms of any other Loan Document; and

 

(v)                                  no actions in any non-U.S. jurisdiction or required by the laws of any non-U.S. jurisdiction shall be required in order to create any security interests in any assets or to perfect or make enforceable such security interests (including any Intellectual Property registered in any non-U.S. jurisdiction) (it being understood that there shall be no security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction or any requirement to make any filings in any foreign jurisdiction including with respect to foreign Intellectual Property).

 

6.11.                      Further Assurances . From time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take all such actions, as the Administrative Agent or the Collateral Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of more fully perfecting or renewing the rights of the Administrative Agent, the Collateral Agent and the Secured Parties with respect to the Collateral (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or

 

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assets hereafter acquired by any Loan Party which may be deemed to be part of the Collateral) pursuant hereto or thereto.  Upon the reasonable exercise by the Administrative Agent, the Collateral Agent or any Secured Party of any power, right, privilege or remedy pursuant to this Agreement or the other Loan Documents which requires any consent, approval, recording qualification or authorization of any Governmental Authority, the Borrower will execute and deliver, or will cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the Administrative Agent, the Collateral Agent or such Secured Party reasonably may be required to obtain from any Loan Party for such governmental consent, approval, recording, qualification or authorization.

 

6.12.                      Rated Credit Facility; Corporate Ratings . Use commercially reasonable efforts to (a) cause the Term Loans to be continuously rated by S&P and Moody’s (but not to maintain a specific rating) and (b) cause the Borrower to continuously receive a Corporate Family Rating and Corporate Rating (but not to maintain a specific rating).

 

6.13.                      Use of Proceeds . The Borrower shall use the proceeds of the Initial Term Loans, solely as set forth in Section 4.16.  The Borrower shall not request any Term Loans, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Term Loans (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, in each case in violation of applicable Sanctions or (c) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

 

6.14.                      Anti-Corruption Laws; Sanctions; Anti-Terrorism Laws .  Each Loan Party shall (and the Borrower shall procure that each Subsidiary will) comply with the requirements of all applicable Anti-Corruption Laws, all applicable Requirements of Law related to Sanctions and all applicable Anti-Terrorism Laws in all material respects.

 

6.15.                      Designation of Subsidiaries . The Borrower may at any time after the Effective Date designate any Restricted Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted Subsidiary at any time by providing written notice to the Administrative Agent; provided that (i) immediately before and after such designation, no Default or Event of Default shall have occurred and be continuing, (ii) immediately after giving pro forma effect to such designation, the Consolidated Leverage Ratio shall be no greater than 4.06:1.00 as of the last day of the period of four (4) fiscal quarters most recently completed for which financial statements have been delivered pursuant to Section 6.1 (and, as a condition precedent to the effectiveness of any such designation, the Borrower shall deliver to the Administrative Agent a certificate setting forth in reasonable detail the pro forma calculations demonstrating satisfaction of such test) and (iii) no Subsidiary may be designated as an Unrestricted Subsidiary if, after such designation, it would be a “Restricted Subsidiary” for the purpose of any Material Indebtedness or any Junior Financing. The designation of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the Borrower therein at the date of designation in an amount equal to the fair market value of the assets of such Subsidiary (less the amount of the Indebtedness of such Subsidiary on the date of such

 

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designation) that is allocated to the ownership interest of the relevant Group Member in such Subsidiary. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence, at the time of designation, of any Investment, Indebtedness or Liens in such Subsidiary (equal to the amounts then owed by such Subsidiary) and a return on any Investment by the Borrower in Unrestricted Subsidiaries pursuant to the preceding sentence in an amount equal to the fair market value of the assets of such Subsidiary (less the amount of the Indebtedness of such Subsidiary on the date of such re-designation) that is allocated to the ownership interest of the relevant Group Member in such Subsidiary.

 

SECTION 7.  NEGATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitments remain in effect or any Term Loan or other amount is owing to any Lender or Agent hereunder (other than Unasserted Contingent Obligations), the Borrower shall not, and shall not permit any of its Restricted Subsidiaries to:

 

7.1.                             Indebtedness . Create, issue, incur, assume, become liable in respect of or suffer to exist any Indebtedness, except:

 

(a)                                  Indebtedness of any Loan Party pursuant to any Loan Document;

 

(b)                                  (i) Indebtedness of any Loan Party owed to any other Loan Party; (ii) unsecured Indebtedness of any Loan Party owed to any Group Member that is not a Loan Party; (iii) Indebtedness of any Group Member that is not a Loan Party owed to any other Group Member that is not a Loan Party; and (iv) subject to Section 7.6(g), Indebtedness of any Group Member that is not a Loan Party owed to a Loan Party; provided , that (x) no such Indebtedness that is owed to a Loan Party shall be evidenced by a promissory note or other instrument unless such promissory note or other instrument is pledged to the Collateral Agent in accordance with the terms of the Guarantee and Collateral Agreement and (y) in the case of any such Indebtedness of a Loan Party owed to a Group Member that is not a Loan Party, such Indebtedness shall be subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent;

 

(c)                                   Guarantee Obligations incurred by (i) any Group Member that is a Loan Party of obligations of any other Loan Party and, subject to Section 7.6(g), of any Group Member that is not a Loan Party and (ii) any Group Member that is not a Loan Party of obligations of any Loan Party or any other Group Member;

 

(d)                                  Indebtedness outstanding on the Effective Date and listed on Schedule 7.1 and any Permitted Refinancing thereof;

 

(e)                                   Indebtedness (including, without limitation, Capital Lease Obligations) of the Borrower or any Restricted Subsidiary secured by Liens permitted by Section 7.2(g) in an aggregate principal amount not to exceed the greater of $25,000,000 and 15% of LTM EBITDA at any date of determination and any Permitted Refinancing thereof;

 

(f)                                    Indebtedness in respect of Hedge Agreements that are permitted by Section 7.10;

 

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(g)                                   Indebtedness of the Borrower or any Restricted Subsidiary in respect of performance, bid, surety, indemnity, appeal bonds, completion guarantees and other obligations of like nature and guarantees and/or obligations as an account party in respect of the face amount of letters of credit in respect thereof (including worker’s compensation claims, environmental remediation and other environmental matters and obligations in connection with insurance or regulatory requirements), in each case securing obligations not constituting Indebtedness for borrowed money, provided in the ordinary course of business;

 

(h)                                  Indebtedness arising from the endorsement of instruments in the ordinary course of business;

 

(i)                                      Indebtedness of a Person existing at the time such Person became a Restricted Subsidiary (such Person, an “ Acquired Person ”) or assumed in any acquisition of assets not prohibited under this Agreement, but only to the extent that (i) such Indebtedness was not created or incurred in contemplation of such Person becoming a Restricted Subsidiary or such acquisition, (ii) any Liens securing such Indebtedness attach only to the assets of the Acquired Person or to such acquired assets and (iii) the Consolidated Leverage Ratio, in each case, calculated on a pro forma basis after giving effect to such acquisition as if such acquisition had occurred on the first day of the most recent period of four (4) consecutive fiscal quarters of the Borrower for which financial statements have been delivered pursuant to Section 6.1 shall be either (x) no greater than 4.06:1.00 or (y) no greater than the Consolidated Leverage Ratio as of the last day of the most recent period of four (4) consecutive fiscal quarters of the Borrower for which financial statements have been delivered pursuant to Section 6.1; provided that the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Loan Parties assumed pursuant to this Section 7.1(i) and the aggregate principal amount of Indebtedness assumed in any acquisition of assets not prohibited under this Agreement pursuant to this Section 7.1(i) shall not exceed, together with the aggregate principal amount of Indebtedness incurred by Restricted Subsidiaries that are not Loan Parties pursuant to Section 7.1(j) and Section 7.1(m), the greater of $50,000,000 and 30% of LTM EBITDA at any date of determination, and any Permitted Refinancing of any thereof;

 

(j)                                     Incremental Equivalent Debt incurred by the Borrower or any Restricted Subsidiary; provided that (i) immediately before and after giving effect to the incurrence of such Incremental Equivalent Debt, (A) no Default or Event of Default exists or would result therefrom to the extent the proceeds of such Incremental Equivalent Debt are not used to finance a Limited Condition Acquisition or (B) no Default or Event of Default arising under Section 8.1(a) or Section 8.1(f) and no other Default or Event of Default the absence of which is a condition required by the lenders or investors providing such Incremental Equivalent Debt exists or would result therefrom to the extent the proceeds of such Incremental Equivalent Debt are used to finance a Limited Condition Acquisition and (ii) the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Loan Parties incurred pursuant to this Section 7.1(j) shall not exceed, together with the aggregate principal amount of Indebtedness assumed by Restricted Subsidiaries that are not Loan Parties pursuant to Section 7.1(i), the aggregate principal amount of Indebtedness assumed in any acquisition of assets not prohibited under this Agreement pursuant to Section 7.1(i) and the aggregate principal amount of Indebtedness incurred by Restricted Subsidiaries that are not Loan Parties pursuant to Section 7.1(m), the greater of $50,000,000 and 30% of LTM EBITDA at any date of determination, and any Permitted Refinancing of any thereof;

 

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(k)                                  (i) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided , however , that such Indebtedness is extinguished within ten (10) Business Days of incurrence and (ii) Indebtedness arising in the ordinary course of business in connection with Cash Management Agreements;

 

(l)                                      Indebtedness of the Borrower or any Restricted Subsidiary that may be deemed to exist in connection with agreements providing for indemnification, purchase price adjustments and similar obligations in connection with acquisitions or sales of assets and/or businesses;

 

(m)                              Indebtedness of any Restricted Subsidiary that is not a Loan Party; provided that the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Loan Parties incurred pursuant to this Section 7.1(m) shall not exceed, together with the aggregate principal amount of Indebtedness assumed by Restricted Subsidiaries that are not Loan Parties pursuant to Section 7.1(i), the aggregate principal amount of Indebtedness assumed in any acquisition of assets not prohibited under this Agreement pursuant to Section 7.1(i) and the aggregate principal amount of Indebtedness incurred by Restricted Subsidiaries that are not Loan Parties pursuant to Section 7.1(j), the greater of $50,000,000 and 30% of LTM EBITDA at any date of determination, and any Permitted Refinancing of any thereof;

 

(n)                                  Indebtedness arising from judgments or decrees not constituting an Event of Default under Section 8(h);

 

(o)                                  Indebtedness of the Borrower or any Restricted Subsidiary under letter of credit facilities in an aggregate amount not to exceed the greater of $20,000,000 and 12% of LTM EBITDA at any date of determination;

 

(p)                                  other Indebtedness of the Group Members in an aggregate principal amount (for all Group Members) not in excess of the greater of $40,000,000 and 25% of LTM EBITDA at any date of determination, and any Permitted Refinancing of any thereof;

 

(q)                                  (i) Credit Agreement Refinancing Indebtedness issued, incurred or otherwise obtained in exchange for or to refinance Term Loans so long as the requirements of Section 3.2(a) are complied with and (ii) any Permitted Refinancing of any thereof;

 

(r)                                     Indebtedness consisting of promissory notes issued to current or former officers, directors, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Capital Stock of any Group Member permitted by Section 7.5;

 

(s)                                    Indebtedness consisting of obligations of the Borrower or any Restricted Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with any Permitted Acquisitions or any other Investment permitted hereunder;

 

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(t)                                     Indebtedness consisting of (i) the financing of insurance premiums payable on insurance policies maintained by the Group Members or (ii) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;

 

(u)                                  unsecured Guarantee Obligations incurred in the ordinary course of business (and consistent with past practice) in respect of obligations to suppliers, customers, franchisees, lessors and licensees;

 

(v)                                  to the extent constituting Indebtedness, unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable Requirements of Law;

 

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

 

(x)                                  unsecured Indebtedness incurred in the ordinary course of business (and consistent with past practice) in respect of obligations of the Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services.

 

For purposes of determining compliance with this Section 7.1, in the event that an item of Indebtedness (or any portion thereof) at any time meets the criteria of more than one of the categories described above, the Borrower, in its sole discretion, may classify or reclassify (or later divide, classify or reclassify) such item of Indebtedness (or any portion thereof) and shall only be required to include the amount and type of such Indebtedness in one of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in Section 7.1(a) and (ii) Indebtedness described on Schedule 7.1 will be deemed to have been incurred in reliance only on the exception in Section 7.1(d).  The accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest, premium, fees or expenses, in the form of additional Indebtedness or preferred stock shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.1.

 

7.2.                             Liens . Create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except for:

 

(a)                                  Liens for taxes, assessments, charges or other governmental levies (i) that are not material in amount, (ii) that are not yet delinquent for a period of more than sixty (60) days or (iii) that are being contested in good faith by appropriate proceedings; provided that adequate reserves with respect thereto under this clause (iii) are maintained on the books of the Group Members, as the case may be, in conformity with (and to the extent required by) GAAP;

 

(b)                                  Liens imposed by law, including, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business (i) that are not material in amount or (ii) that are not overdue for a period of more than sixty (60) days (or, if more than sixty (60) days overdue, no action has been taken to enforce such Lien) or are being contested in good faith and by appropriate proceedings for which appropriate reserves have been established in accordance with (and to the extent required by) GAAP;

 

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(c)                                   (i) pledges, deposits or Liens in connection with workers’ compensation laws, payroll taxes, unemployment insurance laws and other social security legislation, or letters of credit or guarantees issued in respect thereof, other than any Lien imposed by ERISA with respect to a Single Employer Plan or Multiemployer Plan and (ii) pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to the Borrower or any Restricted Subsidiary;

 

(d)                                  pledges or deposits to secure the performance of bids, government contracts and trade contracts (other than for borrowed money), leases, statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature (including those to secure health, safety and environmental obligations) incurred in the ordinary course of business or letters of credit or guarantees issued in respect thereof;

 

(e)                                   easements (including reciprocal easement agreements), rights-of-way, restrictions (including zoning restrictions), encroachments, covenants, conditions, by-law, regulation, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, protrusions and other similar encumbrances and minor title defects affecting real property that, in the aggregate, do not materially interfere with the ordinary conduct of the business of the Borrower and the Restricted Subsidiaries, taken as a whole, and any exception on the title policies issued in connection with the Mortgaged Property;

 

(f)                                    Liens in existence on the Effective Date listed on Schedule 7.2 and any Lien granted as a replacement or substitute therefor; provided that any such replacement or substitute Lien (i) does not secure an aggregate amount of Indebtedness or other obligations, if any, greater than that permitted under Section 7.1(d) and (ii) does not encumber any property other than the property permitted to be subject thereto pursuant to Section 7.1(d) (including improvements and accessions to such property);

 

(g)                                   Liens securing permitted Indebtedness of the Borrower or any Restricted Subsidiary incurred to finance the acquisition, construction, improvement or repair of fixed or capital assets and any Permitted Refinancings thereof; provided that (i) such Liens shall be created substantially simultaneously with (or within 180 days after) the acquisition, construction, improvement or repair of such fixed or capital assets, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and additions, accessions and the proceeds of sale thereof and (iii) the amount of Indebtedness secured thereby is not increased;

 

(h)                                  Liens created pursuant to the Security Documents or any other Loan Document;

 

(i)                                      Liens approved by the Collateral Agent appearing on Schedule B to the policies of title insurance being issued in connection with the Mortgages (if any);

 

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(j)                                     any interest or title of a lessor or licensee under any lease or license entered into by the Borrower or any Restricted Subsidiary in the ordinary course of its business and covering only the assets so leased or licensed;

 

(k)                                  licenses granted with respect to Intellectual Property, leases or subleases granted to third parties in the ordinary course of business which, individually or in the aggregate, do not materially interfere with the ordinary conduct of the business of the Loan Parties or any of their Subsidiaries and for which reasonable consideration (taking into account the value of the license, lease or sublease) was received;

 

(l)                                      Liens securing or otherwise arising out of judgments, decrees, attachments, orders or awards not constituting an Event of Default under Section 8(h) or securing appeal or other surety bonds related to such judgments so long as (i) any appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree, order or award have not been finally terminated, (ii) the period within which such proceedings may be initiated has not expired or (iii) no more than 60 days have passed after (x) such judgment, decree, order or award has become final or (y) such period within which such proceedings may be initiated has expired;

 

(m)                              Liens perfected or evidenced by UCC financing statement filings (or similar filings in other applicable jurisdictions) regarding operating leases and consignment arrangements entered into by the Borrower and its Restricted Subsidiaries in the ordinary course of business, including precautionary UCC financing statements;

 

(n)                                  Liens existing on property acquired by the Borrower or any Restricted Subsidiary at the time such property is so acquired or existing on the property of any Person at the time such Person becomes a Restricted Subsidiary after the Effective Date; provided that (i) such Lien is not created in contemplation of such acquisition or such Person becoming a Restricted Subsidiary; (ii) such Lien does not extend to any other property (other than proceeds, products or accessions or after-acquired property) of any Group Member following such acquisition or such Person becoming a Restricted Subsidiary; and (iii) the Indebtedness secured by such Liens is permitted by Section 7.1(i);

 

(o)                                  Liens (i) of a collecting bank arising under Section 4-210 of the Uniform Commercial Code on the items in the course of collection and (ii) in favor of a banking or other financial institution arising as a matter of law or contract encumbering deposits or other funds or assets maintained with a financial institution (including the right of set off) and that are within the general parameters customary in the banking industry, including, without limitation, customary liens for customary fees and expenses relating to the operation and maintenance of such deposits;

 

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

 

(q)                                  statutory and common law landlords’ liens under leases to which the Borrower or any of the Restricted Subsidiaries is a party;

 

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(r)                                     Liens on assets of Restricted Subsidiaries that are not Loan Parties securing Indebtedness of such Restricted Subsidiaries that are not Loan Parties to the extent the Indebtedness secured thereby is permitted under Section 7.1;

 

(s)                                    Liens not otherwise permitted by this Section so long as the aggregate outstanding principal amount of the obligations secured thereby do not exceed greater of $20,000,000 and 12% of LTM EBITDA at any date of determination;

 

(t)                                     Liens on cash advances in favor of the seller of any property to be acquired in an Investment permitted pursuant to Section 7.6(i) or Section 7.6(u) to be applied against the purchase price for such Investment;

 

(u)                                  Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by the Borrower or any Restricted Subsidiary in the ordinary course of business in accordance with past practices of the Borrower;

 

(v)                                  Liens deemed to exist in connection with Investments in repurchase agreements under Section 7.6 and reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts maintained in the ordinary course of business and not for speculative purposes;

 

(w)                                Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks or other financial institutions not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Borrower or any Restricted Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Borrower or any Restricted Subsidiary or (iii) relating to purchase orders and other agreements entered into with customers of the Borrower or any Restricted Subsidiary in the ordinary course of business;

 

(x)                                  Liens solely on any cash earnest money deposits made by the Borrower or any Restricted Subsidiary in connection with any letter of intent or purchase agreement permitted hereunder;

 

(y)                                  Liens on the Collateral securing Incremental Equivalent Debt, subject to an intercreditor agreement (which intercreditor agreement, in the case of Incremental Equivalent Debt secured on a junior basis to the Liens securing the Obligations, shall provide for the subordination of the Liens securing such Incremental Equivalent Debt to the Liens securing the Obligations) in form and substance reasonably satisfactory to the Administrative Agent;

 

(z)                                   ground leases in respect of real property on which facilities owned or leased by the Borrower or any Restricted Subsidiary are located;

 

(aa)                           Liens in respect of unearned premiums on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

 

(bb)                           Liens on specific items of inventory or other goods and the proceeds thereof securing such Person’s obligations in respect of documentary letters of credit or banker’s acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or goods;

 

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(cc)                             Liens constituting Dispositions permitted by Section 7.4 (other than Section 7.4(n));

 

(dd)                           Liens on the Collateral securing Permitted First Priority Replacement Debt and Permitted Junior Priority Replacement Debt incurred pursuant to Section 7.1(q), in each case subject to an intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent;

 

(ee)                             Liens (i) on Capital Stock in joint ventures or Unrestricted Subsidiaries; provided that such Liens secure Indebtedness of such joint venture or Unrestricted Subsidiary, as applicable, (ii) consisting of customary rights of first refusal and tag, drag and similar rights in joint venture agreements and agreements with respect to non-Wholly Owned Subsidiaries and (iii) consisting of put and call arrangements or similar arrangements, in the case of joint ventures and non-Wholly Owned Subsidiaries, pursuant to its Organizational Documents, joint venture agreement or similar agreement or document;

 

(ff)                               Liens on deposits or other amounts held in escrow to secure contractual payments (contingent or otherwise) payable by the Borrower or its Restricted Subsidiaries to a seller after the consummation of a Permitted Acquisition;

 

(gg)                             Liens securing Indebtedness incurred pursuant to Section 7.1(o); and

 

(hh)                           Liens securing Indebtedness incurred pursuant to Section 7.1(f) in an amount not to exceed $5,000,000.

 

7.3.                             Fundamental Changes . Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of, all or substantially all of its property or business, except that:

 

(a)                                  any Restricted Subsidiary may be merged, consolidated or be amalgamated (i) with or into the Borrower ( provided that the Borrower shall be the continuing or surviving corporation), (ii) with or into any other Restricted Subsidiary ( provided that if only one party to such transaction is a Subsidiary Guarantor, the Subsidiary Guarantor shall be the continuing or surviving corporation) or (iii) subject to Section 7.6(g), with or into any other Group Member;

 

(b)                                  any Group Member may Dispose of all or substantially all of its assets (upon voluntary liquidation, winding up, dissolution or otherwise) to any Loan Party or, subject to Section 7.6(g) (to the extent applicable), any other Group Member;

 

(c)                                   any Restricted Subsidiary that is not a Loan Party may (i) merge, consolidate or amalgamate with or into any Restricted Subsidiary that is not a Loan Party or (ii) dispose of all or substantially all of its assets (including any Disposition that is in the nature of a voluntary liquidation, winding up, dissolution or otherwise) to (x) another Restricted Subsidiary that is not a Loan Party or (y) to a Loan Party;

 

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(d)                                  the Borrower and any Restricted Subsidiary may enter into any merger, consolidation, amalgamation or similar transaction with another Person to effect a transaction permitted under Section 7.6 (other than Section 7.6(w)); provided that the surviving entity is or becomes a Restricted Subsidiary; provided , further , in the event such merger, consolidation, amalgamation or similar transaction involves the Borrower or a Subsidiary Guarantor, either (i) the Borrower or such Subsidiary Guarantor is the surviving entity or (ii) the surviving entity (if other than the Borrower or such Subsidiary Guarantor), which shall be an entity organized or existing under the laws of the United States of America, any State thereof or the District of Columbia (or, if such Subsidiary Guarantor was organized or existing in another jurisdiction, such other jurisdiction), expressly assumes all the obligations of the Borrower or such Subsidiary Guarantor under the Loan Documents pursuant to agreements reasonably satisfactory to the Administrative Agent and the Collateral Agent, and such Subsidiary Guarantor, unless it is such surviving entity, shall have confirmed in writing by a supplement to the relevant Security Document that its guarantee of the Obligations pursuant to the Guarantee and Collateral Agreement shall apply to such surviving entity’s obligations under the Loan Documents and shall have reaffirmed in writing the granting of Liens in its Collateral to secure the Obligations, and such surviving entity shall have delivered to the Administrative Agent an officer’s certificate stating that such merger, consolidation, amalgamation or similar transaction and such supplements and reaffirmations preserve the enforceability of the Guarantee and the perfection and of the Liens under the applicable Security Documents; and

 

(e)                                   a merger, consolidation, amalgamation, liquidation, winding up, dissolution or sale of all or substantially all property or business, the purpose of which is to effect a transaction permitted under Section 7.4, shall be permitted.

 

Notwithstanding anything in this Agreement to the contrary, a Permitted Reorganization Transaction shall be permitted on the terms and conditions set forth in the definition thereof.

 

7.4.                             Disposition of Property . Dispose of any of its property, whether now owned or hereafter acquired, or, in the case of any Restricted Subsidiary, issue or sell any shares of such Restricted Subsidiary’s Capital Stock to any Person:

 

(a)                                  Dispositions of (i) obsolete, damaged, uneconomic or worn out machinery, parts, property or equipment, or property or equipment no longer used or useful, in the conduct of its business, whether now owned or hereafter acquired or (ii) other property having a fair market value, in a single transaction or in a series of related transactions, not exceeding $1,000,000;

 

(b)                                  the sale of inventory and owned or leased vehicles, each in the ordinary course of business;

 

(c)                                   Dispositions permitted by Sections 7.3(a), (b) and (c);

 

(d)                                  the sale or issuance of any Group Member’s Capital Stock to any other Restricted Subsidiary’s (except that a Subsidiary Guarantor may issue Capital Stock only to the Borrower or another Subsidiary Guarantor);

 

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(e)                                   any Group Member may Dispose of any of its assets to a Loan Party or, subject to Section 7.6(g) (to the extent applicable), any other Group Member, and any Group Member that is not a Loan Party may Dispose of any assets, or issue or sell Capital Stock, to any other Group Member that is not a Loan Party;

 

(f)                                    Dispositions of cash or Cash Equivalents in transactions not otherwise prohibited by this Agreement;

 

(g)                                   licenses granted by Group Members with respect to Intellectual Property, or leases or subleases, granted to third parties in the ordinary course of business which, individually or in the aggregate, do not materially interfere with the ordinary conduct of the business of the Group Members and for which reasonable consideration (taking into account the value of the license, lease or sublease) was received;

 

(h)                                  the issuance or sale of shares of any Subsidiary’s Capital Stock to qualified directors if required by applicable Requirements of Law;

 

(i)                                      Dispositions or exchanges of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

 

(j)                                     Dispositions of leases entered into in the ordinary course of business, to the extent that they do not materially interfere with the business of the Borrower and any Restricted Subsidiary, taken as a whole;

 

(k)                                  the abandonment or other Disposition of Intellectual Property that is, in the reasonable judgment of the Borrower, no longer economically practicable to maintain and not material to the conduct of the business of the Borrower and the Restricted Subsidiaries, taken as a whole;

 

(l)                                      the Disposition of Property which constitutes a Recovery Event;

 

(m)                              Dispositions consisting of the sale, transfer, assignment or other Disposition of accounts receivable in connection with the collection, compromise or settlement thereof in the ordinary course of business and not as part of a financing transaction;

 

(n)                                  Dispositions (i) constituting Liens permitted by Section 7.2 (other than Section 7.2(cc)), Restricted Payments permitted by Sections 7.5 (other than Section 7.5(m)), or Investments permitted by Section 7.6 (other than Section 7.6(m)) or (ii) effected in connection with the entry into, performance under, or termination or unwinding of any Hedge Agreements permitted by Section 7.10;

 

(o)                                  leases, subleases, licenses or sublicenses with respect to real or personal property (other than Intellectual Property), in each case in the ordinary course of business and which do not materially interfere with the business of the Borrower and any Subsidiary, taken as a whole, including leases of unimproved real property encumbered by a Mortgage, on which real property the lessee may make improvements;

 

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(p)                                  so long as the proceeds thereof are applied pursuant to Section 3.2, Dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in the joint venture arrangements and similar binding arrangements;

 

(q)                                  any issuance or sale of Capital Stock in, or Indebtedness or other securities of, an Immaterial Subsidiary, an Unrestricted Subsidiary or a Subsidiary that is not a Wholly Owned Subsidiary of the Borrower or a Subsidiary Guarantor;

 

(r)                                     as long as no Event of Default is continuing or would result therefrom, any Disposition of property of any Group Member, or issuance or sale of Capital Stock by, the Borrower or any Restricted Subsidiary; provided that with respect to any Disposition made pursuant to this clause (r), such Disposition shall be valued at fair market value and such Group Member shall receive not less than 75% of such consideration in the form of cash or Cash Equivalents; provided further that (i) any liabilities (as shown on the most recent balance sheet of the Borrower provided hereunder or in the footnotes thereto) of such Group Member, other than liabilities that are by their terms subordinated in right of payment to the Obligations, that are assumed by the transferee with respect to the applicable Disposition and for which such Group Member shall have been validly released by all applicable creditors in writing, shall be deemed to be cash or Cash Equivalents, (ii) any securities received by such Group Member from such transferee that are convertible by such Group Member into cash or Cash Equivalents within 180 days following the closing of the applicable Disposition, shall be deemed to be cash or Cash Equivalents and (iii) any Designated Non-Cash Consideration received by such Group Member in respect of such Disposition having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (r) that is at that time outstanding, not in excess of $20,000,000 at the time of the receipt of such Designated Non-Cash Consideration, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value, shall be deemed to be cash or Cash Equivalents;

 

(s)                                    Dispositions or exchanges of any asset (other than Royalty Rights in existence on the Effective Date) to the extent that (i) such asset is exchanged for credit against the purchase price of similar replacement assets or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement assets;

 

(t)                                     sales of non-core assets acquired in connection with an acquisition permitted hereunder which, within 180 days of the date of the acquisition, are designated in writing to the Administrative Agent as being held for sale and not for the continued operation of the Borrower or any of the Restricted Subsidiaries or any of their respective businesses; provided that (i) the aggregate amount of such sales shall not exceed 20% of the fair market value of the acquired entity or business and (ii) each such sale is an arm’s-length transaction and the Borrower and the Restricted Subsidiaries receive at least fair market value;

 

(u)                                  Dispositions of Property related to compensation paid or to be paid, or benefits provided or to be provided, in the ordinary course of business.

 

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7.5.                             Restricted Payments . Declare or pay any dividend (other than dividends payable solely in Qualified Capital Stock (or warrants, options or rights to acquire Qualified Capital Stock) of the Person making such dividend) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Group Member, in each case, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower or any Restricted Subsidiary (collectively, “ Restricted Payments ”), except that:

 

(a)                                  each Restricted Subsidiary may make Restricted Payments to the Borrower or any Subsidiary Guarantor or any other Person that owns a direct equity interest in such Subsidiary in proportion to such Person’s ownership interest in such Subsidiary;

 

(b)                                  each Restricted Subsidiary may make Restricted Payments to the Borrower and to Wholly Owned Subsidiaries (and, in the case of a Restricted Payment by a non-Wholly Owned Subsidiary, to the Borrower and any Subsidiary and to each other owner of Capital Stock or other equity interests of such Subsidiary on a pro rata basis based on their relative ownership interests);

 

(c)                                   the Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Qualified Capital Stock (or warrants, options or rights to acquire Qualified Capital Stock) of such Person;

 

(d)                                  so long as no Event of Default has occurred and is continuing or would result therefrom, the Borrower may purchase, redeem or otherwise acquire shares of its Qualified Capital Stock (or warrants, options or rights to acquire Qualified Capital Stock), in each case, to the extent consideration therefor consists of the proceeds received from the substantially concurrent issue of new shares of its Qualified Capital Stock (or warrants, options or rights to acquire Qualified Capital Stock);

 

(e)                                   the Borrower and each Restricted Subsidiary may make payments related to compensation paid or to be paid, or benefits provided or to be provided, in the ordinary course of business;

 

(f)                                    the Borrower and the Restricted Subsidiaries may repurchase, redeem or otherwise acquire shares of their Capital Stock in an aggregate amount such that the cash consideration for all acquisitions made pursuant to this clause (f) shall not exceed the aggregate amount of cash proceeds received by the Borrower and the Restricted Subsidiaries from the exercise of employee stock options;

 

(g)                                   so long as no Event of Default shall have occurred and be continuing or would result therefrom and the Available Amount Condition has been met, the Borrower may make Restricted Payments in an aggregate amount not to exceed the then Available Amount;

 

(h)                                  the Borrower and the Restricted Subsidiaries may make Restricted Payments in an aggregate amount such that all such Restricted Payments since the Effective Date made pursuant to this clause (h) shall not exceed the greater of $25,000,000 and 15% of LTM EBITDA, less the aggregate amount of payments, prepayments, repurchases, redemptions and defeasances made pursuant to Section 7.7(a)(vi) in each case determined as of the date of determination;

 

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

 

(j)                                     so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Borrower and the Restricted Subsidiaries may make any Restricted Payment if, after giving pro forma effect to such Restricted Payment, the Consolidated Leverage Ratio as of the last day of the period of four (4) fiscal quarters most recently completed for which financial statements have been delivered pursuant to Section 6.1 would be no greater than 2.00:1.00;

 

(k)                                  the Borrower may and any Restricted Subsidiary may make distributions to the Borrower so that the Borrower may (A) repurchase its Capital Stock owned by or (B) make payments to, employees, officers, consultants or directors (or former employees, officers, consultants or directors) of the Borrower or the Restricted Subsidiaries or any family member of, or trust or other entity for the benefit of, any of the foregoing persons (including any voting trust or limited partnership pursuant to which such Capital Stock have been transferred solely for the benefit of the foregoing persons and their heirs), pursuant to and in accordance with shareholders’ agreements, stock option, stock appreciation rights or similar equity incentive or equity based incentive or management incentive plans, in each case, approved by the Borrower’s board of directors, or in connection with the death or disability of such employees, officers, consultants or directors in an aggregate amount, not to exceed $5,000,000 in any fiscal year (plus, starting with the 2019 fiscal year, the portion of such amount not utilized in the immediately preceding year pursuant to this Section 7.5(k) up to a maximum aggregate amount of $10,000,000 for any fiscal year inclusive of the amount so carried forward), plus an amount not to exceed the Net Proceeds of key man life insurance policies received by the Borrower or its Restricted Subsidiaries less the amount of Restricted Payments previously made with the cash proceeds of such key man life insurance policies;

 

(l)                                      the Borrower and its Restricted Subsidiaries may pay cash payments in lieu of fractional shares in connection with (i) any dividend, split or combination of its Capital Stock or any Permitted Acquisition (or similar Investment) or (ii) the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Borrower;

 

(m)                              to the extent constituting Restricted Payments, the Borrower and its Restricted Subsidiaries may (i) enter into transactions expressly permitted by Sections 7.3, 7.4 (other than Section 7.4(n)), 7.6 or 7.8 (other than Section 7.8(c)) or (ii) enter into, perform under, or terminate or unwind any Hedge Agreements permitted by Section 7.10;

 

(n)                                  the Borrower may make cash payments in connection with any conversion of Convertible Indebtedness (other than the 2023 Convertible Notes) in an aggregate amount not to exceed the par principal amount of such Convertible Indebtedness;

 

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(o)                                  the Borrower may repurchase Capital Stock of the Borrower when such Capital Stock is granted or vested to officers, directors and employees of any Group Member in order to pay withholding taxes on the value of such Capital Stock payable by such officers, directors and employees; and

 

(p)                                  repurchases of Capital Stock of the Borrower deemed to occur upon exercise of stock options or warrants if such Capital Stock represents a portion of the exercise price of such options or warrants.

 

7.6.                             Investments . Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or all or substantially all of the assets of, any assets constituting a business line or unit of, or a division of, any Person (all of the foregoing, “ Investments ”), except:

 

(a)                                  extensions of trade credit in the ordinary course of business;

 

(b)                                  Investments in assets that were cash or Cash Equivalents when such Investment was made;

 

(c)                                   any Guarantee Obligation permitted by Section 7.1;

 

(d)                                  loans and advances to officers, directors and employees of any Group Member in the ordinary course of business (including for travel, entertainment, relocation and similar expenses) or in connection with such Person’s purchase of Capital Stock of the Borrower or to permit the payment of taxes with respect thereto (provided that, to the extent such loans or advances are made in cash, the amount of such loans and advances used to acquire any such Capital Stock shall be contributed to the Borrower in cash as common equity), in an aggregate amount for all Group Members not to exceed $5,000,000 at any time outstanding;

 

(e)                                   so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Borrower and the Restricted Subsidiaries may make any Investments if, after giving pro forma effect to such Investment, the Consolidated Leverage Ratio as of the last day of the period of four (4) fiscal quarters most recently completed for which financial statements have been delivered pursuant to Section 6.1 would be no greater than 2.00:1.00;

 

(f)                                    intercompany Investments by (i) any Group Member in any Loan Party; provided that no such intercompany Investment that is a loan or advance owed to a Loan Party by a Group Member that is not a Loan Party shall be evidenced by a promissory note or other instrument unless such promissory note or other instrument is pledged to the Collateral Agent in accordance with the terms of the Guarantee and Collateral Agreement and (ii) any Group Member that is not a Loan Party to any other Group Member that is not a Loan Party;

 

(g)                                   intercompany Investments by any Loan Party in another Group Member (including a Person that becomes a Restricted Subsidiary as a result of such Investments), that, after giving effect to such Investment, is not a Loan Party (including, without limitation, Guarantee Obligations with respect to obligations of any such Subsidiary, loans made to any such Subsidiary and Investments resulting from mergers with or sales of assets to any such Subsidiary) in an aggregate amount (valued at fair market value) not to exceed the greater of $40,000,000 and 25% of LTM EBITDA, in each case determined as of the date of determination (plus the aggregate amount of Returns in respect thereof);

 

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(h)                                  Investments in the ordinary course of business consisting of endorsements for collection or deposit or lease, utility and other similar deposits and deposits with suppliers in the ordinary course of business;

 

(i)                                      Investments in connection with Permitted Acquisitions; provided that the amount of such Permitted Acquisitions, with respect to the acquisition of Persons that do not become Loan Parties and/or assets that do not constitute Collateral, shall not exceed the greater of $50,000,000 and 30% of LTM EBITDA, in each case determined as of the date of determination (plus the aggregate amount of Returns in respect thereof);

 

(j)                                     Investments consisting of Hedge Agreements permitted by Section 7.10 (including the entry into, performance under and termination or unwinding thereof);

 

(k)                                  Investments (i) existing on the Effective Date or made pursuant to legally binding written contracts in existence on the Effective Date or (ii) contemplated on the Effective Date and set forth on Schedule 7.6, and in each case any modification, replacement, renewal, reinvestment or extension thereof; provided that the amount of any such Investment is not increased at the time of such extension or renewal;

 

(l)                                      Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors or other Persons or in connection with the bankruptcy or reorganization of suppliers or customers or in settlement of delinquent obligations of, and other disputes with, suppliers or customers arising in the ordinary course of business;

 

(m)                              Investments received as consideration in connection with Dispositions permitted under Section 7.4 (other than Section 7.4(n));

 

(n)                                  advances of payroll payments to employees in the ordinary course of business;

 

(o)                                  Investments to the extent that payment for such Investments is made solely with Capital Stock of the Borrower;

 

(p)                                  Investments held by a Person that becomes a Restricted Subsidiary after the Effective Date or of a Person merged into the Borrower or merged or consolidated with a Restricted Subsidiary in accordance with Section 7.3 after the Effective Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

 

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(q)                                  Guarantee Obligations of the Group Members of leases (other than Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into in the ordinary course of business;

 

(r)                                     Investments consisting of purchases and acquisitions of assets or services in the ordinary course of business and consistent with past practices;

 

(s)                                    Investments by the Borrower or any of its Restricted Subsidiaries in Unrestricted Subsidiaries and joint ventures (or similar arrangements) in an aggregate amount at any one time outstanding not to exceed the greater of $35,000,000 and 20% of LTM EBITDA (plus (A) the aggregate amount of Returns in respect thereof and (B) the gain in any fair market value of the Investments made under this clause (s) in any Unrestricted Subsidiary at the time of redesignation as a Restricted Subsidiary);

 

(t)                                     in addition to Investments otherwise expressly permitted by this Section, Investments in an aggregate amount not to exceed the then Available Amount;

 

(u)                                  additional Investments in an aggregate amount at any one time outstanding not to exceed the greater of $50,000,000 and 30% of LTM EBITDA (plus (A) the aggregate amount of Returns in respect thereof and (B) the gain in any fair market value of the Investments made under this clause (u) in any Unrestricted Subsidiary at the time of redesignation as a Restricted Subsidiary), in each case determined as of the date of determination;

 

(v)                                  Investments in any Restricted Subsidiary that is not a Loan Party in an amount required to permit such Subsidiary to consummate a Permitted Acquisition or other Investment permitted hereunder substantially contemporaneously with the receipt by such Subsidiary of the proceeds of such Investment; provided that the Borrower shall comply with Section 6.10 and Section 6.11 to the extent applicable (and subject to the time periods therein);

 

(w)                                Investments permitted by Section 7.3 (other than Section 7.3(d)); and

 

(x)                                  Investments in connection with a Permitted Reorganization Transaction.

 

The amount of any Investment, other than a Guarantee Obligation, shall be the amount actually invested, as determined at the time of each such Investment, without adjustment for subsequent increases or decreases in the value of such Investment.

 

7.7.                             Optional Payments and Modifications of Certain Debt Instruments .

 

(a)                                  Make any optional or voluntary payment, prepayment, repurchase or redemption of or otherwise optionally or voluntarily defease any Junior Financing except for:

 

(i)                                      optional or voluntary payments, prepayments, repurchases, redemptions or defeasances in an aggregate amount such that all such optional or voluntary payments, prepayments, repurchases, redemptions or defeasances since the Effective Date made pursuant to this clause (i) shall not exceed the greater of $20,000,000 and 12% of LTM EBITDA at any date of determination;

 

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(ii)                                   so long as no Event of Default shall have occurred and be continuing or would result therefrom, the Borrower and the Restricted Subsidiaries may make any optional or voluntary payments, prepayments, repurchases and redemptions of Junior Financings Restricted Payment if, after giving pro forma effect to such optional or voluntary payment, prepayment, repurchase or redemption, the Consolidated Leverage Ratio as of the last day of the period of four (4) fiscal quarters most recently completed for which financial statements have been delivered pursuant to Section 6.1 would be no greater than 2.00:1.00;

 

(iii)                                additional optional or voluntary payments, prepayments, repurchases and redemptions of Junior Financings in the aggregate pursuant to this clause (iii) not to exceed the Available Amount during the term of this Agreement, provided that, in the case of clause (iii), no Event of Default shall have occurred and be continuing or would result therefrom and the Available Amount Condition has been met;

 

(iv)                               the refinancing thereof with the Net Cash Proceeds of any Permitted Refinancing of any of the foregoing or any Indebtedness (other than Indebtedness that is owed to the Borrower or any Restricted Subsidiary);

 

(v)                                  the conversion of any Junior Financing to Qualified Capital Stock;

 

(vi)                               optional or voluntary payments, prepayments, repurchases, redemptions or defeasances in an aggregate amount such that all such optional or voluntary payments, prepayments, repurchases, redemptions or defeasances since the Effective Date made pursuant to this clause (vi) shall not exceed the greater of $25,000,000 and 15% of LTM EBITDA, less the aggregate amount of Restricted Payments made pursuant to Section 7.5(h), in each case determined as of the date of determination; and

 

(vii)                            the Borrower may make cash payments in connection with any conversion of Convertible Indebtedness (other than the 2023 Convertible Notes) in an aggregate amount not to exceed the par principal amount of such Convertible Indebtedness.

 

(b)                                  Amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Junior Financing (other than any amendment that is not materially adverse to the Lenders (in the good faith judgment of the Borrower) and in any event any such amendment, modification, waiver or other change that in the case of any Junior Financing, would extend the maturity or reduce the amount of any payment of principal thereof or reduce the rate or extend any date for payment of interest).

 

(c)                                   Amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Organizational Document of any Loan Party if such amendment, modification, waiver or change would reasonably be expected to have a Material Adverse Effect.

 

For the avoidance of doubt, this Section 7.7 shall not restrict the making of any “AHYDO catch up payment” with respect to, and required by the terms of, any Junior Financing.

 

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7.8.                             Transactions with Affiliates . Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, for a transaction value in excess of $5,000,000 per individual transaction (or series of related transactions), other than on fair and reasonable terms substantially as favorable to the Borrower or such Restricted Subsidiary as would be obtainable by the Borrower or such Restricted Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate, except:

 

(a)                                  transactions between or among (i) Loan Parties or (ii) Group Members ( provided that transactions between any Loan Party, on one hand, and a Group Member that is not a Loan Party, on one other hand, shall be limited to transactions not otherwise prohibited by this Agreement);

 

(b)                                  employment and severance arrangements between the Borrower and the Restricted Subsidiaries and their respective officers and employees in the ordinary course of business and transactions pursuant to stock option plans, stock incentive plans and employee benefit plans and arrangements in the ordinary course of business;

 

(c)                                   any Restricted Payment permitted by Section 7.5 (other than Section 7.5(m)), any Investment permitted by Section 7.6(d), Section 7.6(o), Section 7.6 (p) or Section 7.6(s) and any transaction related to a Permitted Reorganization Transaction;

 

(d)                                  transactions pursuant to agreements, instruments or arrangements in existence on the Effective Date and set forth on Schedule 7.8 or any amendment thereto to the extent such an amendment is not adverse to the Lenders in any material respect;

 

(e)                                   any agreement between any Person and an Affiliate of such Person existing at the time such Person is acquired by or merged or amalgamated into the Borrower or its Restricted Subsidiaries pursuant to the terms of this Agreement; provided that such agreement was not entered into in contemplation of such acquisition, merger or amalgamation, or any amendment thereto (so long as any such amendment is not disadvantageous to the Lenders in any material respect in the good faith judgment of the Borrower when taken as a whole as compared to such agreement as in effect on the date of such acquisition, merger or amalgamation);

 

(f)                                    the Borrower and its Restricted Subsidiaries may enter into any customary Tax sharing agreement or arrangement (it being understood and agreed that any payments required thereunder by the Borrower that would be a Restricted Payment are not permitted hereunder unless permitted pursuant to terms of Section 7.5);

 

(g)                                   payments to or from, and transactions with, joint ventures (to the extent any such joint venture is only an Affiliate as a result of Investments by the Borrower and its Restricted Subsidiaries in such joint venture) in the ordinary course of business;

 

(h)                                  any transaction in which the Borrower or any of the Restricted Subsidiaries, as the case may be, deliver to the Administrative Agent a letter from an Independent Financial Advisor stating that such transaction is fair to the Borrower or such Restricted Subsidiary from a financial point of view or is on fair and reasonable terms substantially as favorable to the Borrower or such Restricted Subsidiary as would be obtainable by the Borrower or such Restricted Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; and

 

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(i)                                      payment of director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans) and indemnification arrangements, in each case approved by the board of directors of the Borrower or any Restricted Subsidiary, as applicable.

 

7.9.                             Lines of Business . Enter into any business, either directly or through any Restricted Subsidiary, except for those businesses in which the Borrower and its Subsidiaries are engaged on the date of this Agreement or that are reasonably related, incidental, ancillary, corollary, synergistic or complementary thereto.

 

7.10.                      Hedge Agreements . Enter into any Hedge Agreement, except (a) Hedge Agreements entered into to hedge or mitigate risks to which the Borrower or any Restricted Subsidiary has actual or potential exposure, (b) Hedge Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from floating to fixed rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Restricted Subsidiary and (c) in connection with a Permitted Bond Hedge Transaction or Permitted Warrant Transaction.

 

7.11.                      Changes in Fiscal Periods .

 

(a)                                  Permit any change in the fiscal year of the Borrower; provided , however , that the Borrower may, upon written notice to the Administrative Agent, change its fiscal year on no more than one occasion to any other fiscal year reasonably acceptable to the Administrative Agent, in which case, the Borrower and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are necessary to reflect such change in fiscal year.

 

7.12.                      Negative Pledge Clauses . Enter into or suffer to exist or become effective any agreement that prohibits, limits or imposes any condition upon the ability of any Loan Party to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired for the benefit of the Lenders with respect to the Obligations other than (a) this Agreement and the other Loan Documents, (b) any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby), (c) any restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, (d) customary provisions in leases, licenses and other contracts restricting the assignment thereof, (e) any other agreement that does not restrict in any manner (directly or indirectly) Liens created pursuant to the Loan Documents or any Collateral securing the Obligations and does not require the direct or indirect granting of any Lien securing any Indebtedness or other obligation by virtue of the granting of Liens on or pledge of Property of any Loan Party to secure the Obligations and (f) any prohibition or limitation that (i) exists pursuant to applicable Requirements of Law, (ii) consists of customary restrictions and conditions contained in any agreement relating to any Liens permitted under Section 7.2, transaction permitted under Section 7.3 or the sale of any property permitted under Section 7.4, (iii) restricts subletting or assignment of leasehold interests contained in any lease governing a leasehold interest of a Group Member, (iv) exists in any agreement in effect at the time such

 

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Subsidiary becomes a Restricted Subsidiary, so long as such agreement was not entered into in contemplation of such Person becoming a Subsidiary, (v) exists in any instrument governing Indebtedness assumed in connection with any Permitted Acquisition, which encumbrance or restriction is not applicable to any Person, or the Property of any Person, other than the Person or the Property of the Person so acquired, (vi) exists on the Effective Date and are listed on Schedule 7.12, (vii) are customary provisions in joint venture agreements and other similar agreements applicable to joint ventures to the extent permitted under this Agreement, (viii) exists in any agreement governing Indebtedness of a Restricted Subsidiary that is not a Loan Party that is permitted by Section 7.1 so long as such restriction is only applicable to the relevant Restricted Subsidiary that is not a Loan Party, (ix) are restrictions on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business, (x) comprise restrictions imposed by any agreement governing Indebtedness entered into on or after the Effective Date and permitted under Section 7.1 that are, taken as a whole, in the good faith judgment of the Borrower, no more restrictive with respect to the Borrower or any Restricted Subsidiary than customary market terms for Indebtedness of such type (and, in any event, are no more restrictive than the restrictions contained in this Agreement), so long as the Borrower shall have determined in good faith that such restrictions will not affect its obligation or ability to make any payments required hereunder, or (xi) is imposed by any amendments or refinancings that are otherwise permitted by the Loan Documents or the contracts, instruments or obligations referred to in this Section 7.12; provided that such amendments and refinancings are no more materially restrictive with respect to such prohibitions and limitations than those in effect prior to such amendment or refinancing (as determined in good faith and certified in writing to the Administrative Agent by a Responsible Officer of the Borrower).

 

7.13.                      Clauses Restricting Subsidiary Distributions . Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary of the Borrower that is not a Loan Party to (a) make Restricted Payments in respect of any Capital Stock of such Restricted Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Restricted Subsidiary of the Borrower, (b) make loans or advances to, or other Investments in, the Borrower or any other Restricted Subsidiary of the Borrower or (c) transfer any of its assets to the Borrower or any other Restricted Subsidiary of the Borrower, except for such encumbrances or restrictions existing under or by reason of:

 

(i)                                      any restrictions existing under the Loan Documents;

 

(ii)                                   any restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Restricted Subsidiary;

 

(iii)                                any instrument governing Indebtedness assumed in connection with any Permitted Acquisition, which encumbrance or restriction is not applicable to any Person, or the Property of any Person, other than the Person or the Property of the Person so acquired;

 

(iv)                               any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby or other Indebtedness permitted by Section 7.1(t)(i) (in which case, any prohibition or limitation shall only be effective against the assets financed thereby);

 

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(v)                                  restrictions and conditions existing on the Effective Date identified on Schedule 7.13 (but not to any amendment or modification expanding the scope or duration of any such restriction or condition);

 

(vi)                               restrictions or conditions imposed by any agreement relating to Liens permitted by this Agreement but solely to the extent that such restrictions or conditions apply only to the property or assets subject to such permitted Lien;

 

(vii)                            customary provisions in leases, licenses and other contracts entered into in the ordinary course of business restricting the assignment thereof;

 

(viii)                         customary restrictions in joint venture agreements and the Organizational Documents of a Subsidiary that is not a Wholly Owned Subsidiary of the Borrower or a Subsidiary Guarantor and other similar agreements and documents applicable to joint ventures and such non-Wholly Owned Subsidiaries and applicable solely to such joint ventures or non-Wholly Owned Subsidiaries;

 

(ix)                               any agreement of a Foreign Subsidiary governing Indebtedness permitted to be incurred or permitted to exist under Section 7.1;

 

(x)                                  any agreement or arrangement already binding on a Person when it becomes a Restricted Subsidiary so long as such agreement or arrangement was not created in anticipation of such acquisition;

 

(xi)                               Requirements of Law;

 

(xii)                            customary restrictions and conditions contained in any agreement relating to any transaction permitted under Section 7.3 or the sale of any property permitted under Section 7.4 pending the consummation of such transaction or sale;

 

(xiii)                         restrictions imposed by any agreement governing Indebtedness of a Restricted Subsidiary that is not a Loan Party that is permitted by Section 7.1 so long as such restriction is only applicable to the relevant Restricted Subsidiary that is not a Loan Party;

 

(xiv)                        restrictions imposed by any agreement governing Indebtedness entered into on or after the Effective Date and permitted under Section 7.1 that are, taken as a whole, in the good faith judgment of the Borrower, no more restrictive with respect to the Borrower or any Restricted Subsidiary than customary market terms for Indebtedness of such type (and, in any event, are no more restrictive than the restrictions contained in this Agreement), so long as the Borrower shall have determined in good faith that such restrictions will not affect its obligation or ability to make any payments required hereunder;

 

(xv)                           any agreement restricting cash or other deposits imposed by customers under contracts entered into in the ordinary course of business; or

 

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(xvi)                        any encumbrances or restrictions imposed by any amendments or refinancings that are otherwise permitted by the Loan Documents or the contracts, instruments or obligations referred to in this Section 7.13; provided that such amendments or refinancings are no more materially restrictive with respect to such encumbrances and restrictions than those in effect prior to such amendment or refinancing (as determined in good faith and certified in writing to the Administrative Agent by a Responsible Officer of the Borrower).

 

SECTION 8.  EVENTS OF DEFAULT

 

8.1.                             Events of Default . If any of the following events shall occur and be continuing:

 

(a)                                  the Borrower shall fail to pay any principal of any Term Loan when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Term Loan, or any other amount payable hereunder or under any other Loan Document, within five (5) days after any such interest or other amount becomes due in accordance with the terms hereof; or

 

(b)                                  any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been untrue in any material respect on or as of the date made or deemed made; or

 

(c)                                   any Loan Party shall default in the observance or performance of any agreement contained in Section 6.4(a)(i) (with respect to the Borrower only), Section 6.7(a) or Section 7 of this Agreement; or

 

(d)                                  any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section 8), and such default shall continue unremedied for a period of thirty (30) days after receipt by the Borrower of written notice thereof from the Administrative Agent; or

 

(e)                                   any Group Member (i) defaults in making any payment of any principal of any Material Indebtedness (including any Guarantee Obligation or Hedge Agreement (after taking into account all applicable netting arrangements) that constitutes Material Indebtedness, but excluding the Term Loans) on the scheduled or original due date with respect thereto; or (ii) defaults in making any payment of any interest on any such Material Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) defaults in the observance or performance of any other agreement or condition relating to any such Material Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist (other than, with respect to Indebtedness arising from a Hedge Agreement, termination events or equivalent events pursuant to the terms of such Hedge Agreement and not as a result of any default thereunder by any Group Member), the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Material Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Material Indebtedness to become due prior to its stated maturity or to become subject to a

 

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mandatory offer to purchase by the obligor thereunder (other than any event which triggers any conversion right of holders of Convertible Indebtedness); provided that such failure is unremedied and is not waived by the holders of such Indebtedness; provided further that this clause (e)(iii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such Indebtedness; or

 

(f)                                    (i) any Group Member (other than an Immaterial Subsidiary) shall commence any case, proceeding or other action (A) under any existing or future Debtor Relief Law seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, examinership, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator, liquidator, examiner or other similar official for it or for all or any substantial part of its assets under a Debtor Relief Law, or any Group Member (other than an Immaterial Subsidiary) shall make a general assignment, composition, compromise, or arrangement with or for the benefit of its creditors; or (ii) there shall be commenced against any Group Member (other than an Immaterial Subsidiary) any case, proceeding or other action of a nature referred to in clause (i) above that (x) results in the entry of an order for relief or any such adjudication or appointment or other relief with respect to it or its debts or (y) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distress, distraint or similar process against all or any substantial part of the assets of the Group Members, taken as a whole, that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) any Group Member (other than an Immaterial Subsidiary) shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Group Member (other than an Immaterial Subsidiary) shall admit in writing its inability to, pay its debts as they become due; or

 

(g)                                   (i) there exists any fact or circumstance that reasonably would be expected to result in the imposition of a Lien or security interest on any property or any Group Member pursuant to Section 430(k) of the Code or Section 303(k) of ERISA or a violation of Section 436 of the Code; (ii) there occurs an ERISA Event described in clause (b) of the definition thereof; or (iii) there occurs one or more other ERISA Events which has resulted or would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; or

 

(h)                                  one or more judgments or decrees shall be entered against any Group Member and the same shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof and any such judgments or decrees is for the payment of money, individually or in the aggregate (not paid or fully covered by insurance as to which the relevant insurance company has acknowledged coverage), of $40,000,000 or more; or

 

(i)                                      any Security Documents relating to material assets of the Group Members, taken as a whole, shall cease, for any reason, to be in full force and effect, or any Loan Party or any Subsidiary of any Loan Party shall so assert, or any Lien created by any of the Security Documents relating to material assets of the Group Members, taken as a whole, shall cease to be

 

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enforceable and of the same effect and priority purported to be created thereby (other than because of any action by the Collateral Agent); or any Loan Party or any Subsidiary of any Loan Party shall so assert; or

 

(j)                                     the guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason, to be in full force and effect or any Loan Party or any Subsidiary of any Loan Party shall so assert; or

 

(k)                                  a Change of Control occurs; or

 

(l)                                      (i) any of the Obligations of the Borrower under the Loan Documents for any reason shall cease to be “Designated Senior Indebtedness,” under the indenture governing the 2023 Convertibles Notes (or in any Junior Financing Documentation governing any Permitted Refinancing thereof) as determined by a court of competent jurisdiction in a final and non-appealable judgment, (ii) the payment subordination provisions set forth in such indenture governing the 2023 Convertibles Notes (or in any Junior Financing Documentation governing any Permitted Refinancing thereof) shall, in whole or in part, cease to be effective or cease to be legally valid, binding and enforceable against the holders of such Junior Financing as determined by a court of competent jurisdiction in a final and non-appealable judgment or (iii) any Loan Party or any Subsidiary of any Loan Party shall assert any of the foregoing;

 

then, and in any such event, (A) if such event is an Event of Default specified in paragraph (f) above with respect to the Borrower, automatically the Commitments shall immediately terminate and the Term Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, terminate the Commitments and declare the Term Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section 8, presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Borrower.  Upon the occurrence and during the continuance of an Event of Default, each of the Administrative Agent and the Collateral Agent may exercise on behalf of itself, the Lenders and the other Secured Parties all rights and remedies available to it, the Lenders and the other Secured Parties under the Loan Documents or at law or in equity.  Notwithstanding anything to the contrary contained herein or in the other Loan Documents, no amounts received from any Guarantor shall be applied to any Excluded Swap Obligations of such Guarantor.

 

SECTION 9.  THE AGENTS

 

9.1.                             Appointment and Authority . Each of the Lenders hereby irrevocably appoints Morgan Stanley Senior Funding, Inc. to act on its behalf as the Administrative Agent and the Collateral Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent and the Collateral Agent to take such actions on its behalf and to exercise such powers and perform such duties as are delegated to the Administrative Agent and the

 

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Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Section 9 (other than as expressly provided herein) are solely for the benefit of the Agents and the Lenders, and neither the Borrower nor any other Loan Party shall have any rights as a third-party beneficiary of any such provisions (other than as expressly provided herein).  It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent, the Collateral Agent or any other Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Requirements of Law.  Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.  The provisions of this Section 9 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the Payment in Full, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

 

9.2.                             Rights as a Lender .  Any Person serving as the Administrative Agent or the Collateral Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent or the Collateral Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include any Person serving as the Administrative Agent or the Collateral Agent hereunder in its capacity as a Lender.  Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrowe