FALSE000152962800015296282024-09-032024-09-03
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): September 3, 2024
SMART SAND, INC.
(Exact name of registrant as specified in its charter) | | | | | | | | | | | | | | |
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| Delaware | | 001-37936 | | 45-2809926 |
(State or other jurisdiction
of incorporation) | | (Commission
File Number) | | (I.R.S. Employer
Identification No.) |
1000 Floral Vale Boulevard, Suite 225
Yardley, Pennsylvania 19067
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (281) 231-2660
Not Applicable
(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:
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| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of Each Class | | Trading Symbol | | Name of each exchange on which registered |
| Common Stock, $0.001 par value | | SND | | NASDAQ |
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 ☐
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. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On September 3, 2024, Smart Sand, Inc. (the “Company”) entered into a new five-year senior secured asset-based credit facility (the “ABL Credit Facility”) pursuant to: (i) a credit agreement among the Company, the subsidiary borrowers and guarantors party thereto, First-Citizens Bank & Trust Company, as issuing bank, swingline lender and agent, and certain other lenders from time to time party thereto (the “Credit Agreement”); and (ii) a guarantee and collateral agreement among the Company, the subsidiary borrowers and guarantors party thereto and First-Citizens Bank & Trust Company, as agent (the “Security Agreement”).
The ABL Credit Facility provides for non-amortizing revolving loans in an aggregate principal amount of up to $30.0 million, subject to a borrowing base comprised of eligible inventory and accounts receivable (subject to certain reserves and customary conditions). Approximately $1.0 million was drawn on the ABL Credit Facility at closing and an additional $29.0 million remains available under the initial borrowing base. Borrowings under the ABL Credit Facility bear interest at a rate per annum equal to an applicable margin of 2.75% plus the secured overnight financing rate (SOFR).
All obligations under the ABL Credit Facility are guaranteed on a senior basis by our wholly-owned domestic subsidiaries, subject to certain exceptions, and are secured, subject to permitted liens and other exceptions (which exceptions include all of our owned real estate and sand reserves), by a first-priority security interest in our assets.
The ABL Credit Facility contains a number of covenants that, among other things, restrict our ability to incur liens, incur indebtedness, make certain restricted payments, merge or consolidate and dispose of assets. In addition, the ABL Credit Facility requires us in certain limited circumstances to maintain a minimum fixed charge coverage ratio of 1.1 to 1.0. The ABL Credit Facility also contains certain affirmative covenants and events of default customary for facilities of this type.
The above summary does not purport to be a complete description of the Credit Agreement and Security Agreement and is qualified in its entirety by the contents of the Credit Agreement and Security Agreement, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K.
Item 1.02 Termination of a Material Definitive Agreement.
On September 3, 2024, in connection with entry into the Credit Agreement, the Company terminated its existing senior secured asset-based credit facility (the “Prior Credit Facility”) under a credit agreement, dated as of December 13, 2019, among the Company, as borrower, Jefferies Finance LLC, as issuing bank, swingline lender and agent, and the other lenders party thereto, which was filed with the Securities and Exchange Commission as Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Prior Credit Facility was scheduled to mature on December 13, 2024 and provided non-amortizing revolving loans in an aggregate principal amount of up to $20.0 million.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth above in Item 1.01 in this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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| Exhibit Number | | Description |
| 10.1 | | |
| 10.2 | | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | | | SMART SAND, INC. |
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| Dated: | September 9, 2024 | | | | By: | | /s/ Lee E. Beckelman |
| | | | | | | Lee E. Beckelman |
| | | | | | | Chief Financial Officer |
CREDIT AGREEMENT
dated as of
September 3, 2024,
among
SMART SAND, INC.,
as Parent, a Borrower and Administrative Loan Party
THE OTHER BORROWERS PARTY HERETO
as Borrowers,
THE GUARANTORS PARTY HERETO,
as Guarantors,
THE LENDERS PARTY HERETO
as Lenders
and
FIRST-CITIZENS BANK & TRUST COMPANY,
as Agent
FIRST-CITIZENS BANK & TRUST COMPANY,
as Sole Lead Arranger and Sole Bookrunner
Table of Contents
Page
SECTION 1.01. Defined Terms 1 SECTION 1.02. Terms Generally 54 SECTION 1.03. Pro Forma Calculations 56 SECTION 1.04. Classification of Loans and Borrowings 57 SECTION 1.05. [Intentionally Omitted] 58 SECTION 1.06. Basket Amounts and Application of Multiple Relevant Provisions 58 SECTION 1.07. Limited Condition Transactions 58 SECTION 1.08. Interest Rates 59 SECTION 1.09. Division of Limited Liability Company 59 SECTION 1.10. Computation of Interests, Fees, Yield Protection. 59
ARTICLE II THE CREDITS 60 SECTION 2.01. Commitments 60 SECTION 2.03. Borrowing Procedure 63 SECTION 2.04. Evidence of Debt; Repayment of Loans 63 SECTION 2.06. Interest on Loans 66 SECTION 2.07. Default Interest 66 SECTION 2.08. [Intentionally Omitted] 66 SECTION 2.09. Termination and Reduction of Commitments 66 SECTION 2.10. Application of Term SOFR to Outstanding Loans, Conversion and Continuation of Borrowings 67 SECTION 2.11. Protective Advances and Optional Overadvances 68 SECTION 2.12. Voluntary Prepayment 70 SECTION 2.13. Mandatory Prepayments 71 SECTION 2.14. Change in Circumstances 72 SECTION 2.15. Illegality 73 SECTION 2.16. Funding Losses 73 SECTION 2.17. Pro Rata Treatment 74 SECTION 2.18. Sharing of Setoffs 74 SECTION 2.19. Payments 75 SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to Mitigate 79 SECTION 2.22. Swingline Loans 80 SECTION 2.23. Letters of Credit 83 SECTION 2.24. Increase in Total Revolving Credit Commitments 88 SECTION 2.25. Joint and Several Liability of Borrowers 90
SECTION 2.26. Defaulting Lenders 92 SECTION 2.27. Inability to Determine Rates Generally. 94 SECTION 2.28. Benchmark Replacement Setting; Conforming Changes. 94 SECTION 2.29. Funding Losses. 96 ARTICLE III REPRESENTATIONS AND WARRANTIES 96 SECTION 3.01. Organization; Powers 96 SECTION 3.02. Authorization 97 SECTION 3.03. Enforceability 97 SECTION 3.04. Governmental Approvals 97 SECTION 3.05. Financial Statements; Projections 98 SECTION 3.06. No Material Adverse Change 98 SECTION 3.07. Title to Properties; etc 98 SECTION 3.08. Subsidiaries 98 SECTION 3.09. Litigation; Compliance with Laws 99 SECTION 3.10. Agreements 99 SECTION 3.11. Federal Reserve Regulations 99 SECTION 3.12. Investment Company Act; etc 100 SECTION 3.13. Use of Proceeds 100 SECTION 3.14. Tax Matters 100 SECTION 3.15. No Material Misstatements 100 SECTION 3.17. Environmental Matters 101 SECTION 3.18. Insurance 101 SECTION 3.19. Security Documents 101 SECTION 3.20. Locations of Real Property 102 SECTION 3.21. Labor Matters 102 SECTION 3.22. Solvency 103 SECTION 3.23. OFAC; Anti-Corruption and Sanctions; Beneficial Ownership Certificate 103 SECTION 3.24. Intellectual Property 104 SECTION 3.25. Eligible Receivables 104 SECTION 3.26. Eligible Inventory 104 SECTION 3.27. Location of Inventory 105 SECTION 3.28. Inventory Records 105 ARTICLE IV CONDITIONS OF LENDING 105 SECTION 4.01. All Credit Events 105 SECTION 4.02. First Credit Event 106 ARTICLE V AFFIRMATIVE COVENANTS 108 SECTION 5.01. Existence;Compliance with Laws;Businesses and Properties 108 SECTION 5.02. Insurance 109
SECTION 5.03. Obligations and Taxes 109 SECTION 5.04. Financial Statements, Reports, etc 110 SECTION 5.05. Litigation and Other Notices 112 SECTION 5.06. Certain Information Regarding Loan Parties 113 SECTION 5.07. Maintaining Records; Access to Properties and Inspections; Quarterly Conference Calls 113 SECTION 5.08. Use of Proceeds 114 SECTION 5.09. Locations of Inventory/Subleased Equipment 114 SECTION 5.10. Compliance with Environmental Laws 114 SECTION 5.11. Notifications Regarding Environmental Matters 115 SECTION 5.12. Further Assurances; Additional Guarantors and Borrowers; Additional Collateral 115 SECTION 5.13. Collateral Field Examinations/Appraisals 117 SECTION 5.14. Compliance with Flood Laws. 118 SECTION 5.15. Post-Closing Covenants. 118 ARTICLE VI NEGATIVE COVENANTS 118 SECTION 6.01. Indebtedness 118 SECTION 6.03. Sale and Lease-Back Transactions 124 SECTION 6.04. Investments, Loans and Advances 125 SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions 128 SECTION 6.06. Restricted Payments; Restrictive Agreements 131 SECTION 6.07. Transactions with Affiliates 133 SECTION 6.08. Business of Loan Parties and Subsidiaries 134 SECTION 6.09. Other Indebtedness and Agreements 134 SECTION 6.10. [Intentionally Omitted] 135 SECTION 6.11. Financial Covenant 135 SECTION 6.12. Fiscal Year 136 SECTION 6.13. Sanctions 136 SECTION 6.14. Sanctioned Person 137 ARTICLE VII EVENTS OF DEFAULT 137 SECTION 7.01. Events of Default 137 SECTION 7.02. Application of Proceeds 140 ARTICLE VIII THE AGENT 141 SECTION 8.01. Appointment 141 SECTION 8.02. Agent in its Individual Capacity 142 SECTION 8.03. Exculpatory Provisions. 142 SECTION 8.04. Reliance by Agent 143 SECTION 8.05. Delegation of Duties 144 SECTION 8.06. Successor Agent 144
SECTION 8.07. Bankruptcy Related Matters 145 SECTION 8.08. Non-Reliance on Agent and Other Lenders 146 SECTION 8.09. Name Agents 146 SECTION 8.10. Erroneous Payments. 146 SECTION 8.11. Flood Laws. 149 ARTICLE IX MISCELLANEOUS 150 SECTION 9.01. Notices; Electronic Communications 150 SECTION 9.02. Survival of Agreement 152 SECTION 9.03. Binding Effect 152 SECTION 9.04. Successors and Assigns 152 SECTION 9.05. Expenses; Indemnity 156 SECTION 9.06. Right of Setoff 158 SECTION 9.07. Applicable Law 159 SECTION 9.08. Waivers; Amendment 159 SECTION 9.09. Interest Rate Limitation 162 SECTION 9.10. Entire Agreement 163 SECTION 9.11. WAIVER OF JURY TRIAL 163 SECTION 9.12. Severability 163 SECTION 9.13. Counterparts 163 SECTION 9.14. Headings 164 SECTION 9.15. Jurisdiction; Consent to Service of Process 164 SECTION 9.16. Confidentiality 164 SECTION 9.17. Lender Action 166 SECTION 9.18. PATRIOT Act Notice 166 SECTION 9.19. Release of Liens 166 SECTION 9.20. No Advisory or Fiduciary Responsibility 166 SECTION 9.21. Acknowledgement and Consent to Bail-In of EEA Financial Institutions 167 SECTION 9.22. Smart Sand as Administrative Loan Party 167 SECTION 9.23. Bank Product Providers 168 SECTION 9.24. Acknowledgement Regarding Any Supported QFCs. 169
SCHEDULES
Schedule 1.01(a) Lenders and Revolving Credit Commitments
Schedule 1.01(c) Subsidiary Guarantors
Schedule 1.01(d) Locations of Inventory
Schedule 3.08(a) Subsidiaries
Schedule 3.08(b) Immaterial Subsidiaries
Schedule 3.09(a) Certain Litigation
Schedule 3.18 Insurance
Schedule 3.19(a) Filing Offices
Schedule 3.20 Real Property
Schedule 5.15 Post-Closing Covenants
Schedule 6.01(a) Existing Indebtedness
Schedule 6.02(a) Existing Liens
Schedule 6.04(a) Existing Investments
Schedule 6.07 Existing Affiliate Transactions
Schedule 9.01 Certain Addresses for Notices
EXHIBITS
Exhibit A - Form of Administrative Questionnaire
Exhibit B - Form of Assignment and Acceptance
Exhibit C-1 - Form of Borrowing Request
Exhibit C-2 - Form of Swingline Borrowing Request
Exhibit D - [Intentionally Omitted]
Exhibit E - Form of Compliance Certificate
Exhibit F - Form of Solvency Certificate
Exhibit G - Form of Intercompany Note
Exhibit H Form of Borrowing Base Certificate
Exhibit I Form of Joinder
CREDIT AGREEMENT
This CREDIT AGREEMENT (as amended, amended and restated, supplemented, renewed, extended, replaced and/or otherwise modified from time to time, this “Agreement”) dated as of September 3, 2024, is entered into by and among SMART SAND, INC., a Delaware corporation (“Parent”), each Subsidiary (such term and each other capitalized term used but not defined herein having the meaning given to it in Article I) of Parent party hereto on the date hereof as a “Borrower”, and those additional entities that hereafter become parties hereto as “Borrowers” in accordance with the terms hereof by executing the form of Joinder attached hereto as Exhibit I (each, a “Borrower” and individually and collectively, jointly and severally, the “Borrowers”), each Subsidiary Guarantor and together with any other Person that at any time after the date hereof becomes a Guarantor (each a “Guarantor” and collectively, the “Guarantors”), the Lenders, and FIRST-CITIZENS BANK & TRUST COMPANY, as Issuing Bank, Swingline Lender, and as agent (in such capacity, including any successor thereto, the “Agent”) for the Lenders.
IN CONSIDERATION of the mutual covenants and undertakings herein contained, Loan Parties, Lenders and Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION I.1.17Defined Terms. As used in this Agreement, the following terms shall have the meanings specified below:
“Acquired Assets” shall have the meaning assigned to such term in Section 6.04(k).
“Acquired Entity” shall have the meaning assigned to such term in Section 6.04(k).
“Acquisition” shall have the meaning assigned to such term in Section 6.04(k).
“Adjusted Term SOFR” shall mean, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation, plus (b) the Term SOFR Adjustment. In no event shall Adjusted Term SOFR equal less than the Floor.
“Administrative Loan Party” has the meaning specified therefor in Section 9.22 of this Agreement.
“Administrative Questionnaire” shall mean an Administrative Questionnaire in the form of Exhibit A, or such other form as may be supplied from time to time by Agent.
“Advisors” shall mean legal counsel (including local and foreign counsel), auditors, accountants, consultants, appraisers, engineers or other advisors.
“Affected Equity Cure Testing Periods” shall have the meaning assigned to such term in Section 6.11(c).
“Affected Financial Institution” shall mean (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” shall mean, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided, however, that, for purposes of the definition of “Eligible Assignee”, the term “Affiliate” shall also include any Person that directly or indirectly owns 10% or more of any class of Equity Interests of the Person specified or that is an officer or director of the Person specified. Neither Agent nor the Lead Arranger nor any Affiliate thereof shall be deemed to be an “Affiliate” of any Loan Parties for purposes of this Agreement.
“Agent” shall have the meaning assigned to such term in the introductory statement to this Agreement.
“Agent Fee Letter” shall mean the confidential Fee Letter, dated the Closing Date, among the Loan Parties and Agent.
“Agent Fees” shall have the meaning assigned to such term in Section 2.05(b).
“Aggregate Revolving Credit Exposure” shall mean the aggregate amount of the Lenders’ Revolving Credit Exposures.
“Agreement” shall have the meaning assigned to such term in the introductory statement hereto.
“Anti-Corruption Laws” shall mean the U.S. Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010, as amended, and all other Applicable Laws and regulations or ordinances concerning or relating to bribery, money laundering or corruption in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business.
“Anti-Money Laundering Laws” shall mean the Money Laundering Control Act of 1986 and all other Applicable Laws, rules or regulations in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business that relates to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto.
“Anti-Terrorism Law” shall mean any law relating to terrorism or money laundering, including the Patriot Act.
“Applicable Law” shall mean all laws, rules, regulations and governmental guidelines applicable to the Person conduct, transaction, agreement or matter in question, including statutory law, common law and equitable principles, as well as provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.
“Applicable Margin” shall mean, for any day, with respect to Revolving Loans (a) 1.75 %, in the case of Base Rate Loans, and (b) 2.75%, in the case of Term SOFR Loans.
“Asset Sale” shall mean the sale, transfer or other disposition (by way of merger, casualty, condemnation or otherwise) by any Loan Party or any Subsidiary to any Person other than a Loan Party or any Subsidiary of (a) any Equity Interests of any Loan Party or any Subsidiary (other than (i) directors’ qualifying shares and (ii) in the case of a Foreign Subsidiary, nominal amounts of shares required by Applicable Law to be held by local nationals) or (b) any other assets of any Loan Party or any Subsidiary; provided that, notwithstanding the foregoing, none of the following items will be deemed to be an Asset Sale:
(i) the sale, transfer or other disposition of Inventory, damaged, obsolete or worn out assets, equipment no longer used or useful in the business of Loan Parties or any Subsidiary, Permitted Investments and other assets, in each case sold, transferred or otherwise disposed of in the ordinary course of business;
(ii) the sale or discount without recourse of any Receivable which is not an Eligible Receivable in connection with the compromise thereof or the assignment of past due accounts receivable for collection and not in connection with any financing arrangement;
(iii) leases of properties in the ordinary course of business;
(iv) dispositions of property to the extent that (A) such property is exchanged for credit against the purchase price of similar replacement property or (B) the proceeds of such Disposition are promptly applied to the purchase price of such replacement property, including to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon), in each case, for use in a Permitted Business;
(v) any surrender or waiver of contract rights or the settlement, release or surrender of contract rights or other litigation claims in the ordinary course of business;
(vi) the unwinding of any Hedging Agreements;
(vii) the abandonment of any Intellectual Property rights of any Loan Party or any Subsidiary, which in the reasonable good faith determination of a Loan Party or a Subsidiary are not material to the conduct of the business of Loan Parties and their Subsidiaries taken as a whole;
(viii) the licensing or sublicensing of Intellectual Property or other general intangibles in a manner consistent with customary practice for a mining company;
(ix) the creation of a Permitted Lien (but not the sale or other disposition of property subject to the Permitted Lien);
(x) the disposition of cash or Permitted Investments;
(xi) the disposition of surface rights and termination of mining leases after the completion of mining and reclamation and termination or abandonment of water rights no longer needed for mining; and
(xii) Subleased Equipment Leases.
“Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by Agent, substantially in the form of Exhibit B, or such other form as shall be approved by Agent.
“Available Tenor” shall mean, as of any date of determination and with respect to the then-current Benchmark, as applicable, (a) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (b) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.28(d).
“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” shall mean (a) 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, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bank Product” shall mean any one or more of the following financial products or accommodations extended to any Loan Party by a Bank Product Provider: (a) Cash Management Services, or (b) transactions under Hedging Agreements.
“Bank Product Agreements” shall mean those agreements entered into from time to time by any Loan Party with a Bank Product Provider in connection with the obtaining of any of the Bank Products.
“Bank Product Obligations” shall mean (a) all Cash Management Obligations pursuant to Cash Management Services entered into with one or more Bank Products Providers, (b) all Hedging Obligations pursuant to Hedging Agreements entered into with one or more of the Bank Product Providers, and (c) all amounts that Agent or any Lender is obligated to pay to a Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product Provider to any Loan Party; provided, that, in order for any item described in clause (a), (b) or (c) above, as applicable, to
constitute “Bank Product Obligations,” the applicable Bank Product must have been provided on or after the Closing Date and Agent shall have received a Bank Product Provider Letter Agreement from the applicable Bank Product Provider within 10 days after the date of the provision of the applicable Bank Product to any Loan Party.
“Bank Product Provider” shall mean Agent, any Lender or any of their respective Affiliates (or any Person who at the time the respective Bank Product Agreement was entered into by such Person was an Agent, a Lender or an Affiliate thereof); provided, however that no such Person shall constitute a Bank Product Provider with respect to a Bank Product unless and until Agent shall have received a Bank Product Provider Letter Agreement from such Person with respect to the applicable Bank Product within 10 days after the provision of such Bank Product to any Loan Party.
“Bank Product Provider Letter Agreement” shall mean a letter agreement reasonably satisfactory to Agent, duly executed by the applicable Bank Product Provider, the applicable Loan Party and Agent.
“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy” as now or hereafter in effect, or any successor statute.
“Base Rate” shall mean for any day a fluctuating rate per annum equal to the highest of: (a) the Federal Funds Rate plus 1/2 of 1%; (b) the rate of interest in effect for such day as publicly announced from time to time by JPMorgan Chase Bank, N.A. as its “prime rate” in effect for such day; or (c) the most recently available Adjusted Term SOFR (as adjusted by any Floor) plus 1%. The Base Rate is not necessarily the lowest rate of interest charged by Lenders in connection with extensions of credit. Any change in the Base Rate due to a change in the “prime rate” announced by JPMorgan Chase Bank, N.A., the Federal Funds Rate or Adjusted Term SOFR shall be effective from and including the effective date of such change in the “prime rate” announced by JPMorgan Chase Bank, N.A., the Federal Funds Rate or Adjusted Term SOFR, respectively. For the avoidance of doubt, the Base Rate will in no event be less than 1% per annum. When used in reference to any Borrowing, Base Rate shall mean that the Loan, or the Loans comprising such Borrowing, bears or bear interest at a rate determined by reference to the Base Rate.
“Base Rate Loan” shall mean a Loan that accrues interest by reference to the Base Rate in accordance with the term of this Agreement.
“Benchmark” shall mean, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.28(a).
“Benchmark Replacement” shall mean, with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by the Agent for the applicable Benchmark Replacement Date:
(a) Daily Simple SOFR; or
(b) the sum of: (i) the alternate benchmark rate that has been selected by the Agent and the Borrowers giving due consideration to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities and (ii) the related Benchmark Replacement Adjustment.
If the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Agent and the Borrowers giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities at such time.
“Benchmark Replacement Date” shall mean the earliest to occur of the following events with respect to the then-current Benchmark:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(b) in the case of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the FRB, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Start Date” shall mean, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).
“Benchmark Unavailability Period” shall mean the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.28 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.28.
“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.
“Board of Directors” shall mean, with respect to any Person, (a) in the case of any corporation, the board of directors of such Person, (b) in the case of any limited liability company, the board of managers or board of directors, as applicable, of such Person, or if such limited liability company does not have a board of managers or board of directors, the functional equivalent of the foregoing, (c) in the case of any partnership, the board of directors or board of managers, as applicable, of the general partner of such Person and (d) in any other case, the functional equivalent of the foregoing.
“Borrower Materials” shall have the meaning assigned to such term in Section 9.01(e).
“Borrowers” shall have the meanings assigned to such term in the introductory statement to this Agreement.
“Borrowing” shall mean (a) Loans of the same Class and Type made, converted or continued on the same date and, in the case of Term SOFR Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.
“Borrowing Base” shall mean, as of any date of determination, the result of:
(a)85% of the amount of Eligible Receivables, plus
(b)the lesser of
(i)the Eligible Unbilled Receivables Sublimit, and
(ii)75% of the amount of Eligible Unbilled Receivables, plus
(c)the lesser of
(i)the Inventory Sublimit, and
(ii)the sum of
(A)the lesser of (1) the product of 65% multiplied by the Value of Eligible Inventory other than Eligible Inventory consisting of Domestic In-Transit Inventory (such determination may be made as to different categories of Eligible Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, and (2) the product of 85% multiplied by the Net Recovery Percentage identified in the most recent Inventory Appraisal, multiplied by the Value of Eligible Inventory other than Eligible Inventory consisting of Domestic In-Transit Inventory (such determination may be made as to different categories of Eligible Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, plus
(B)the least of (1) the product of 65% multiplied by the Value of Eligible Inventory consisting of Domestic In-Transit Inventory (such determination may be made as to different categories of Domestic In-Transit Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, (2) the product of 85% multiplied by the Net Recovery Percentage identified in the most recent Inventory Appraisal, multiplied by the Value of Eligible Inventory consisting of Domestic In-Transit Inventory (such determination may be made as to different categories of Domestic In-Transit Inventory based upon the Net Recovery Percentage applicable to such categories) at such time, and (3) the Domestic In-Transit Inventory Sublimit, minus
(d)the aggregate amount of Reserves, if any, established by Agent from time to time under (and subject to) Section 2.01(c).
“Borrowing Base Certificate” shall mean a certificate duly executed by a Financial Officer of the Administrative Loan Party, in substantially the form of Exhibit H, appropriately completed and evidencing the Borrowing Base.
“Borrowing Base Effective Date” shall mean the date on which Agent has received the Closing Date Deliverables.
“Borrowing Request” shall mean, as applicable, (a) a request by Administrative Loan Party in accordance with the terms of Section 2.03 and substantially in the form of Exhibit C-1 or (b) a request by the Administrative Loan Party in accordance with the terms of Section 2.22 and substantially in the form of Exhibit C-2, or, in either case, such other form as shall be approved by Agent.
“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks are authorized or required to close under the laws of either New York or the state where the Agent’s notice address pursuant to Schedule 9.01 is located or, with respect to a Letter of Credit, the state where the Issuing Bank’s notice address pursuant to Schedule 9.01 is located, and, if such day relates to Term SOFR, means any such day meeting the above requirements that is also a U.S. Government Securities Business Day.
“Capital Lease Obligations” of any Person shall mean, at the time any determination is to be made, subject to Section 1.02, the amount of the liabilities of such Person that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
“Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Cash Collateralize” shall mean to pledge and deposit with or deliver to Agent, for the benefit of one or more of the Secured Parties, as collateral for Letters of Credit, obligations of Lenders to fund participations in respect of Letters of Credit or the other Obligations, cash or
deposit account balances or, if Agent and the applicable Issuing Bank shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to Agent and each applicable Issuing Bank.
“Cash Dominion Period” shall mean any period (a) commencing on the date on which Excess Availability is less than, for 10 consecutive Business Days, the greater of (i) 15% of the Line Cap and (ii) $3,000,000 and Agent notifies Administrative Loan Party of the commencement of a “Cash Dominion Period” and ending on the first date thereafter on which Excess Availability has been equal to or in excess of, for 10 consecutive Business Days, the greater of (i) 15% of the Line Cap, and (ii) $3,000,000 and no Cash Dominion Period is otherwise in effect pursuant to clause (b) below, or (b) commencing on the date on which an Event of Default shall have occurred and, except with respect to any Event of Default under Section 7.01(g) or 7.01(h), Agent notifies Administrative Loan Party of the commencement of a “Cash Dominion Period” and ending on the first date thereafter on which no Event of Default exists and no Cash Dominion Period is otherwise in effect pursuant to clause (a) above.
“Cash Management Obligations” shall mean all present and future obligations of Borrowers and the other Loan Parties under or with respect to Cash Management Services.
“Cash Management Services” shall mean any (a) cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system), (b) credit cards, (c) credit card processing services, (d) debit cards, (e) stored value cards, (f) purchase cards and (g) other cash management arrangements.
“Casualty Event” shall mean any loss of title (other than through a consensual disposition of such property in accordance with this Agreement) or any loss of or damage to or any destruction of, or any condemnation or other taking (including by any Governmental Authority) of, any property of any Loan Party.
“CERCLA” shall mean the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. § 9601 et seq.).
“Change in Control” shall mean if (a) any “person” or “group” (within the meaning of Rule 13d-5 of the Exchange Act as in effect on the date hereof) other than the Permitted Holders shall own, directly or indirectly, Equity Interests representing more than 35% of (i) the aggregate economic rights or (ii) the aggregate voting power represented by the issued and outstanding Equity Interests of Parent or (b) any change in control (or similar event, however denominated) with respect Parent shall occur under and as defined in any indenture or agreement in respect of Material Indebtedness to which Parent is a party and shall have resulted in the occurrence of an event of default with respect to, a mandatory repayment of, or an obligation to make a mandatory offer to repurchase or repay, such Material Indebtedness, or (c) Parent fails to own, directly or indirectly, 100% of the Equity Interests of any other Loan Party (other than pursuant to a transaction permitted hereunder).
“Change in Law” shall mean the occurrence after the date of this Agreement (or with respect to any Lender, if later, the date on which such Lender became a Lender) of any of the following: (a) the adoption of any law, rule or regulation, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.14, by any lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided, however, that for purposes of this Agreement, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) 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 the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Charges” shall have the meaning assigned to such term in Section 9.09.
“Charles Young Holders” shall have the meaning assigned to such term in clause (b) of the definition of “Permitted Holders”.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans and, when used in reference to any Commitment, refers to whether such Commitment is a Revolving Credit Commitment or Swingline Commitment.
“Closing Date” shall mean September 3, 2024.
“Closing Date Deliverables” shall mean, collectively, (a) an Inventory Appraisal, and (b) a collateral field examination with respect to the Borrowers’ Inventory, Receivables and all of Borrowers’ assets and liabilities related thereto (i) which is conducted by a third-party consultant approved by Agent; (ii) which is conducted in such a manner and methodology and of such a scope as is acceptable to Agent; and (iii) upon which Agent and Lenders are expressly permitted to rely.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” shall mean all the “Collateral” as defined in the Guarantee and Collateral Agreement and any other Security Document.
“Collateral Access Agreement” shall mean a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in any Loan Party’s or its Subsidiaries’ books and records, Equipment, or Inventory, in each case, in form and substance reasonably satisfactory to Agent.
“Commitment” shall mean, with respect to any Lender, such Lender’s Revolving Credit Commitment and Swingline Commitment.
“Commitment Fee” shall have the meaning assigned to such term in Section 2.05(a).
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Communications” shall have the meaning assigned to such term in Section 9.01(d).
“Compliance Certificate” shall mean a certificate of a Financial Officer of Administrative Loan Party substantially in the form of Exhibit E.
“Conforming Changes” shall mean, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” “Business Day,” “U.S. Government Securities Business Day,” or “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 2.29 and other technical, administrative or operational matters) that the Agent decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent decides that adoption of any portion of such market practice is not administratively feasible or determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period plus
(a) without duplication and, except with respect to clause (a)(xi)(B) below, to the extent deducted in determining such Consolidated Net Income, the sum of:
(i) consolidated interest expense for such period;
(ii) consolidated tax expense for such period for taxes based on income, profits or capital gains, including federal, state, foreign, local, franchise and similar taxes and foreign withholding taxes paid or accrued during such period including penalties and interest related to such taxes or arising from any tax examinations;
(iii) all amounts attributable to depreciation and amortization for such period (including (A) accelerated depreciation and amortization from the write-off or write-down of tangible or intangible assets (other than the write-down of current assets) and (B) amortization of
deferred financing fees, debt issuance costs, commissions, fees and expenses, bridge, commitment and other financing fees, discounts and yield);
(iv) letter of credit fees for such period;
(v) any extraordinary, unusual or non-recurring expenses, losses or charges for such period;
(vi) any non-cash expenses, losses, charges, accruals or reserves for such period, including with respect to stock-based or other non-cash compensation, non-compete agreements and other similar agreements, goodwill or other asset impairments, impacts of fair value accounting, valuation of derivatives (including Hedging Agreements), write-offs of deferred financing costs and debt issuance costs, unrealized losses on foreign currency translation, non-cash charges in respect of capitalized research and development and organizational costs, non-cash losses from Permitted Joint Ventures and non-cash losses on any extinguishment of debt;
(vii) fees and expenses incurred during such period in connection with the Transactions and with unsuccessful efforts to refinance the Indebtedness under the Existing Credit Agreement, and all fees and expenses paid pursuant to the Loan Documents and in connection with the amendment, restatement, supplement, modification or waiver of any Indebtedness, whether or not successful, and all ratings agency costs and expenses;
(viii) fees and expenses incurred during such period in connection with any Equity Issuance, any proposed or actual issuance or incurrence of any Indebtedness, any proposed or actual acquisition (including a product acquisition, but otherwise excluding an acquisition in the ordinary course of business), any investment (other than intercompany investments and investments in the ordinary course of business) or any Asset Sales (or any other disposition of assets) permitted hereunder, including any financing fees, merger and acquisition fees (in each case, whether or not consummated);
(ix) expenses, losses or charges (A) incurred during such period to the extent covered by indemnification provisions in any agreement in connection with a Specified Transaction to the extent actually reimbursed in cash during such period, or, so long as Parent has made a determination that a reasonable basis exists for indemnification and only to the extent that such indemnity obligation has not been contested in writing by the applicable indemnitors and is in fact indemnified within 365 days of demand by Parent or any Subsidiary therefor and (B) with respect to liability or casualty events to the extent covered by insurance and actually paid or reimbursed, or, so long as Parent has made a determination that there exists reasonable evidence that such amount will in fact be paid or reimbursed by the insurer and only to the extent that such payment or reimbursement (or coverage therefor) has not been denied by the applicable carrier in writing and is in fact paid or reimbursed within 365 days of the date of the incurrence of such expense, charge or loss;
(x) non-recurring cash charges incurred during such period in respect of restructurings, retention, recruiting, relocation, signing and completion bonuses, business process
optimizations, project start-up costs, headcount reductions or other similar actions, including severance charges in respect of employee terminations and related employee replacement costs, in an amount not to exceed, when combined with the aggregate amount to be added to Consolidated EBITDA pursuant to clause (a)(xi) below for such period, 10% of Consolidated EBITDA (calculated without giving effect to this clause (a)(x) or such clause (a)(xi)) for such period;
(xi) (A) restructuring, integration, transition, consolidation and closing costs for facilities, or similar charges incurred during such period in connection with any Specified Transaction, and (B) the amount of cost savings and operating expense reductions, other operating improvements and synergies projected by Parent in good faith to be realized in connection with any Specified Transaction or the implementation of an operational initiative or operational change (calculated on a Pro Forma Basis as though such cost savings, operating expense reductions, other operating improvements and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions, other operating improvements and synergies were realized during the entirety of such period), net of the amount of actual benefits realized during such period from such actions; provided that a duly completed certificate signed by a Financial Officer of Parent shall be delivered to the Agent together with the Compliance Certificate required to be delivered pursuant to Section 5.04(c), certifying that such cost savings, operating expense reductions, other operating improvements and synergies are factually supportable and reasonably anticipated to be realized in the good faith judgment of Parent, within 18 months after the consummation of the applicable Specified Transaction or the implementation of an initiative, which is expected to result in such cost savings, expense reductions, other operating improvements or synergies; in an amount not to exceed, when combined with the aggregate amount to be added to Consolidated EBITDA pursuant to clause (a)(x) above for such period, 10% of Consolidated EBITDA (calculated without giving effect to this clause (a)(xi) or such clause (a)(x)) for such period;
(xii) [intentionally omitted];
(xiii) any expense, loss or charge during such period resulting from the resolution (by way of judgment, settlement or otherwise) of (A) any litigation to which Parent or a Subsidiary is a party or governmental investigation of which Parent or a Subsidiary is the subject, in either case, as of the Closing Date and (B) any product liability claims arising after the Closing Date;
(xiv) all losses during such period resulting from the sale or disposition of any assets of, in each case, Parent or any Subsidiary outside the ordinary course of business;
(xv) all losses during such period resulting from the discontinuation of any operations of Parent or any Subsidiary to the extent permitted or required under Regulation S-X;
(xvi) earn-out and contingent consideration obligations (including to the extent accounted for as bonuses or otherwise) and adjustments thereof during such period;
(xvii) the amount of any expense or reduction of Consolidated Net Income consisting of Subsidiary income that is attributable to minority interests or non-Controlling interests held by third parties in any Subsidiary during such period; and minus
(b) without duplication and to the extent not deducted in determining such Consolidated Net Income, the sum of:
(i) all cash payments made during such period on account of reserves, restructuring charges (other than restructuring charges in amounts specified in clauses (a)(x) and (a)(xi) above) and other non-cash charges added to Consolidated Net Income pursuant to clause (a)(vi) above in a previous period;
(ii) any extraordinary gains for such period;
(iii) all non-cash items of income for such period, including with respect to unrealized gains on foreign currency translation;
(iv) all gains during such period resulting from the sale or disposition of any assets of, in each case, Parent or any Subsidiary outside the ordinary course of business;
(v) all gains during such period resulting from the discontinuation of any operations of Parent or any Subsidiary to the extent permitted or required under Regulation S-X; and
(vi) any gains on extinguishment of debt during such period; and plus
(c) without duplication, the sum of:
(i) all cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing Consolidated EBITDA or Consolidated Net Income in any prior period to the extent non-cash gains relating to such income were deducted in the calculation of Consolidated EBITDA pursuant to clause (b) above for any previous period and not subsequently added-back; and
(ii) to the extent not representing Consolidated EBITDA or Consolidated Net Income in any prior period the proceeds of business interruption insurance (to the extent constituting compensation for lost earnings) actually paid or reimbursed, or, so long as Parent has made a determination that there exists reasonable evidence that such amount will in fact be paid or reimbursed by the insurer and only to the extent that such payment or reimbursement (or coverage therefor) has not been denied by the applicable carrier in writing and is in fact paid or reimbursed within 365 days of the date of the claim therefor.
For the avoidance of doubt, to the extent included in Consolidated Net Income, any impact of purchase accounting adjustments (fair value accounting) shall be excluded in determining Consolidated EBITDA.
“Consolidated Net Income” shall mean, for any period, the net income or loss of Parent and Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Subsidiary to the extent and for so long that the declaration or payment of dividends or similar distributions by such Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Subsidiary; provided, further, that any net income of a Subsidiary shall be included in determining Consolidated Net Income to the extent cash in an amount equal to such income has actually been received by Parent in such period, (b) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with Parent or any Subsidiary or the date that such Person’s assets are acquired by Parent or any Subsidiary (except to the extent required for any calculation of Consolidated EBITDA on a Pro Forma Basis), (c) the income of any Person in which any other Person (other than Parent or a Subsidiary or any director or local foreign national holding qualifying shares in accordance with Applicable Law) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Parent or a Wholly Owned Subsidiary by such Person during such period and (d) the purchase accounting effects of adjustments in component amounts required or permitted by GAAP (including in the inventory, property and equipment, software, goodwill, intangible assets, in-process research and development, deferred revenue and debt line items thereof) and related authoritative pronouncements (including the effects of such adjustments pushed down to Parent and its Subsidiaries), as a result of the Transactions or any Specified Transaction consummated prior to or after the Closing Date, or the amortization or write-off of any amounts thereof.
“Consolidated Total Assets” shall mean, at any date of determination, the net book value of all assets of Parent and Subsidiaries determined on a consolidated basis in accordance with GAAP on such date, as shown on the most recent consolidated balance sheet of Parent delivered pursuant to Section 5.04(a) or 5.04(b), as the case may be (it being understood that the calculation of Consolidated Total Assets shall be determined after giving pro forma effect to any acquisitions or dispositions of assets since the date of such balance sheet and on or prior to such date of determination).
“Contra Claim” shall have the meaning assigned to such term in clause (k) of the definition of “Eligible Receivables”.
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.
“Copyrights” shall have the meaning assigned to such term in the definition of “Intellectual Property”.
“Covenant Compliance Period” shall mean any period (a) commencing on the date on which Excess Availability is less than the greater of, for 10 consecutive Business Days, (i) 15% of the Line Cap and (ii) $3,000,000 and (b) ending on the first date thereafter on which Excess
Availability has been equal to or in excess of, for 30 consecutive days, the greater of (i) 15% of the Line Cap, and (ii) $3,000,000.
“Credit Event” shall have the meaning assigned to such term in Section 4.01.
“Credit Facilities” shall mean the revolving credit, swingline and letter of credit facilities provided for by this Agreement.
“Cure Amount” shall have the meaning assigned to such term in Section 6.11(c).
“Cure Right” shall have the meaning assigned to such term in Section 6.11(c).
“Cure Standstill Period” shall have the meaning assigned to such term in Section 6.11(c).
“Customer” shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with any Borrower, pursuant to which such Borrower is to deliver any personal property or perform any services.
“CWA” shall mean the Clean Water Act (33 U.S.C. §§ 1251 et seq.).
“Daily Simple SOFR” shall mean, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Agent in accordance with the conventions for this rate recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Agent decides that any such convention is not administratively feasible for the Agent, then the Agent may establish another convention in its reasonable discretion.
“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 statute, law, ordinance, rule or regulation of the United States of America, any state thereof or the District of Columbia, or other applicable jurisdictions from time to time in effect.
“Default” shall mean any event or condition which upon notice, lapse of time or both would constitute an Event of Default.
“Default Rate” shall mean an interest rate equal to, (a) with respect to any overdue principal and interest, the applicable interest rate plus 2.00% per annum and (b) with respect to any overdue fees, the interest rate applicable to Base Rate Loans plus 2.00% per annum, in each case, to the fullest extent permitted by Applicable Laws.
“Defaulting Lender” shall mean any Revolving Credit Lender (a) that has defaulted in its obligation to make a Revolving Loan or to fund its participation in a Letter of Credit or Swingline Loan required to be made or funded by it hereunder, within two Business Days of the
date on which it shall have been required to fund the same, unless the subject of a good faith dispute between Borrowers and such Revolving Credit Lender related hereto, (b) that has notified Agent, any Issuing Bank, the Swingline Lender or any other Lender, or a Loan Party in writing that it does not intend to satisfy any obligation referred to in clause (a) above, or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under agreements in which it commits to extend credit generally unless such writing or public statement relates to such Lender’s obligation to fund a 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) that has failed, within three Business Days after written request by Agent or the Administrative Loan Party, to confirm in writing to Agent and the Administrative Loan Party that it will comply with its prospective funding obligations hereunder (provided that such Revolving Credit Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Agent and the Administrative Loan Party) or (d) has, or has a direct or indirect parent company that has, after the Closing Date (or prior to the Closing Date if any such circumstance is continuing on the Closing Date), (i) become insolvent, (ii) become the subject of a proceeding under any Debtor Relief Law, (iii) 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 (iv) has, or has a direct or indirect parent company that has, become the subject of a Bail-In Action; provided that a Revolving Credit Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Revolving Credit 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 Revolving Credit 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 Revolving Credit Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Revolving Credit Lender. Any determination by Agent that a Revolving Credit Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error.
“Designated Jurisdiction” shall mean, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Russia, Sudan, Syria and the Crimea, Donetsk and Luhansk regions of Ukraine).
“Designated Subsidiary” shall have the meaning assigned to such term in Section 5.12(d).
“Dilution” shall mean, as of any date of determination, a percentage, based upon the experience of the immediately prior twelve (12) months, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits or other dilutive items with respect to Borrowers’ Eligible Accounts during such period, by (b) Borrowers’ billings with respect to Eligible Accounts during such period.
“Dilution Reserve” shall mean, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Receivables by the extent to which Dilution is in excess of 5%.
“Disqualified Institution” shall mean (a) any Person identified by the Administrative Loan Party to Agent in writing on or before the Closing Date, (b) any Person that is a named Affiliate of a Person identified pursuant to the preceding clause (a) that is identified by the Administrative Loan Party to Agent in writing from time to time after the Closing Date, (c), any Person that is reasonably identifiable as an Affiliate of a Person identified pursuant to the preceding clause (a) or (b) solely on the basis of its name, which such Affiliates of such Persons may (but need not be) be identified by the Administrative Loan Party to Agent in writing from time to time after the Closing Date, and (d) any Person identified by the Administrative Loan Party to Agent in writing from time to time after the Closing Date as a commercial competitor of any Loan Party, other than any Persons primarily engaged as principals in private equity or venture capital or any affiliated debt fund thereof (other than a natural person) that is primarily engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course; provided that any supplement to such list of Disqualified Institutions will become effective two Business Days after delivery of such designation to Agent and in no event shall a supplement apply retroactively to disqualify (i) any Lender or participant as of the date of such supplement or (ii) any assignee party to an Assignment or Assumption that was executed prior to the date of such supplement. Notwithstanding the foregoing, each Loan Party and each Subsidiary and the Lenders acknowledge and agree that Agent shall not have any responsibility or obligation to determine whether any Lender or potential Lender or participant or potential participant is a Disqualified Institution and Agent shall have no liability in connection with maintaining, updating, monitoring or enforcing the list of Disqualified Institutions or with respect to any assignment or participation made or purported to be made to a Disqualified Institution. Loan Parties hereby expressly authorize Agent to post via the Platform the list of Disqualified Institutions (as updated from time to time) to all Lenders and to provide such list to individual Lenders upon request therefor.
“Disqualified Stock” shall mean any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable (other than for Equity Interests that would not constitute Disqualified Stock), 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 prior to 91 days after the Revolving Credit Maturity Date, or (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interest referred to in clause (a) above, in each case at any time prior to 91 days after the Revolving Credit Maturity Date.
“Distribution Conditions” shall mean, as to any relevant action contemplated in this Agreement, that:
(a) there is no Event of Default existing and continuing or would immediately result from such action;
(b) Excess Availability on a Pro Forma Basis immediately after giving effect to such action and Thirty-Day Excess Availability on a Pro Forma Basis ending on the date of such action, in each case, is at least the greater of (i) 17.5% of the Line Cap and (ii) $4,000,000; and
(c) if Excess Availability on a Pro Forma Basis immediately after giving effect to such action and Thirty-Day Excess Availability on a Pro Forma Basis ending on the date of such action is less than 20.0% of the Line Cap, the Fixed Charge Coverage Ratio would be at least 1.00:1.00 on a Pro Forma Basis.
“Dollars” or “$” shall mean lawful money of the United States of America.
“Domestic In-Transit Inventory” shall have the meaning assigned to such term in the definition of “Eligible Inventory”.
“Domestic In-Transit Inventory Sublimit” shall mean an amount equal to $5,000,000.
“Domestic Subsidiary” shall mean any Subsidiary incorporated or organized under the laws of the United States of America, any state thereof or the District of Columbia.
“Dry Sand Inventory” shall mean any above-ground sand Inventory which has been dried and screened to final size and no longer constitutes Wet Sand Inventory.
“EEA Financial Institution” shall mean (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” shall mean any member state of the European Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority” shall mean 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.
“Eligible Assignee” shall mean (a) a Revolving Credit Lender, (b) an Affiliate of a Revolving Credit Lender, (c) a Related Fund of a Revolving Credit Lender and (d) any other Person approved by Agent, the Swingline Lender, each Issuing Bank and the Administrative Loan Party in accordance with (and to the extent required by) Section 9.04(b); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include (i) any natural Person, (ii) Borrowers or any of Borrowers’ Affiliates or (iii) so long as (A) no Event of Default under Section 7.01(b) or 7.01(c) has occurred and is continuing for a period of five Business Days, (B) no Event of Default under Section 7.01(g) or 7.01(h) has occurred and is continuing or (C)
the Commitments have not been terminated and the Loans have not become due and payable pursuant to Section 7.01, a Disqualified Institution.
“Eligible Canadian Receivables” shall have the meaning assigned to such term in clause (g) of the definition of “Eligible Receivables”.
“Eligible Inventory” shall mean, as to each Borrower, Inventory of such Borrower consisting of above-ground sand which is Wet Sand Inventory or Dry Sand Inventory that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below. Eligible Inventory shall not include:
(a)any Inventory other than Wet Sand Inventory or Dry Sand Inventory;
(b)spare parts for Equipment (it being understood that parts held for sale in their current condition will not be deemed spare parts for purposes of this clause (b));
(c)packaging and shipping materials;
(d)supplies used or consumed in such Borrower’s business;
(e)Inventory at premises other than those owned, leased or controlled by any Loan Party, except for (i) Inventory in transit between locations of the Loan Parties and Subsidiaries (“Domestic In-Transit Inventory”), (ii) Inventory shipped F.O.B. Customer and for which title has not yet transferred, (iii) and Inventory at, or in transit to, a third-party terminal for purposes of sales, so long as such Inventory is transported and stored on Equipment owned, leased or controlled by a Loan Party or Subsidiary;
(f)Inventory subject to a Lien in favor of any Person other than Agent and any other liens permitted under this Agreement that are subject to an intercreditor agreement in form and substance satisfactory to Agent between the holder of such Lien and Agent;
(g)bill and hold goods;
(h)obsolete or slow-moving Inventory (with inventory that has not been sold after a period of more than twelve (12) months being deemed to be obsolete or slow moving for this purpose);
(i)Inventory that is not subject to the first priority, valid and perfected Lien of Agent;
(j)returned Inventory that is not saleable and held for sale in the ordinary course of business,
(k)damaged and/or defective Inventory;
(l)Inventory purchased or sold on consignment;
(m)Inventory located outside the United States of America;
(n)Inventory that does not meet all standards imposed by any Governmental Authority, has been acquired from a Person subject to any Sanction or on any specially designated nationals list maintained by OFAC, or constitutes hazardous materials under any Environmental Law; or
(o)Inventory otherwise deemed ineligible by Agent in its Permitted Discretion based on circumstances or criteria not set forth above based on either: (i) an event, condition, fact or other circumstance arising after the date hereof, or (ii) an event, condition, fact or other circumstance existing on the date hereof to the extent Agent has no written notice thereof prior to the date hereof, in either case under clause (i) or (ii) which adversely affects in any material respect or could reasonably be expected to adversely affect in any material respect the Value of the Inventory.
Notwithstanding anything to the contrary contained herein, the maximum amount of Eligible Inventory consisting Wet Sand Inventory which may be considered Eligible Inventory shall not exceed, as of any given date, $8,000,000.
Any Inventory which is not Eligible Inventory shall nevertheless be part of the Collateral. Unless an Event of Default exists and is continuing (in which case no notice shall be required and any changes shall take effect immediately), Agent shall provide the Administrative Loan Party with prompt notice of any change new criteria established pursuant to clause (o) above, which changed or new criteria shall become effective no earlier than the fifth Business Day following delivery of such notice.
“Eligible Receivables” shall mean and includes each Receivable of a Borrower arising in the ordinary course of business that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below. No Receivable shall be an Eligible Receivable if:
(a)it does not arise from the actual and bona fide rental, lease or sale and delivery of goods or rendition of services by such Borrower in the ordinary course of business of such Borrower, which transactions are completed in accordance in all material respects with the terms and provisions contained in any agreement binding on such Borrower or the other party or parties thereto;
(b)it is due or unpaid more than the earlier of (i) 90 days after the original due date and (ii) 120 days after the original invoice date;
(c)it is owed by a Customer who has Receivables unpaid more than the earlier of (i) 90 days after the original due date and (ii) 120 days after the original invoice date, which unpaid Receivables constitute more than 25% of the total Receivables of such Customer;
(d)it is not subject to the first priority, valid and perfected Lien of Agent;
(e)any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached in any material respect;
(f)the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, administrator or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any Insolvency Law, (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such Insolvency Law or (viii) take any action for the purpose of effecting any of the foregoing;
(g)the sale is to a Customer located or incorporated (or other analogous term) outside the United States (collectively, “Foreign Customers”), except for a Foreign Customer that is acceptable in all respects to Agent in its Permitted Discretion which is located or incorporated in Canada or any province thereof (“Eligible Canadian Receivables”); provided that, the maximum aggregate amount of Eligible Canadian Receivables which may be considered eligible under this clause (g) shall not exceed 25% of all otherwise Eligible Receivables (but the portion of the Receivables not in excess of such percentage may be deemed Eligible Receivables);
(h)the sale to the Customer is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase, return or contingent or conditional basis or is evidenced by chattel paper;
(i)Receivables with respect to which the Customer is either (i) the United States or any department, agency, or instrumentality of the United States, or (ii) any state of the United States or any other Governmental Authority;
(j)the goods giving rise to such Receivable have not been made available to the Customer in accordance with the terms of any applicable rental or lease agreement, or shipped and delivered to and accepted by the Customer or the services giving rise to such Receivable have not been performed by such Borrower and accepted by the Customer (such as advanced billings) or the Receivable otherwise does not represent a final sale;
(k)the Receivable is subject to any offset, deduction, defense, dispute, or counterclaim, the Customer is also a creditor or supplier of such Borrower or the Receivable is contingent in any respect or for any reason (each such offset, deduction, defense, dispute, counterclaim or contingency, a “Contra Claim”); provided, that, such Receivables shall only be ineligible pursuant to this clause (k) to the extent of the aggregate amount of such Contra Claims;
(l)such Borrower has made any agreement with any Customer for any deduction therefrom, but only to the extent of such deductions, except for discounts or allowances made in the ordinary course of business for prompt payment, all of which discounts
or allowances are reflected in the calculation of the face value of each respective invoice related thereto;
(m)Receivables with respect to which the Customer is subject to a proceeding commenced by or against it under any provision of any Debtor Relief Law, is not Solvent, has gone out of business, or as to which the Borrower or any Loan Party has received notice of an imminent proceeding commenced by or against it under any provision of any Debtor Relief Law, or a material impairment of the financial condition of such Customer;
(n)any return, rejection or repossession of any asset has occurred the sale of which gave rise to such Receivable or such Receivable relates to a Customer whose obligation to pay is in any respect, conditional or subject to any such right of return, rejection, repossession or similar rights;
(o)such Receivable is not payable to a Borrower;
(p)in the case of (i) any single Customer and its Affiliates whose corporate family rating is not Investment-Grade, such Receivables constitute more than 25% of all otherwise Eligible Receivables, (ii) any single Customer and its Affiliates whose corporate family rating is Investment-Grade, such Receivables constitute more than 40% of all otherwise Eligible Receivables, (iii) the top two Customers and their Affiliates, such Receivables constitute, in the aggregate, more than 50% of all otherwise Eligible Receivables, and (iv) the top three Customers and their Affiliates, such Receivables constitute, in the aggregate, more than 75% of all otherwise Eligible Receivables; provided that in each case of clauses (i) through (iv) above, the portion of the Receivables not in excess of such percentage may be deemed Eligible Receivables;
(q)such Receivable consists of progress billings (such that the obligation of the Customer with respect to such Receivable is conditioned upon such Borrower’s satisfactory completion of any further performance under the agreement giving rise thereto), bill and hold invoices or retainage invoices, except as to bill and hold invoices, if Agent shall have received an agreement in writing from the Customer, in form and substance reasonably satisfactory to Agent, confirming the unconditional obligation of the Customer to take the goods related thereto and pay such invoice;
(r)the Customer or any officer or employee of the Customer with respect to such Receivable is an officer, employee, agent or other Affiliate of any Borrower or any other Subsidiary of any Loan Party;
(s)such Receivable is subject to any factoring or similar agreement;
(t)the underlying sale and other documentation governing such Receivable do not provide that such Receivable must be paid by the Customer in Dollars;
(u)the underlying sale and other documentation governing such Receivable are not governed by the laws of the United States or any state thereof;
(v)any surety or performance bond supports the performance of the applicable Borrower’s obligations relating to the transactions giving rise to such Receivables;
(w)the Customer with respect to such Receivable is (i) a Sanctioned Person or a Sanctioned Entity, or (ii) located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit a Borrower to seek judicial enforcement in such jurisdiction of payment of such Receivable and such report cannot be filed without material expense or prejudice to such Borrower’s ability to seek such enforcement, unless such Borrower has filed such report or qualified to do business in such jurisdiction;
(x)such Receivable qualifies as a Subleased Equipment Receivable, unless Agent has received a written agreement or other acknowledgement, in form and substance satisfactory to Agent in its Permitted Discretion, from the applicable Subleased Equipment Lessor under the applicable Subleased Equipment Lease; or
(y)such Receivable is otherwise deemed ineligible by Agent in its Permitted Discretion based on circumstances or criteria not set forth above based on either: (i) an event, condition, fact or other circumstance arising after the date hereof, or (ii) an event, condition, fact or other circumstance existing on the date hereof to the extent Agent has no written notice thereof prior to the date hereof, in either case under clause (i) or (ii) which adversely affects in any material respect or could reasonably be expected to adversely affect in any material respect the value of the Receivable.
Any Receivables which are not Eligible Receivables shall nevertheless be part of the Collateral. Unless an Event of Default exists and is continuing (in which case no notice shall be required and any changes shall take effect immediately), Agent shall provide the Administrative Loan Party with prompt notice of any new criteria established pursuant to clause (y) above, which new criteria shall become effective no earlier than the fifth Business Day following delivery of such notice.
“Eligible Unbilled Receivables” shall mean any Receivable of a Loan Party which would otherwise constitute an Eligible Receivable other than that an invoice or bill has not been delivered with respect thereto for a period of no more than 30 days after the last day of the calendar month in which such Loan Party has shipped the goods giving rise to such Receivable or performed the services giving rise to such Receivable; provided that in no event shall Eligible Unbilled Receivables include any Receivables to the extent consisting of award fees, provisional payments or retainage payments.
“Eligible Unbilled Receivables Sublimit” shall mean, at any time, an amount equal to 25% of the Borrowing Base.
“Environmental Laws” shall mean Applicable Laws (including programs, permits and guidance promulgated by regulators) relating to public health (other than occupational safety and health regulated by OSHA) or the protection or pollution of the environment, including CERCLA, RCRA and CWA and all other Federal, state, local and foreign laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, directives and
orders (including consent orders), in each case, relating to protection of the environment, natural resources, human health and safety, or the presence, Release of or exposure to, Hazardous Materials, or the generation, manufacturing, processing, distribution, use, treatment, storage, transport, recycling or handling of, or the arrangement for such activities with respect to Hazardous Materials.
“Environmental Liability” shall mean all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of, or exposure to any Hazardous Materials, (c) the Release of any Hazardous Materials or (d) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Environmental Notice” shall mean a notice (whether written or oral) from any Governmental Authority or other Person of any possible noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Environmental Release, environmental pollution or hazardous materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.
“Environmental Release” shall mean a release as defined in CERCLA or under any other Environmental Law.
“Equipment” shall mean and include, as to each Loan Party, all of such Loan Party’s equipment (as defined in Article 9 of the UCC as in effect in the State of New York) and all supporting obligations in respect thereof.
“Equipment Appraisal” shall mean a Qualified Appraisal of Loan Parties’ Equipment.
“Equity Cure” shall have the meaning assigned to such term in Section 6.11(c)(ii)(B).
“Equity Cure Testing Period” shall have the meaning assigned to such term in Section 6.11(c).
“Equity Interests” shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person, and any option, warrant or other right (other than Indebtedness that is convertible into, or exchangeable for, any such equity interest) entitling the holder thereof to purchase or otherwise acquire any such equity interest.
“Equity Issuance” shall mean any issuance or sale by Parent or any of Subsidiaries of any Equity Interests of Parent or any such Subsidiary, as applicable, except in each case (a) any issuance or sale to Parent or any Subsidiary, (b) any issuance of directors’ qualifying shares and, in the case of a Foreign Subsidiary, nominal amounts of shares required by Applicable Law to be
issued to local nationals and (c) sales or issuances of common stock of Parent (or options, warrants or rights to purchase shares of common stock of Parent) to officers, directors or employees of Parent or any Subsidiary under any employee stock option or stock purchase plan or other employee benefit plan in existence from time to time.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.
“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with Parent, is treated as a single employer under Section 414(b) or 414(c) of the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) the failure to meet the minimum funding standard of Section 412 of the Code with respect to any Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Plan or the failure to make any required contribution to a Multiemployer Plan, (c) the filing pursuant to Section 412(c) of the Code or Section 302(b) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by Parent, any of Subsidiaries or any of their ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of Parent, any of Subsidiaries or any of their ERISA Affiliates from any Plan or Multiemployer Plan, (e) the receipt by Parent, any of Subsidiaries or any of their ERISA Affiliates from the PBGC of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f) the imposition of a lien pursuant to Section 430(k) of the Code or ERISA or a violation of Section 436 of the Code, (g) the receipt by Parent, any of Subsidiaries or any of their ERISA Affiliates of any notice (not issued in error), concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent (within the meaning of Section 4245 of ERISA) or in reorganization (within the meaning of Section 4241 of ERISA), (h) the occurrence of a non-exempt prohibited transaction within the meaning of Section 4975 of the Code that would subject any Parent or any of Subsidiaries to a tax on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of the Code or (i) the imposition of liability on Parent, any of Subsidiaries or any of their ERISA Affiliates pursuant to Sections 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA.
“Erroneous Payment” shall have the meaning assigned to such term in Section 8.10(a).
“Erroneous Payment Deficiency Assignment” shall have the meaning assigned to such term in Section 8.10(d)(i).
“Erroneous Payment Impacted Class” shall have the meaning assigned to such term in Section 8.10(d)(i).
“Erroneous Payment Return Deficiency” shall have the meaning assigned to such term in Section 8.10(d)(i).
“Erroneous Payment Subrogation Rights” shall have the meaning assigned to such term in Section 8.10(e).
“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Events of Default” shall have the meaning assigned to such term in Section 7.01.
“Excess Availability” shall mean, as of any date of determination, an amount equal to (a) the Line Cap as of such date minus (b) the Aggregate Revolving Credit Exposure as of such date.
“Exchange Act” shall mean the Securities Exchange Act of 1934.
“Excluded Domestic Holdco” shall mean a Domestic Subsidiary, substantially all of the assets of which consist of Equity Interests of one or more Excluded Foreign Subsidiaries, which has not guaranteed or pledged any of its assets to secure, or with respect to which there shall not have been pledged two-thirds or more of the voting Equity Interests to secure, any Indebtedness (other than the Loans) of a Loan Party that is a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“Excluded Domestic Subsidiary” shall mean any Domestic Subsidiary that is (a) a direct or indirect Subsidiary of an Excluded Foreign Subsidiary or (b) an Excluded Domestic Holdco.
“Excluded Foreign Subsidiary” shall mean a Foreign Subsidiary which is (a) a “controlled foreign corporation” (as defined in the Code) that has not guaranteed or pledged any of its assets to secure, or with respect to which there shall not have been pledged two-thirds or more of its voting Equity Interests to secure, any Indebtedness (other than the Loans) of a Loan Party that is a “United States person” within the meaning of Section 7701(a)(30) of the Code, (b) a direct or indirect Foreign Subsidiary owned by a Foreign Subsidiary described in clause (a), or (c) a Foreign Subsidiary that has no material assets other than Equity Interests of one or more Subsidiaries described in clause (a).
“Excluded Subsidiary” shall mean (a) any Subsidiary (i) that is prohibited or restricted by Applicable Law, rule or regulation or by contract existing on the Closing Date (or, in the case of any newly acquired Subsidiary, in existence at the time of acquisition but not entered into in contemplation thereof) from guaranteeing the Obligations or (ii) if guaranteeing the Obligations would require governmental (including regulatory) consent, approval, license or authorization (unless such consent, approval, license or authorization has been obtained), (b) any Excluded Domestic Subsidiary or Excluded Foreign Subsidiary to the extent a guaranty of the Obligations by such Excluded Domestic Subsidiary or Excluded Foreign Subsidiary could reasonably be
expected to result in material adverse tax consequences to Parent under Section 956 of the Code or any similar Law in any applicable jurisdiction, as reasonably determined by Parent, and (c) any other Subsidiary with respect to which, in the reasonable judgment of the Agent in consultation with Parent, the burden or cost of providing a Guarantee and complying with the other requirements of Section 5.12(c) shall be excessive in view of the benefits to be obtained by the Lenders therefrom.
“Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, 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 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” shall mean, with respect to Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of Borrowers hereunder, (a) income, franchise or branch profits Taxes imposed on (or measured by) its net income (however denominated), in each case, (i) imposed by the United States of America, or by the jurisdiction (or political subdivision) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) imposed by reason of any present or former connection between the recipient and the jurisdiction imposing the Tax (other than connections arising from the execution, delivery, performance, filing, recording and enforcement of, and the other activities pursuant to or enforced in this Agreement and the other Loan Documents), (b) any United States Federal withholding Tax imposed by FATCA, (c) in the case of a Lender (other than an assignee pursuant to a request by the Administrative Loan Party under Section 2.21(a)), any withholding Tax that is imposed on amounts payable to such Lender under the law in effect at the time such Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from Borrowers with respect to such withholding Tax pursuant to Section 2.20(a), and (d) any Taxes imposed as a result of or attributable to such Lender’s failure to comply with Section 2.20(f), 2.20(g) or 2.20(h).
“Existing Credit Agreement” shall mean that certain ABL Credit Agreement, dated as of December 13, 2019, among Parent, the other Loan Parties party thereto, the financial institutions from time to time party thereto, and Jefferies Finance LLC, as administrative agent, as amended.
“Fair Market Value” shall mean, with respect to any asset or group of assets on any date of determination, the value of the consideration obtainable in a sale of such asset at such date of determination assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time taking into account the nature and characteristics of such asset, as reasonably determined by the Administrative Loan Party in good faith.
“FATCA” shall mean 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) and any current or future regulations thereunder or official governmental interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any laws, rules or regulations implementing any intergovernmental agreements entered into with respect to the foregoing.
“Federal Funds Rate” shall mean, 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 arranged by federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day, provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, or (b) if no such rate is published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Agent on such day on such transactions; provided, that in no event shall such rate be less than zero.
“Fees” shall mean the Commitment Fee, Agent Fees, the L/C Participation Fee, and the Issuing Bank Fees.
“Financial Officer” of any Person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such Person.
“Fixed Charge Coverage Ratio” shall mean, for any Test Period, the ratio of (a) Consolidated EBITDA for such Test Period minus, without duplication, (i) all taxes based on income, profits or capital gains, including federal, state, foreign, local, franchise and similar taxes and foreign withholding taxes, including penalties and interest related to such taxes or arising from any tax examinations, in each case paid or required to be paid in cash during such Test Period, plus all cash tax refunds to the extent not included in Consolidated EBITDA, minus (ii) the aggregate amount of Unfinanced Capital Expenditures made in cash during such Test Period, and (iii) all Restricted Payments paid in cash pursuant to Sections 6.06(a)(ii), 6.06(a)(iv), 6.06(a)(v), 6.06(a)(vi) and 6.06(a)(vii) during such Test Period, to (b) the sum of (i) cash interest expense determined in accordance with GAAP and (ii) the sum of (A) regularly scheduled amortization payments on Indebtedness of the types described in clauses (a), (b) and (d) of the definition of “Indebtedness” (excluding, for the avoidance of doubt, any regularly scheduled amortization payments in respect of the Master Lease Facility Documents (as defined in the Existing Credit Agreement)), plus, without duplication, (B) the Last Mile Deemed Amounts.
“Flood Laws” shall mean all Applicable Laws relating to policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and other Applicable Laws related thereto.
“Floor” shall mean a rate of interest equal to 0%.
“FLSA” shall mean the Fair Labor Standards Act of 1938.
“Foreign Customer” shall have the meaning assigned to such term in clause (g) of the definition of “Eligible Receivables”.
“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.
“FRB” shall mean the Board of Governors of the Federal Reserve System of the United States.
“Fronting Exposure” shall mean, at any time there is a Defaulting Lender, with respect to (a) any Issuing Bank, such Defaulting Lender’s Pro Rata Percentage of the aggregate L/C Exposure at such time, other than L/C Exposure as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms of Section 2.23(j) or 2.23(k), and (b) with respect to the Swingline Lender, such Defaulting Lender’s Pro Rata Percentage of the aggregate Swingline Exposure at such time other than Swingline Exposure as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with the terms of Section 2.22(d) or 2.22(e).
“GAAP” shall mean United States generally accepted accounting principles as in effect from time to time and applied on a basis consistent with the audited financial statements of Parent for its fiscal year ended December 31, 2023, delivered pursuant to Section 4.02(h) (but otherwise subject to Section 1.02).
“Governmental Authority” shall mean any Federal, state, local, foreign or supranational court or governmental agency, authority, instrumentality or regulatory body (including any group or body charged with setting financial accounting or regulatory capital rules or standards (including the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing)).
“Guarantee” of or by any Person shall mean any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligation, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the
payment of such Indebtedness or other obligation or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation; provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.
“Guarantee and Collateral Agreement” shall mean the Guarantee and Collateral Agreement among Loan Parties and Agent for the benefit of the Secured Parties.
“Guarantor” or “Guarantors” shall have the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Persons as well as (a) other Person that becomes a Subsidiary Guarantor of any of the Obligations after the Closing Date pursuant to the Guarantee and Collateral Agreement or otherwise and (b) each Borrower in its capacity as a guarantor of the Bank Product Obligations of any Loan Party.
“Hazardous Materials” shall mean any petroleum products or byproducts and all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting substances and any chemical, material, substance or waste that is prohibited, limited, defined or regulated by or pursuant to any Environmental Law.
“Hedging Agreement” shall mean (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, currency swap transactions, cross-currency rate swap transactions, currency options, cap transactions, floor transactions, collar transactions, spot contracts, futures contracts or other liabilities for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract or any other similar transactions or any combination of any of the foregoing (including any options or warrants to enter into any of the foregoing), whether or not any such transaction is governed by, or otherwise subject to, any master agreement or any netting agreement, and (b) any and all transactions or arrangements of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement (or similar documentation) published from time to time by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such agreement or documentation, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement; provided that “Hedging Agreement” shall not include any fixed price or similar commodity contract entered into in the ordinary course of business by any Loan Party or Subsidiary in connection with the provision of commodities used in such Loan Party’s or Subsidiary’s business.
“Hedging Obligations” shall mean obligations under or with respect to Hedging Agreements.
“Hedging Termination Value” shall mean, in respect of any one or more Hedging Agreements, after taking into account the effect of any netting agreements relating to such Hedging Agreements (to the extent, and only to the extent, such netting agreements are legally enforceable in any bankruptcy, insolvency, receivership or other similar proceeding against the applicable counterparty obligor thereunder), (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in preceding clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements (which may include an Agent, a Lender or any Affiliate of an Agent or a Lender).
“Immaterial Subsidiary” shall mean (subject to Section 5.12), as of any date of determination, any Subsidiary that is not a Borrower: (i) whose total assets (on a consolidated basis including its Subsidiaries) as of the last day of the most recently ended period for which financial statements have been delivered pursuant to Section 5.04(a) or 5.04(b) did not exceed 2.5% of Consolidated Total Assets as of such date, or (ii) whose gross revenues (on a consolidated basis including its Subsidiaries) for such period did not exceed 2.5% of the consolidated gross revenues of Parent and Subsidiaries for such period.
“Immaterial Subsidiary Thresholds” shall have the meaning assigned to such term in Section 5.12(d).
“Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments representing extensions of credit, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person (excluding trade accounts payable and other accrued obligations, in each case incurred in the ordinary course of business), (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business) due more than six months from the date of incurrence or on a payment plan, (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, but limited to the lower of (i) the Fair Market Value of such property and (ii) the amount of the Indebtedness so secured, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all Synthetic Lease Obligations of such Person, (i) all Bank Product Obligations under Hedging Agreements valued at the Hedging Termination Value thereof, (j) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Disqualified Stock of such Person or any other Person or any warrants, rights or options to acquire such equity interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends if and to the extent that the foregoing would constitute indebtedness or a liability in accordance with GAAP, (k) all obligations of such Person as an account party in respect of letters of credit and
(l) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of 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 do not provide that such Person is liable therefor. Notwithstanding the foregoing, the term “Indebtedness” shall not include, for any Person, (i) in connection with any Specified Transaction, contingent post-closing purchase price adjustments, indemnification payments, earn-outs or other contingent payments until such purchase price adjustments, indemnification payments, earn-outs or other contingent payments become liabilities on the balance sheet of such Person in accordance with GAAP, (ii) obligations of such Person in respect of operating leases, or (iii) Royalty Obligations.
“Indemnified Taxes” shall mean Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation under any Loan Document.
“Indemnitee” shall have the meaning assigned to such term in Section 9.05(b).
“Information” shall have the meaning assigned to such term in Section 9.16.
“Intellectual Property” shall mean any and all intellectual property rights recognized under Applicable Law, whether arising under United States laws or otherwise, including without limitation, the following: (a) patents and applications therefor, including continuations, divisionals, continuations-in-part, renewals, extensions and supplemental protection certificates (collectively, “Patents”), (b) registered and unregistered trademarks, service marks, trade names, service names, trade dress rights and corporate names, together with the goodwill associated with any of the foregoing, and all applications, registrations and renewals thereof (collectively, “Trademarks”), (c) copyrights and registrations (including supplementary copyright registrations) and applications therefor, rights in original works of authorship (including copyrights in website content) and mask work rights (collectively, “Copyrights”), (d) rights in Internet domain names (including registrations therefor), (e) Software, (f) Trade Secrets, (g) moral rights, rights of privacy and rights of publicity, and (h) all rights to sue at law or in equity for any past, present or future infringement, misappropriation or other impairment in any of the foregoing, including the right to receive all proceeds and damages therefrom.
“Intercompany Note” shall mean a promissory note substantially in the form of Exhibit G.
“Interest Period” shall mean, with respect to any Term SOFR Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 3 or 6 months thereafter (or such period shorter than 1 month that is acceptable to Agent in its sole discretion), as the Administrative Loan Party may elect, in each case subject to the availability thereof; provided, however, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) 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 the calendar month at the end of such Interest Period, (c) no Interest Period for any Loan shall extend beyond the Revolving Credit Maturity Date and (d) no tenor that has been removed from this definition pursuant to Section 2.27 shall be available in any Notice of Borrowing, Notice of Conversion/Continuation or any interest rate election. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
“Internally Generated Cash” shall mean, with respect to any Person, funds of such Person and its Subsidiaries not constituting (a) proceeds of the issuance of (or contributions in respect of) Equity Interests of such Person, (b) proceeds of the incurrence of Indebtedness (other than the incurrence of Revolving Credit Loans or extensions of credit under any other revolving credit or similar facility) by such Person or any of its Subsidiaries or (c) proceeds of Asset Sales (or any other disposition of assets) and casualty or other insured damage to any property or asset of such Person.
“Inventory” shall mean and include, as to each Loan Party, all of such Loan Party’s inventory (as defined in Article 9 of the UCC as in effect in the State of New York) and all supporting obligations in respect thereof.
“Inventory Appraisal” shall mean a Qualified Appraisal of Borrowers’ Inventory.
“Inventory Reliance Period” shall mean any time that (a) the Aggregate Revolving Credit Exposure exceeds (b) the Borrowing Base (calculated without giving effect to clause (c) thereof).
“Inventory Sublimit” shall mean, at any time, an amount equal to 50% of the Borrowing Base.
“Investment-Grade” shall mean a rating of (a) “BBB-” or higher as determined by S&P and (b) “Baa3” or higher as determined by Moody’s (it being understood that if S&P ceases to provide a corporate family credit rating with respect to any Person, clause (a) shall no longer apply so long as clause (b) is satisfied with respect to such Person, and if Moody’s ceases to provide a corporate family credit rating with respect to any Person, clause (b) shall no longer apply so long as clause (a) is satisfied with respect to such Person).
“Issuing Bank” shall mean, as the context may require, (a) Agent, (b) any other Lender approved by Agent and the Administrative Loan Party that agrees to act as an Issuing Bank and (c) any other Lender that becomes an Issuing Bank pursuant to Section 2.23(i), with respect to Letters of Credit issued by such Lender. Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates or branches of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate or branch with respect to Letters of Credit issued by such Affiliate or branch.
“Issuing Bank Fees” shall have the meaning assigned to such term in Section 2.05(c).
“Joinder Agreement” shall mean a joinder agreement substantially in the form of Exhibit I.
“L/C Commitment” shall mean the commitment of each Issuing Bank to issue Letters of Credit pursuant to Section 2.23.
“L/C Disbursement” shall mean a payment or disbursement made by any Issuing Bank pursuant to a Letter of Credit.
“L/C Exposure” shall mean, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time and (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed by or on behalf of Borrowers at such time. The L/C Exposure of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage of the aggregate L/C Exposure at such time.
“L/C Participation Fee” shall have the meaning assigned to such term in Section 2.05(c).
“Landlord Reserve” shall mean, as to each location at which a Loan Party has Eligible Inventory and as to which a Collateral Access Agreement has not been received by Agent, a reserve established by Agent in its Permitted Discretion in an amount equal to 3 months’ rent, storage charges, fees or other amounts under the lease or other applicable agreement relative to such location or, if greater and Agent so elects, the number of months’ rent, storage charges, fess or other amounts for which the landlord, bailee, warehouseman or other property owner will have, under Applicable Law, a Lien in such Eligible Inventory to secure the payment of such amounts under the lease or other applicable agreement relative to such location.
“Last Mile Deemed Amounts” shall mean, for the fiscal quarters of the Borrowers set forth below, the corresponding amounts set forth opposite thereof:
| | | | | |
| Applicable Fiscal Quarters | Amount |
| Fiscal quarter of the Borrowers ended September 30, 2023 | $595,000 |
| Fiscal quarter of the Borrowers ended December 31, 2023 | $595,000 |
| Fiscal quarter of the Borrowers ended March 31, 2024 | $595,000 |
| Fiscal quarter of the Borrowers ended June 30, 2024 | $595,000 |
“Last Mile Equipment” shall mean “SmartSystems” last mile equipment (including proppant storage silos, “SmartPath” transloaders, “SmartBelt” conveyors, portable bucket elevators, portable surge bins, rapid deployment trailer systems and other support equipment) utilized to temporarily store, transload or deliver frac sand into pressure pumps or other customer-owned or managed equipment at a wellsite that is, or is intended to be, leased or rented to a Customer and/or with respect to which Borrowers provide services to such Customers.
“LCT Election” shall mean the election by the Administrative Loan Party, on behalf of Loan Parties, to treat a specified acquisition or Permitted Investment as a Limited Condition Transaction.
“LCT Test Date” shall have the meaning assigned to such term in Section 1.07.
“Lead Arranger” shall mean First-Citizens Bank & Trust Company, in its capacity as the sole lead arranger and sole bookrunner for the Credit Facilities.
“Leaseholds” shall mean all the right, title and interest of Loan Parties or any Subsidiary as lessee, sublessee, franchisee or licensee in, to and under leases, subleases, franchises or licenses of land, improvements and/or fixtures.
“Legal Requirements” shall mean, as to any person, any treaty, law (including the common law), statute, ordinance, code, rule, regulation, guidelines, license, permit requirement, judgment, decree, verdict, order, consent order, consent decree, writ, declaration or injunction, policies and procedures, Order or determination of an arbitrator or a court or other Governmental Authority, and the interpretation or administration thereof, 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, in each case whether or not having the force of law.
“Lender Group” shall mean each of the Lenders (including Issuing Bank and the Swing Lender) and Agent, or any one or more of them.
“Lenders” shall mean (a) the financial institutions and other persons party hereto as “Lenders” on the date hereof, and (b) each financial institution or other person that becomes a party hereto pursuant to an Assignment and Acceptance, other than, in each case, any such financial institution or person that has ceased to be a party hereto pursuant to an Assignment and Acceptance. Unless the context clearly indicates otherwise, the term “Lenders” shall include the Swingline Lender.
“Letter of Credit” shall mean any standby or commercial letter of credit issued pursuant to Section 2.23.
“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to
such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“Limited Condition Acquisition Agreement” shall have the meaning assigned to such term in Section 1.07.
“Limited Condition Transaction” shall mean any Permitted Acquisition or permitted investment whose consummation is not conditioned on the availability of, or on obtaining, third party financing and subject to Section 1.07.
“Line Cap” shall mean, as of any date of determination, the lesser of (a) the Total Revolving Credit Commitments, and (b) the Borrowing Base as of such date of determination.
“Loan Documents” shall mean this Agreement, the Letters of Credit, the Security Documents, each Joinder Agreement, the promissory notes, if any, executed and delivered pursuant to Section 2.04(e), and any and all other agreements, instruments and documents, including, without limitation, guaranties, pledges, security agreements, mortgages, deeds of trust, debentures, control agreements, other collateral documents, Subordination Agreements, intercreditor agreements, powers of attorney, consents, and all other writings heretofore, now or hereafter executed and/or delivered by any Loan Party (including any officer or employee of any thereof) to Agent or any Lender in respect of the transactions contemplated by this Agreement, in each case, as such agreements, instruments and documents are amended, restated, modified or supplemented from time to time.
“Loan Parties” shall mean Borrowers and Guarantors.
“Loan Party Intellectual Property” shall have the meaning assigned to such term in Section 3.24.
“Loans” shall mean the Revolving Loans and the Swingline Loans.
“Mandatory Borrowing” shall have the meaning assigned to such term in Section 2.22(e).
“Margin Stock” shall have the meaning assigned to such term in Regulation U.
“Material Adverse Effect” shall mean any (a) material adverse effect on the business, assets, financial condition or results of operations, in each case, of Loan Parties and Subsidiaries, taken as a whole, (b) material impairment on the rights and remedies (taken as a whole) of Agent and the Lenders under the Loan Documents, or (c) material impairment on the ability of Loan Parties (taken as a whole) to perform their payment obligations under the Loan Documents (taken as a whole).
“Material Contract” shall mean any contract, agreement, instrument, permit, lease or license, (other than any license for (i) Intellectual Property embedded in any equipment or fixture or (ii) the use of any commercially available off-the-shelf software), of Loan Parties, the loss of
which, or failure to comply with, could reasonably be expected to result in a Material Adverse Effect.
“Material Indebtedness” shall mean Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Agreements, of any one or more of any Loan Party or any Subsidiary in an aggregate principal amount of $20,000,000 or more. For purposes of determining Material Indebtedness, the “principal amount” in respect of any Bank Product Obligations under any Hedging Agreement of any Company at any time shall be the Hedging Termination Value thereof at such time.
“Maximum Rate” shall have the meaning assigned to such term in Section 9.09.
“Minimum Collateral Amount” shall mean, at any time, with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 102% of the aggregate Fronting Exposures of all Issuing Banks with respect to Letters of Credit issued by such Issuing Banks and outstanding at such time.
“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.
“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA which is contributed to by (or to which there is or may be an obligation to contribute of) Parent, any of Subsidiaries or any of their ERISA Affiliates or with respect to which Parent or any Subsidiary could reasonably be expected to incur liability, whether absolute or contingent.
“Net Cash Proceeds” shall mean:
(a) with respect to any Asset Sale (or other disposition of assets), the cash proceeds (including cash proceeds subsequently received (as and when received) in respect of noncash consideration initially received), net of (i) selling expenses (including reasonable broker’s fees or commissions, investment banking fees, legal fees, transfer and similar taxes and Loan Parties’ good faith estimate of ordinary income or capital gain Taxes paid or payable in connection with such sale), (ii) amounts provided as a reserve, in accordance with GAAP, against any liabilities under any indemnification obligations or purchase price adjustment associated with such Asset Sale or other disposition (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds) and (iii) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for borrowed money or other obligation that is secured by the asset or assets sold in such Asset Sale or other disposition and which is required to be repaid with such cash proceeds (other than the Obligations); and
(b) with respect to any issuance or incurrence of Indebtedness or any Equity Issuance, the cash proceeds thereof, net of all Taxes and customary fees, commissions, costs and other expenses incurred in connection therewith.
“Net Recovery Percentage” shall mean the percentage of the book value of Eligible Inventory that is estimated to be recoverable in an orderly liquidation of such Eligible Inventory,
net of all associated costs and expenses of such liquidation, such percentage to be as determined from time to time by the most recent Inventory Appraisal.
“Non-compliant Equity Cure Testing Period” shall have the meaning assigned to such term in Section 6.11(c).
“Non-Defaulting Lender” shall mean, at any time, each Revolving Credit Lender that is not a Defaulting Lender at such time.
“Notice of Conversion/Continuation” shall mean a request by Administrative Loan Party for conversion or continuation of a Loan as a Term SOFR Loan, in form reasonably satisfactory to Agent.
“Obligations” shall mean all (a) all obligations of Borrowers and the other Loan Parties from time to time arising under or in respect of the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency or similar proceeding, regardless of whether allowed or allowable in any such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by Borrowers and the other Loan Parties from time to time under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of L/C Disbursements, interest thereon and obligations to provide Cash Collateral and (iii) all other monetary obligations, including Fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency or similar proceeding, regardless of whether allowed or allowable in any such proceeding), of Borrowers and the other Loan Parties under this Agreement and the other Loan Documents, (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of Borrowers and the other Loan Parties under or pursuant to this Agreement and the other Loan Documents, in each case, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising, (c) Erroneous Payment Subrogation Rights and (d) without limiting the generality of the foregoing, obligations defined as “Secured Obligations” in the Guarantee and Collateral Agreement and the other applicable Security Documents; provided, that in no circumstances shall Excluded Swap Obligations constitute Obligations.
“OFAC” shall mean the Office of Foreign Assets Control of the U.S. Treasury Department.
“Order” shall mean any judgment, decree, verdict, order, consent order, consent decree, writ, declaration or injunction.
“OSHA” shall mean the Occupational Safety and Hazard Act of 1970.
“Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document, except any such Taxes imposed with respect to an assignment (other than an assignment pursuant to a request by the Administrative Loan Party under Section 2.21(a)).
“Overadvances” shall have the meaning assigned to such term in Section 2.11(b).
“Parent” shall have the meaning assigned to such term in the introductory statement hereto.
“Participant Register” shall have the meaning assigned to such term in Section 9.04(f).
“Patents” shall have the meaning assigned to such term in the definition of “Intellectual Property”.
“PATRIOT Act” shall mean The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56, 115 Stat. 272 (signed into law October 26, 2001)).
“Payment Conditions” shall mean, as to any relevant action contemplated in this Agreement, that:
(a) there is no Event of Default existing and continuing or would immediately result from such action;
(b) Excess Availability on a Pro Forma Basis immediately after giving effect to such action and Thirty-Day Excess Availability on a Pro Forma Basis ending on the date of such action, in each case, is at least the greater of (i) 15% of the Line Cap and (ii) $3,000,000; and
(c) if Excess Availability on a Pro Forma Basis immediately after giving effect to such action and Thirty-Day Excess Availability on a Pro Forma Basis ending on the date of such action is less than the greater of (i) 17.5% of the Line Cap and (ii) $3,000,000, the Fixed Charge Coverage Ratio would be at least 1.00:1.00 on a Pro Forma Basis.
“Payment Item” shall mean each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.
“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.
“Perfection Certificate” shall mean a Perfection Certificate substantially in the form of Exhibit B to the Guarantee and Collateral Agreement.
“Permitted Acquisition” shall mean the acquisition of an Acquired Entity or Acquired Assets meeting all the criteria of Section 6.04(k).
“Permitted Business” shall mean a business described in Section 6.08.
“Permitted Discretion” shall mean a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment in accordance with customary business practices for asset-based lending transactions.
“Permitted Hedging Agreement” shall mean any Hedging Agreement to the extent constituting a swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates or currency exchange rates, either generally or under specific contingencies, in each case entered into in the ordinary course of business and not for speculative purposes or taking a “market view.”
“Permitted Holders” shall mean, collectively, Charles Young and/or one or more of his family estate planning vehicles or any other Person which, directly or indirectly, is Controlled by him (the “Charles Young Holders”); provided that, from and after the date that is 90 days after Charles Young becomes deceased or incapacitated, the Charles Young Holders shall no longer be Permitted Holders.
“Permitted Investments” shall mean:
(a) Dollars;
(b) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency or instrumentality thereof to the extent such obligations 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 thereof;
(c) 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 maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s;
(d) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;
(e) investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Agent or any domestic office of any commercial bank organized under the laws of the United States of America or any state thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000 and that issues (or the parent of which issues) commercial paper rated at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P;
(f) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (b) above and entered into with a financial institution satisfying the criteria of clause (e) above;
(g) investments in “money market funds” within the meaning of Rule 2a-7 of the Investment Company Act of 1940, as amended, substantially all of whose assets are invested in investments of the type described in clauses (a) through (f) above; and
(h) in the case of any Foreign Subsidiary only, instruments equivalent to those referred to in clauses (a) through (g) above denominated in a foreign currency, which are substantially equivalent in credit quality and tenor to those referred to above and customarily used by businesses for short term cash management purposes in any jurisdiction outside of the United States to the extent reasonably required in connection with any business conducted by any Foreign Subsidiary organized in such jurisdiction.
“Permitted Joint Venture” shall mean any joint venture (which may be in the form of a limited liability company, partnership, corporation or other entity, but shall not include a Subsidiary) in which Parent or any Subsidiary is a joint venturer; provided, however, that the joint venture is engaged solely in a Permitted Business and under the governing documents of the joint venture or an agreement with the other parties to the joint venture Parent or Subsidiary is entitled to participate in the management of such joint venture as a member of such joint venture’s Board of Directors or otherwise.
“Permitted Liens” shall mean Liens expressly permitted pursuant to Section 6.02.
“Permitted Refinancing Indebtedness” shall mean any Indebtedness of Loan Parties or any of Subsidiaries issued in exchange for, or the net proceeds of which are used to purchase, repay, extend, renew, refund, refinance, replace, defease or discharge other Indebtedness of Loan Parties or any of Subsidiaries, as applicable; provided that:
(a) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness being purchased, repaid, extended, renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued and unpaid interest on such Indebtedness being extended, renewed, refunded, refinanced, replaced, defeased or discharged and the amount of all fees and expenses, including premiums, incurred in connection therewith);
(b) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a weighted average life to maturity equal to or greater than the weighted average life to maturity of, the Indebtedness being purchased, repaid, extended, renewed, refunded, refinanced, replaced, defeased or discharged;
(c) if the Indebtedness being purchased, repaid, extended, renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment and/or liens to the Obligations, such Permitted Refinancing Indebtedness is subordinated in right of payment and/or liens to the Obligations on terms at least as favorable to the holders of the Obligations as
those contained in the documentation governing the Indebtedness being purchased, repaid, extended, renewed, refunded, refinanced, replaced, defeased or discharged;
(d) if such Permitted Refinancing Indebtedness is secured, it shall not be secured by any assets other than the assets that secured the Indebtedness being purchased, repaid, extended, renewed, refunded, refinanced, replaced, defeased or discharged; and
(e) such Permitted Refinancing Indebtedness does not add any additional obligors or guarantors with respect to the Indebtedness being purchased, repaid, extended, renewed, refunded, refinanced, replaced, defeased or discharged.
“Person” shall mean any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership, Governmental Authority or other entity.
“Plan” shall mean any “employee benefit plan” as defined in Section 3 of ERISA (other than a Multiemployer Plan) that is subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA which is maintained or contributed to by Parent, any of Subsidiaries or any of their ERISA Affiliates or with respect to which Parent or any Subsidiary could reasonably be expected to incur liability, whether absolute or contingent (including under Section 4069 of ERISA).
“Platform” shall have the meaning assigned to such term in Section 9.01(e).
“Pro Forma Basis” shall mean, with respect to compliance with any test or covenant or calculation of any ratio hereunder, the determination or calculation of such test, covenant or ratio (including in connection with Specified Transactions) in accordance with Section 1.03.
“Pro Rata Percentage” of any Revolving Credit Lender at any time shall mean the percentage of the Total Revolving Credit Commitment represented by such Lender’s Revolving Credit Commitment. In the event the Revolving Credit Commitments shall have expired or been terminated, the Pro Rata Percentages shall be determined on the basis of the Revolving Credit Commitments most recently in effect, giving effect to any subsequent assignments.
“Projections” shall have the meaning assigned to such term in Section 3.05(b).
“Protective Advances” shall have the meaning assigned to such term in Section 2.11(a).
“Public Lender” shall have the meaning assigned to such term in Section 9.01(e).
“Qualified Appraisal” shall mean an appraisal (a) which is or was conducted by an independent appraiser selected or approved by Agent in its Permitted Discretion; (b) which will be or was conducted in such a manner and methodology and of such a scope as is acceptable to Agent in its Permitted Discretion; and (c) upon which Agent and Lenders are expressly permitted to rely.
“Qualified Capital Stock” of any Person shall mean any Equity Interest of such Person that is not Disqualified Stock.
“Qualified Equity Cure Subordinated Debt” shall mean unsecured Indebtedness incurred by Parent, which Indebtedness (a) shall provide for no cash payments of interest and/or principal at any time any Obligations are outstanding, and (b) shall be subordinated to the Obligations pursuant to the terms of a Subordination Agreement between Agent and the holder of the Qualified Equity Cure Subordinated Debt, in form and substance satisfactory to Agent.
“RCRA” shall mean the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).
“Real Property” shall mean all the right, title and interest of any Loan Party or any Subsidiary in and to land, improvements and fixtures, including Leaseholds.
“Receivables” shall mean and include, as to each Loan Party, all of such Loan Party’s accounts (as defined in Article 9 of the UCC as in effect in the State of New York) and all supporting obligations in respect thereof.
“Recipient” shall have the meaning assigned to such term in Section 2.20(f).
“Register” shall have the meaning assigned to such term in Section 9.04(d).
“Regulation S-X” shall mean Regulation S-X (and the interpretations of the Securities and Exchange Commission thereunder) under the Securities Act of 1933, as amended.
“Regulation T” shall mean Regulation T of the FRB as from time to time in effect and all official rulings and interpretations thereunder or thereof.
“Regulation U” shall mean Regulation U of the FRB as from time to time in effect and all official rulings and interpretations thereunder or thereof.
“Regulation X” shall mean Regulation X of the FRB as from time to time in effect and all official rulings and interpretations thereunder or thereof.
“Related Fund” shall mean any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank and other commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the indoor or outdoor environment.
“Relevant Governmental Body” shall mean the FRB or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the FRB or the Federal Reserve Bank of New York, or any successor thereto.
“Required Lenders” shall mean, at any time, (a) that there are 2 or fewer Lenders, all Lenders, and (b) that there are 3 or more Lenders, Lenders having Loans (excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused Revolving Credit Commitments representing more than 50% of the sum of all Loans outstanding (excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused Revolving Credit Commitments at such time; provided that the Revolving Loans, L/C Exposure, Swingline Exposure and unused Revolving Credit Commitments of any Defaulting Lender shall be disregarded in the determination of the Required Lenders at any time.
“Reserves” shall mean, subject to Section 2.01(c), such reserves as Agent may from time to time establish in its Permitted Discretion, including reserves for (a) matters that could adversely affect the Collateral, its value or the amount that Agent and the Lenders might receive from the sale or other disposition thereof or the ability of Agent to realize thereon, (b) sums that any Loan Party is required to pay under any provision of this Agreement or any other Loan Document, (c) amounts owing by any Loan Party to any person to the extent secured by a Lien on, or trust over, any of the Collateral or over any assets or properties of any Customer of any Loan Party, (d) Dilution Reserves, (e) [intentionally omitted], and (f) Landlord Reserves.
“Resolution Authority” shall mean an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” of any Person shall mean any executive officer or Financial Officer of such Person and any other officer or similar official thereof responsible for the administration of the obligations of such Person in respect of this Agreement.
“Restricted Indebtedness” shall mean Indebtedness of Loan Parties or any Subsidiary, the payment, prepayment, repurchase, redemption or acquisition of which is restricted under Section 6.09(b).
“Restricted Payment” shall mean any dividend or other distribution (whether in cash, securities or other property, other than Qualified Capital Stock of the Person making such dividend or distribution that is issued ratably to such Person’s equity holders) with respect to any Equity Interests in Parent or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in Parent or any Subsidiary (other than any such payment made with Qualified Capital Stock of the issuer of the Equity Interests being purchased, redeemed, retired, acquired, cancelled or terminated).
“Revolving Credit Borrowing” shall mean a Borrowing comprised of Revolving Loans made to Borrowers.
“Revolving Credit Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Revolving Loans hereunder (and to acquire participations in Swingline Loans and Letters of Credit as provided for herein) as set forth on Schedule 1.01(a), or in the Assignment and Acceptance pursuant to which such Lender assumed, agreed to provide or agreed to increase its Revolving Credit Commitment, as applicable, as the same may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.
“Revolving Credit Exposure” shall mean, with respect to any Lender at any time, the aggregate principal amount at such time of all outstanding Revolving Loans of such Lender, plus the aggregate amount at such time of such Lender’s L/C Exposure, plus the aggregate amount at such time of such Lender’s Swingline Exposure.
“Revolving Credit Lender” shall mean a Lender with a Revolving Credit Commitment or an outstanding Revolving Loan.
“Revolving Credit Maturity Date” shall mean September 4, 2029.
“Revolving Loans” shall mean (a) the revolving loans made by the Lenders to Borrowers pursuant to Section 2.01 or (b) a Mandatory Borrowing made by the Lenders pursuant to Section 2.22(e).
“Royalty Obligations” shall mean obligations in respect of royalty or similar payments, whether or not incurred as deferred purchase price for assets or otherwise denominated as indebtedness.
“S&P” shall mean Standard & Poor’s Ratings Service, or any successor thereto.
“Sanctioned Entity” shall mean (a) a country or territory or a government of a country or territory, (b) an agency of the government of a country or territory, (c) an organization directly or indirectly controlled by a country or territory or its government, or (d) a Person resident in or determined to be resident in a country or territory, in each case of clauses (a) through (d) that is a target of Sanctions, including a target of any country sanctions program administered and enforced by OFAC.
“Sanctioned Person” shall mean, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, (b) any Person operating, located, organized or resident in a Designated Jurisdiction, (c) any individual or entity that is currently the subject or target of any Sanction or (d) any Person owned or controlled by any such Person or Persons described in the foregoing clause (a), (b) or (c).
“Sanctions” shall mean all 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 OFAC or the U.S. Department of State) or (b) the United Nations Security Council, the European Union, His Majesty’s Treasury or other sanctions authority.
“Sand Mining Leases” shall mean, collectively, all leases of Real Property of a Loan Party at which a Loan Party is actively mining sand.
“SEC” shall mean the United States Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions thereof.
“Secured Bank Product Obligations” shall mean Bank Product Obligations to the extent that such Bank Product Obligations constitute Secured Obligations or otherwise receive the benefit of the security interest of Agent in any Collateral.
“Secured Obligations” shall mean all the “Secured Obligations” as defined in the Guarantee and Collateral Agreement.
“Secured Parties” shall have the meaning assigned to such term in the Guarantee and Collateral Agreement.
“Security Documents” shall mean the Guarantee and Collateral Agreement, each short form security agreement filed with the United States Patent and Trademark Office or the United States Copyright Office, each deposit account control agreement and securities account control agreement executed and delivered pursuant to the Guarantee and Collateral Agreement or this Agreement and each of the other security agreements and other instruments and documents executed and delivered pursuant to any of the foregoing or pursuant to Section 5.12.
“SOFR” shall mean a rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“Software” shall mean any and all (a) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code, including, without limitation, “software” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York and computer programs that may be construed as included in the definition of “goods” in the Uniform Commercial Code as in effect on the date hereof in the State of New York, (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, (d) all outsourced computing and information technology arrangements, including cloud computing and SaaS offerings, and (e) all documentation, including user manuals and other training documentation, related to any of the foregoing, and all media that may contain Software or recorded data of any kind.
“Solvent” shall mean, with respect to any Person or Persons on any date of determination, that on such date such Person or Persons (a) the Fair Value of the assets of such Person or Persons taken as a whole exceeds their Stated Liabilities and Identified Contingent Liabilities, (b) the Present Fair Salable Value of the assets of such Person or Persons taken as a whole exceeds the amount that will be required to pay the probable liability of their Stated Liabilities and Identified Contingent Liabilities, (c) such Person or Persons taken as a whole are not engaged in, and are not about to engage in, business for which they have Unreasonably Small Capital and (d) such Person or Persons taken as a whole will be able to pay their Stated Liabilities and Identified Contingent Liabilities as they mature. For purposes of the definition of “Solvent” the following terms or phrases used in this definition have the following meanings: (i)“Fair Value” means the amount at which the assets (both tangible and intangible), in their entirety, of any Person or Persons taken as a whole would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act; (ii) “Present Fair Salable Value” means the amount that could reasonably be expected to be obtained by an independent willing seller from an independent willing buyer if the assets (both tangible and intangible) of any Person or Persons taken as a whole are sold on a going concern basis with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises insofar as such conditions can be reasonably evaluated; (iii) “Stated Liabilities” means the recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of any Person or Persons taken as a whole, as of the date hereof after giving effect to the consummation of the Transactions (including the execution and delivery of this Agreement, the making of the Loans hereunder and the use of proceeds of such Loans on any date of determination), determined in accordance with GAAP consistently applied; (iv) “Identified Contingent Liabilities” means the maximum estimated amount of liabilities reasonably likely to result from pending litigation, asserted claims and assessments, guaranties, uninsured risks and other contingent liabilities of any Person or Persons taken as a whole after giving effect to the Transactions (including the execution and delivery of this Agreement, the making of the Loans hereunder and the use of proceeds of such Loans on any date of determination) (including all fees and expenses related thereto but exclusive of such contingent liabilities to the extent reflected in Stated Liabilities), as identified and explained in terms of their nature and estimated magnitude by responsible officers of any Person or Persons (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5); (v) “Will be able to pay their Stated Liabilities and Identified Contingent Liabilities as they mature” means any Person or Persons taken as a whole will have sufficient assets and cash flow to pay their respective Stated Liabilities and Identified Contingent Liabilities as those liabilities mature or (in the case of Identified Contingent Liabilities) otherwise become payable, in light of business conducted or anticipated to be conducted by any Person or Persons as reflected in the projected financial statements and in light of the anticipated credit capacity; and (vi) “Do not have Unreasonably Small Capital” means any Person or Persons taken as a whole after consummation of the Transactions (including the execution and delivery of this Agreement, the making of the Loans hereunder and the use of proceeds of such Loans on any date of determination) is a going concern and has sufficient capital to reasonably ensure that it will continue to be a going concern for such period.
“Specified Transaction” shall mean (a) any investment that results in a Person becoming a Subsidiary, any Permitted Acquisition or any disposition that results in a Subsidiary ceasing to be a Subsidiary, (b) any Permitted Acquisition, (c) any Investment, (d) any disposition (including any disposition of a business unit, line of business or division of Parent or a Subsidiary, in each case whether by merger, consolidation, amalgamation or otherwise), (e) any issuance, incurrence, assumption or repayment or redemption of Indebtedness, (f) any issuance or redemption of preferred stock, or (g) any operational change.
“Subleased Equipment” shall mean any Equipment which is (a) leased by a Loan Party from a Person that is not an Affiliate of a Loan Party, (b) subleased by such Loan Party, in the ordinary course of business, to a Subleased Equipment Sublessee pursuant to the terms and provisions of a Subleased Equipment Lease, and (c) the lease referenced in clause (a) above grants the Subleased Equipment Lessor with a Lien in the sublease referenced in clause (b) above.
“Subleased Equipment Lease” shall mean any written lease agreement for Subleased Equipment between a Loan Party, as sublessor, and a Subleased Equipment Sublessee, as sublessee.
“Subleased Equipment Lessor” shall mean a Person that is not an Affiliate of a Loan Party which leases Subleased Equipment to a Loan Party.
“Subleased Equipment Receivable” shall mean any Receivable of a Borrower owing from a Subleased Equipment Sublessee pursuant to a Subleased Equipment Lease (as of the Closing Date, including, without limitation, Receivables constituting “Rental Payments” as defined in that certain Master Lease Agreement, dated as of May 9, 2024 (as amended, restated, supplemented or otherwise modified from time to time, together with all schedules, exhibits and supplements thereto), between Varilease Finance, Inc. and Parent).
“Subleased Equipment Sublessee” shall mean a Person that is not an Affiliate of a Loan Party that leases Subleased Equipment from a Loan Party pursuant to a Subleased Equipment Lease.
“Subordinated Indebtedness” shall mean unsecured Indebtedness of any Loan Party that is contractually subordinated in right of payment to the Obligations pursuant to a Subordination Agreement.
“Subordination Agreement” shall mean a Subordination Agreement between Agent and the holder of any Subordinated Indebtedness, which Subordination Agreement shall be in form and substance reasonably satisfactory to Agent and shall subordinate the payment of such Subordinated Indebtedness to the Obligations on terms reasonably satisfactory to Agent.
“subsidiary” shall mean, with respect to any Person (herein referred to as the “parent”), any corporation, partnership, limited liability company, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are,
at the time any determination is being made, owned, Controlled or held, or (b) that is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“Subsidiary” shall mean any subsidiary of Parent.
“Subsidiary Guarantor” shall mean (a) each direct and indirect Subsidiary listed on Schedule 1.01(c) and (b) subsequent to Closing Date and subject to Section 5.12, (i) any Domestic Subsidiary and (ii) with the prior written consent of Agent, any other Foreign Subsidiary, in each case, that becomes a party to this Agreement and the Guarantee and Collateral Agreement; provided that in no event shall any Excluded Subsidiary be required to become a Subsidiary Guarantor. Notwithstanding any provision of this Agreement, Administrative Loan Party may elect, in its sole discretion (A) to cause any Domestic Subsidiary and (B) with the prior written consent of Agent, to cause any other Foreign Subsidiary, in each case, that is not otherwise required by the terms of any Loan Document, to be or become a Subsidiary Guarantor.
“Swap Obligation” shall mean, with respect to any Guarantor, any Secured Bank Product 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.
“Swingline Commitment” shall mean the commitment of the Swingline Lender to make loans pursuant to Section 2.22, as the same may be reduced from time to time pursuant to Section 2.09.
“Swingline Exposure” shall mean, at any time, the aggregate principal amount at such time of all outstanding Swingline Loans. The Swingline Exposure of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage of the aggregate Swingline Exposure at such time.
“Swingline Lender” shall mean First-Citizens Bank & Trust Company, acting through any of its Affiliates or branches, in its capacity as lender of Swingline Loans hereunder.
“Swingline Loan” shall mean any revolving loan made by the Swingline Lender pursuant to Section 2.22.
“Synthetic Lease” shall mean, as to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (a) that is accounted for as an operating lease and (b) in respect of which the lessee is deemed to own the property so leased for U.S. Federal income tax purposes, other than any such lease under which such Person is the lessor.
“Synthetic Lease Obligations” shall mean, as to any Person, an amount equal to the capitalized amount of the remaining lease payments under any Synthetic Lease that would appear on a balance sheet of such person in accordance with GAAP if such obligations were accounted for as Capital Lease Obligations.
“Synthetic Purchase Agreement” shall mean any swap, derivative or other agreement or combination of agreements pursuant to which any Loan Party or any Subsidiary is or may become obligated to make (a) any payment in connection with a purchase by any third party from a Person other than any Loan Party or any Subsidiary of any Equity Interest or Restricted Indebtedness or (b) any payment (other than on account of a permitted purchase by it of any Equity Interest or Restricted Indebtedness) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Indebtedness; provided that no phantom stock or similar plan providing for payments only to current or former directors, officers or employees of any Loan Party or any Subsidiary (or to their heirs or estates) shall be deemed to be a Synthetic Purchase Agreement.
“Target Person” shall have the meaning assigned to such term in Section 6.04.
“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” shall mean:
(a) for any calculation with respect to a Term SOFR Loan, the rate determined by the Agent to be the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator and obtained by the Agent through the Bloomberg Data License service or a comparable service acceptable to the Agent; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and
(b) for any calculation with respect to a Base Rate Loan on any day, the rate determined by the Agent to be the Term SOFR Reference Rate for a tenor of three months on the day (such day, the “Base Rate Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator and obtained by the Agent through the Bloomberg Data License service or a comparable service acceptable to the Agent; provided, however, that if as of 5:00 p.m. (New York City time) on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for
which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Base Rate SOFR Determination Day.
(c) when used in reference to any Borrowing, that the Loan, or the Loans comprising such Borrowing, bears or bear interest at a rate determined by reference to Adjusted Term SOFR.
“Term SOFR Adjustment” shall mean, for any calculation with respect to a Term SOFR Loan, a percentage per annum as set forth below for the applicable Type of such Loan and (if applicable) Interest Period therefor:
| | | | | |
| Interest Period | Percentage |
| One month | 0% |
| Three months | 0% |
| Six months | 0% |
“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Agent in its reasonable discretion).
“Term SOFR Loan” shall mean any Loan (other than Swingline Loans and Base Rate Loans) which accrues interest solely by reference to Adjusted Term SOFR plus the Applicable Margin, in accordance with the terms of this Agreement.
“Term SOFR Reference Rate” shall mean the rate per annum determined by the Agent as the forward-looking term rate based on SOFR.
“Test Period” shall mean, for any date of determination, the four consecutive fiscal quarters of the Borrowers most recently ended as of such date of determination for which financial statements are available or were required to be delivered and for which a Compliance Certificate is required to be delivered in accordance with Section 5.04(c).
“Thirty-Day Excess Availability” shall mean each day’s Excess Availability during the 30 consecutive day period immediately preceding the date of the proposed transaction for which it is being determined whether the Distribution Conditions or Payment Conditions have been satisfied.
“Total Revolving Credit Commitment” shall mean $30,000,000, decreased by the amount of reductions in the Revolving Credit Commitments made in accordance with
Section 2.09(b) and increased by the amount of any increase in the Revolving Credit Commitments made in accordance with Section 2.24.
“Total Revolving Credit Commitments Increase Effective Date” shall have the meaning assigned to such term in Section 2.24(c).
“Trade Secrets” shall mean any trade secrets or other proprietary and confidential information, including unpatented inventions, invention disclosures, engineering or other technical data, financial data, procedures, know-how, designs personal information, supplier lists, customer lists, business, production or marketing plans, formulae, methods (whether or not patentable), processes, compositions, schematics, ideas, algorithms, techniques, analyses, proposals, source code, object code and data collections.
“Trademarks” shall have the meaning assigned to such term in the definition of “Intellectual Property”.
“Transactions” shall mean, collectively, (a) the execution, delivery and performance by each of Loan Parties of the Loan Documents to which it is a party, the making of the Borrowings and the issuances of the Letters of Credit hereunder from time to time and the use of proceeds thereof, and (b) the payment of related fees and expenses.
“Type”, when used in respect of any Loan or Borrowing, shall refer to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, the term “Rate” shall mean the Adjusted Term SOFR and the Base Rate.
“UCC” shall mean the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.
“UK Financial Institution” shall mean any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” shall mean the Bank of England or any other public administrative authority having responsibility for the resolution of any U.K. Financial Institution.
“Unadjusted Benchmark Replacement” shall mean any applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Unfinanced Capital Expenditures” shall mean, for any period, without duplication, all expenditures of Loan Parties and Subsidiaries that are (or should be) included as capital expenditures on a consolidated statement of cash flows of Parent and Subsidiaries for such period prepared in accordance with GAAP, including amounts capitalized by reason of Capital
Lease Obligations or Synthetic Lease Obligations incurred by Parent and Subsidiaries during such period, in each case to the extent made in cash, but excluding, in each case: (a) any such expenditure made by Parents and its Subsidiaries to the extent not financed with Internally Generated Cash (including any such capital expenditures (1) made to restore, replace or rebuild property to the condition of such property immediately prior to any damage, loss, destruction or condemnation of such property, and other capital expenditures, in each case to the extent such expenditure is made with, or subsequently reimbursed out of, insurance proceeds condemnation awards (or payments in lieu thereof) or damage recovery proceeds relating to any such damage, loss, destruction or condemnation or other expenditures, (2) constituting the reinvestment of Net Cash Proceeds from Asset Sales (or any other disposition of assets) in productive assets of a kind then used or useable in the business of Loan Parties and Subsidiaries, and (3) constituting the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment to the extent of the credit granted by the seller of the equipment being traded at such time), (b) constituting the consideration paid (and transaction expenses incurred) in connection with a Permitted Acquisition, and (c) constituting the purchase price of equipment that has subsequently been refinanced with purchase money Indebtedness or sold in a sale and leaseback transaction, in each case permitted hereunder, to the extent of the cash proceeds received in respect thereof.
“Unfunded Pension Liability” shall mean the excess of a Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Plan’s assets, determined in accordance with the actuarial assumptions used for funding the Plan pursuant to Section 412 of the Code for the applicable plan year.
“Uniform Customs” shall have the meaning assigned to such term in Section 9.07.
“U.S. Government Securities Business Day” shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities, and that is otherwise a Business Day.
“Value” shall mean, with respect to Inventory, the lower of (a) cost computed on an average cost basis in accordance with GAAP, consistently applied (including, for the avoidance of doubt, capitalized freight costs), or (b) market value; provided, that, for purposes of the calculation of the Borrowing Base, (i) the Value of the Inventory shall not include: (A) the portion of the value of Inventory equal to the profit earned by any Affiliate on the sale thereof to any Borrower or (B) write-ups or write-downs in value with respect to currency exchange rates and (ii) notwithstanding anything to the contrary contained herein, the cost of the Inventory shall be computed in the same manner and consistent with the most recent Inventory Appraisal.
“Wet Sand Inventory” shall mean any above-ground sand Inventory located in a wet plant, on a decanting tunnel or part of a wet stockpile, which has not yet been dried and screened to final size for sale as Dry Sand Inventory.
“Wholly Owned Subsidiary” shall mean a Subsidiary of which securities (except for directors’ qualifying shares and, in the case of a Foreign Subsidiary, nominal amounts of shares required by Applicable Law to be held by local nationals) or other ownership interests representing 100% of the outstanding Equity Interests are, at the time any determination is being made, owned, Controlled or held by a Loan Party, by one or more Wholly Owned Subsidiaries of Loan Parties or by Loan Parties and one or more Wholly Owned Subsidiaries of Loan Parties.
“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Write-Down and Conversion Powers” shall mean, (a) 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, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
SECTION 1.02Terms Generally.
(a) The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined.
(b)Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”; and the words “asset” and “property” shall be construed as having the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
(c)All references to “knowledge” of any Loan Party or any Subsidiary shall mean the actual knowledge of a Responsible Officer of such Loan Party or Subsidiary.
(d)The phrase “Material Adverse Effect” shall be deemed to be followed by the phrase “, individually or in the aggregate”.
(e)All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require.
(f)Except as otherwise expressly provided herein, (i) any references to any agreement (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, refinancings, restatements, renewals, restructurings, extensions, supplements and other modifications thereto, but only to the extent that such amendments, refinancings, restatements, renewals, restructurings, extensions, supplements and other modifications are not prohibited by the Loan Documents and (ii) all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided, however, that (A) for purposes of determining the outstanding amount of any Indebtedness, (1) any election by Administrative Loan Party to measure an item of Indebtedness using fair value (as permitted by the Financial Accounting Standards Board Accounting Standards Codification 825-10-25, and any statements replacing, modifying or superseding such guidance) shall be disregarded and such determination shall be made as if such election had not been made and (2) any original issue discount with respect to such Indebtedness shall not be deducted in determining the outstanding amount of such Indebtedness, and (B) if the Administrative Loan Party notifies Agent that Borrowers wish to amend any covenant in Article VI or any related definition to eliminate the effect of any change in GAAP occurring after the date of this Agreement on the operation of such covenant (or if Agent notifies the Administrative Loan Party that the Required Lenders wish to amend Article VI or any related definition for such purpose), then compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Administrative Loan Party and the Required Lenders.
(g)For purposes of determining compliance with any Section of Article VI at any time, in the event that any Lien, Investment, Indebtedness (whether at the time of incurrence or upon application of all or a portion of the proceeds thereof), Asset Sale, Restricted Payment, Affiliate transaction, contractual obligation or prepayment of Indebtedness meets the criteria of one or more than one of the categories of transactions permitted pursuant to any clause of such Sections, such transaction (or portion thereof) at any time shall be permitted under one or more of such clauses as determined by the Administrative Loan Party in its sole discretion at such time.
(h)Notwithstanding any other provision contained herein, any lease that was, or would have been, characterized as an operating lease in accordance with GAAP prior to Parent’s adoption of ASC 842 (regardless of the date on which such lease was or is entered into) shall not be treated as Indebtedness or as a Capital Lease Obligation, and any such lease shall be, for all purposes of this Agreement other than the requirement that financial statements be prepared in accordance with GAAP, treated as though it were reflected on the Borrower’s consolidated financial statements in the same manner as an operating lease would have been reflected prior to the Borrower’s adoption of ASC 842.
(i)Determinations of “extraordinary” shall satisfy each of the following conditions: (A) the underlying event or transaction should possess a high degree of abnormality and be of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the entity, taking into account the environment in which the entity operates, and (B)
the underlying event or transaction should be of a type that would not reasonably be expected to recur in the foreseeable future, taking into account the environment in which the entity operates.
SECTION 1.03Pro Forma Calculations.
(a)Whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to the “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period.
(b)For purposes of calculating any financial ratio or test, Specified Transactions that have been made (i) during the applicable Test Period and (ii) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used in such financial ratio or test attributable to any Specified Transaction (including Indebtedness issued, incurred or assumed or repaid or redeemed as a result of, or to finance, any relevant transaction and for which any such financial ratio or test is being calculated, but excluding the identifiable proceeds of any Indebtedness being incurred substantially simultaneously therewith or as part of the same transaction or series of related transactions for purposes of netting cash to calculate the applicable ratio or test)) had occurred on the first day of the applicable Test Period (or, in the case of the determination of Consolidated Total Assets, the last day). For purposes of making any computation referred to herein: (A) if any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date for which such pro forma determination is made had been the applicable rate for the entire period (taking into account any Hedging Agreement applicable to such Indebtedness if such Hedging Agreement has a remaining term in excess of 12 months), (B) interest on a Capital Lease shall be deemed to accrue at an interest rate reasonably determined by a Responsible Officer, in his or her capacity as such and not in his or her personal capacity, to be the rate of interest implicit in such Capital Lease in accordance with GAAP, (C) interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Administrative Loan Party may designate and (D) interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. If since the beginning of any applicable Test Period any Person that subsequently became a Subsidiary or was merged, amalgamated or consolidated with or into Parent or any of its Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.03, then such financial ratio or test (or the calculation of Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.03; provided that, at the election of the Administrative Loan Party, no such adjustment pursuant to this Section 1.03 shall be required to be made with respect to any Subsidiary acquired pursuant to a Permitted Acquisition or other permitted investment if the aggregate consideration paid for all Permitted Acquisitions and such permitted investments during any fiscal year is less than the greater of (1) $18,500,000
and (2) 5.0% of Consolidated Total Assets in the aggregate for all such transactions during such fiscal year of Parent.
(c)For purposes of calculating Thirty-Day Excess Availability and Excess Availability on a pro forma basis on the date of any action or proposed action, each of Thirty-Day Excess Availability and Excess Availability will be calculated on a pro forma basis after giving effect to the Borrowing of any Loans or issuance of any Letters of Credit in connection with the action or proposed action and, with respect to Thirty-Day Excess Availability, assuming that such Loans and Letters of Credit had remained outstanding throughout the applicable 30-day period for which Thirty-Day Excess Availability is to be determined.
(d)Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Responsible Officer and include, for the avoidance of doubt, the amount of cost savings, operating expense reductions, other operating improvements and synergies projected by Administrative Loan Party in good faith to be realized as a result of specified actions taken (calculated on a pro forma basis as though such cost savings, operating expense reductions, other operating improvements and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions, operating initiatives, operating changes and synergies were realized during the entirety of such period) and giving the full recurring benefit for a period that is associated with any such action taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized relating to such Specified Transaction; provided that (i) such amounts are reasonably identifiable and factually supportable in the good faith judgment of Administrative Loan Party, (ii) such cost savings, operating expense reductions, other operating improvements and synergies are to be realized no later than 18 months after the date of such Specified Transaction, and (iii) no amounts shall be added pursuant to this Section 1.03(c) to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA, whether through a pro forma adjustment or otherwise, with respect to such period; provided that any increase to Consolidated EBITDA as a result of cost savings, operating expense reductions and synergies pursuant to this Section 1.03(c) shall be subject to the limitations set forth in clause (a)(xi) of the definition of “Consolidated EBITDA”, including the proviso at the end of such clause (a)(xi).
(e)Notwithstanding anything to the contrary in this Section 1.03, when calculating the Fixed Charge Coverage Ratio for purposes of determining actual compliance (and not compliance on a Pro Forma Basis) with the Fixed Charge Coverage Ratio pursuant to Section 6.11(a), the events described in this Section 1.03 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect.
SECTION 1.04Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Term SOFR Loan”) or by Class and Type (e.g., a “Term SOFR Revolving
Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Credit Borrowing”) or by Type (e.g., a “Term SOFR Borrowing”) or by Class and Type (e.g., a “Term SOFR Revolving Credit Borrowing”).
SECTION 1.05[Intentionally Omitted].
SECTION 1.06Basket Amounts and Application of Multiple Relevant Provisions. Notwithstanding anything to the contrary, (a) unless specifically stated otherwise herein, any dollar, number, percentage or other amount available under any carve-out, basket, exclusion or exception to any affirmative, negative or other covenant in this Agreement or the other Loan Documents may be accumulated, added, combined, aggregated or used together by any Loan Party and its Subsidiaries without limitation for any purpose not prohibited hereby, and (b) any action or event permitted by this Agreement or the other Loan Documents need not be permitted solely by reference to one provision permitting such action or event but may be permitted in part by one such provision and in part by one or more other provisions of this Agreement and the other Loan Documents.
SECTION 1.07Limited Condition Transactions.
(a) In the case of (i) the incurrence of any Indebtedness (other than Indebtedness hereunder, which shall remain subject to the terms and conditions applicable thereto pursuant to the terms of this Agreement with respect to the impact, if any, of any Limited Condition Transaction) or Liens or the making of any Investments or consolidations, mergers or other fundamental changes pursuant to Section 6.05(a), in each case, in connection with a Limited Condition Transaction or (ii) determining compliance with representations and warranties or the occurrence of any Default or Event of Default, in each case, in connection with a Limited Condition Transaction (other than for purposes of the incurrence of Indebtedness hereunder, each of which shall remain subject to the terms and conditions applicable thereto pursuant to the terms of this Agreement with respect to the impact, if any, of any Limited Condition Transaction), if the Administrative Loan Party has made an LCT Election, the relevant ratios and baskets and whether any such action is permitted hereunder shall be determined as of the date a definitive acquisition agreement for any such Limited Condition Transaction (a “Limited Condition Acquisition Agreement”) is entered into (the “LCT Test Date”), and calculated as if such Limited Condition Transaction (and any other pending Limited Condition Transaction) and other pro forma events in connection therewith (and in connection with any other pending Limited Condition Transaction), including the incurrence of Indebtedness and the use of proceeds thereof, were consummated on such LCT Test Date; provided that if the Administrative Loan Party has made an LCT Election, in connection with measuring compliance with any Section of Article VI following such date and prior to the earlier of the date on which (A) such Limited Condition Transaction is consummated, (B) the applicable Limited Condition Acquisition Agreement is terminated or (C) the time period for consummation thereof pursuant to the applicable Limited Condition Acquisition Agreement has expired, any ratio shall be calculated on a Pro Forma Basis assuming such Limited Condition Transaction (and any other pending Limited Condition Transaction) and other pro forma events in connection therewith (and in connection with any other pending Limited Condition Transaction) have been consummated,
except that (other than solely with respect to the applicable incurrence test under which such Limited Condition Transaction or other transaction in connection therewith is being made) Consolidated EBITDA, Consolidated Total Assets and Consolidated Net Income of any target of such Limited Condition Transaction can only be used in the determination of the relevant ratios and baskets if and when such Limited Condition Transaction has closed.
(b)Notwithstanding anything set forth herein to the contrary, any determination in connection with a Limited Condition Transaction of compliance with representations and warranties or as to the occurrence or absence of any Event of Default hereunder as of the date the applicable Limited Condition Acquisition Agreement (rather than the date of consummation of the applicable Limited Condition Transaction), shall not be deemed to constitute a waiver of or consent to any breach of representations and warranties hereunder or any Event of Default hereunder that may exist at the time of consummation of such Limited Condition Transaction.
SECTION 1.08Interest Rates. The Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation, administration, submission, or calculation of or any other matter related to the Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Benchmark Conforming Changes. The Agent and its affiliates or other related entities may engage in transactions that affect the calculation of the Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Borrowers. The Agent may select information sources or services in its reasonable discretion to ascertain the Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR, or any other Benchmark, in each case pursuant to the terms of this Agreement, and shall have no liability to any Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
SECTION 1.09Division of Limited Liability Company. Any reference herein to a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, assignment, sale or transfer, or similar term, as applicable, to, of or with a separate Person. Any
division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a subsidiary, joint venture or any other like term shall also constitute such a Person or entity).
SECTION 1.10Computation of Interests, Fees, Yield Protection. All interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed based on a year of 360 days, except that interest computed by reference to clause (b) of the definition of Base Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid. Each determination by Agent of any interest, fees or interest rate hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate, refund or proration. All fees payable under Section 2.05 are compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money.
ARTICLE II
THE CREDITS
SECTION 2.01Commitments.
(a)Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Revolving Credit Lender agrees, severally and not jointly, to make Revolving Loans to Borrowers from time to time after the Closing Date, and until the earlier of the Revolving Credit Maturity Date and the termination of the Revolving Credit Commitment of such Lender in accordance with the terms hereof, in an aggregate principal amount at any time outstanding that will not result in such Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Credit Commitment; provided that after giving effect to any Revolving Credit Borrowing, the Aggregate Revolving Credit Exposure shall not exceed the Total Revolving Credit Commitment.
(b)Within the limits set forth in the immediately preceding sentence and subject to the terms, conditions and limitations set forth herein, Borrowers may borrow, pay or prepay and reborrow Revolving Loans.
(c)Anything to the contrary in this Section 2.01 notwithstanding, Agent shall have the right (but not the obligation) at any time, in the exercise of its Permitted Discretion, to establish and increase or decrease Reserves against the Borrowing Base or the Total Revolving Credit Commitments. Notwithstanding anything to the contrary contained herein, (i) the amount of any Reserve established by Agent, and any additional ineligibility criteria established by Agent pursuant to clause (o) of the definition of “Eligible Inventory” or clause (y) of the definition of “Eligible Receivables”, shall have a direct and reasonable relationship to the event, condition, other circumstance, or fact that is the basis for such reserve or additional ineligibility criteria, and shall be a reasonable quantification of the incremental dilution of the Borrowing Base attributable to such contributing factors, and (ii) the amount of any Reserve established by
Agent shall not be duplicative of (A) any other Reserve established and currently maintained or eligibility criteria (including, without limitation, advance rates), (B) any Reserves deducted in computing book value, (iii) any criteria or considerations taken into account in determining the Net Recovery Percentage or Value of Inventory or (iv) items taken into consideration in any applicable appraisal. After the Closing Date, Agent agrees to provide Administrative Loan Party with five days’ notice prior to the establishment or increase in Reserves and Agent agrees to make itself available to discuss the Reserve or increase, and Borrowers may take such action as may be required so that the event, condition, circumstance, or fact that is the basis for such reserve or increase no longer exists, in a manner and to the extent reasonably satisfactory to Agent in the exercise of its Permitted Discretion. In no event shall such notice and opportunity limit the right of Agent to establish or change such Reserve, unless Agent shall have determined, in its Permitted Discretion, that the event, condition, other circumstance, or fact that was the basis for such Reserve or such change no longer exists or has otherwise been adequately addressed by Borrowers and the other Loan Parties.
SECTION 2.02Loans.
(a) Each Loan (other than Swingline Loans) shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their Commitments. The failure of any Lender to make any Loan shall not relieve any other Lender of its obligation to lend hereunder (it being understood that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender). Except for Loans deemed made pursuant to Section 2.02(f), Mandatory Borrowings and except as otherwise provided in Section 2.24, the Loans comprising any Borrowing shall be in an aggregate principal amount that is (i) (A) in the case of Term SOFR Loans, an integral multiple of $100,000 and not less than $500,000, and (B) in the case of Base Rate Loans, an integral multiple of $100,000 and not less than $500,000 or (ii) equal to the remaining available balance of the Commitments.
(b)Subject to Sections 2.02(f), and 2.15, each Borrowing shall be comprised entirely of Base Rate Loans or Term SOFR Loans as Borrowers may request pursuant to Section 2.03. Each Lender may, at its option, make any Term SOFR Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of Borrowers to repay such Loan in accordance with the terms of this Agreement. Borrowings of more than one Type may be outstanding at the same time; provided, however, that Borrowers shall not be entitled to request any Borrowing that, if made, would result in more than ten Term SOFR Borrowings in the aggregate outstanding hereunder at any time (or such greater number of Term SOFR Borrowings as may be acceptable to Agent in its sole discretion). For purposes of the foregoing, (i) Borrowings having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings and (ii) all Term SOFR Loans having the same length and beginning date of their Interest Periods shall be aggregated together and considered one Borrowing for this purpose.
(c)Except with respect to Loans made pursuant to Section 2.02(f), each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City as Agent may designate not later than 1:00 p.m., New York City time, and Agent shall promptly credit the amounts so received to an account designated by the Administrative Loan Party in the applicable Borrowing Request or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders.
(d)Unless Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to Agent such Lender’s portion of such Borrowing, Agent may assume that such Lender has made such portion available to Agent on the date of such Borrowing in accordance with paragraph (c) above and Agent may, in reliance upon such assumption, make available to Borrowers on such date a corresponding amount. If Agent shall have so made funds available then, to the extent that such Lender shall not have made such portion available to Agent, such Lender and Borrowers severally agree to repay to Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to Borrowers to but excluding the date such amount is repaid to Agent at (i) in the case of Borrowers, a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such Lender, a rate determined by Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). If such Lender shall repay to Agent such corresponding amount, such amount shall constitute such Lender’s Loan as part of such Borrowing for purposes of this Agreement.
(e)Notwithstanding any other provision of this Agreement, Borrowers shall not be entitled to request any Revolving Credit Borrowing if the Interest Period requested with respect thereto would end after the Revolving Credit Maturity Date.
(f)If the Issuing Bank shall not have received from Borrowers the payment required to be made by Section 2.23(e) within the time specified in such Section, such Issuing Bank will promptly notify Agent of the L/C Disbursement and Agent will promptly notify each Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately available funds to Agent not later than 2:00 p.m., New York City time, on such date (or, if such Revolving Credit Lender shall have received such notice later than 12:00 p.m., New York City time, on any day, not later than 10:00 a.m., New York City time, on the immediately following Business Day), an amount equal to such Lender’s Pro Rata Percentage of such L/C Disbursement (it being understood that (i) if the conditions precedent to borrowing set forth in Sections 4.01(b), and 4.01(c) have been satisfied, such amount shall be deemed to constitute a Base Rate Revolving Loan of such Lender and, to the extent of such payment, the obligations of Borrowers in respect of such L/C Disbursement shall be discharged and replaced with the resulting a Base Rate Revolving Credit Borrowing and (ii) if such conditions precedent to borrowing have not been satisfied, then any such amount paid by any Revolving Credit Lender shall not constitute a Loan (except for purposes of Section 6.11) and shall not relieve Borrowers from their obligation to reimburse such
L/C Disbursement), and Agent will promptly pay to such Issuing Bank amounts so received by it from the Revolving Credit Lenders. Agent will promptly pay to such Issuing Bank any amounts received by it from Borrowers pursuant to Section 2.23(e) prior to the time that any Revolving Credit Lender makes any payment pursuant to this paragraph (f), and any such amounts received by Agent from Borrowers thereafter will be promptly remitted by Agent to the Revolving Credit Lenders that shall have made such payments and to such Issuing Bank, as their interests may appear. If any Revolving Credit Lender shall not have made its Pro Rata Percentage of such L/C Disbursement available to Agent as provided above, such Lender and Borrowers severally agree to pay interest on such amount, for each day from and including the date such amount is required to be paid in accordance with this paragraph (f) to but excluding the date such amount is paid, to Agent for the account of such Issuing Bank at (i) in the case of Borrowers, a rate per annum equal to the interest rate applicable to Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such Lender, for the first such day, the Federal Funds Rate, and for each day thereafter, the Base Rate.
SECTION 2.03Borrowing Procedure.
(a) In order to request a Borrowing (other than a Swingline Loan, a deemed Borrowing pursuant to Section 2.02(f) or a Mandatory Borrowing pursuant to Section 2.22(e), in each case, as to which this Section 2.03 shall not apply), the Administrative Loan Party shall notify Agent of such request by telephone or email (or, if permitted by Agent, by request posted to Agent’s StuckyNet System) a Notice of Borrowing (i) in the case of a Term SOFR Borrowing, not later than 12:00 p.m., New York City time, three Business Days before a proposed Borrowing, and (ii) in the case of a Base Rate Borrowing, not later than 12:00 p.m., New York City time, one Business Day before a proposed Borrowing. Notices received by Agent after such time shall be deemed received on the next Business Day. Each such telephone (or posted) Notice of Borrowing shall be irrevocable and the Administrative Loan Party agrees to promptly confirm any such telephone request by hand delivery, facsimile or electronic transmission to the Agent of a written Borrowing Request signed by the Administrative Loan Party and which such Borrowing Request shall specify the following information: (A) whether such Borrowing is to be a Term SOFR Borrowing or a Base Rate Borrowing; (B) the date of such Borrowing (which shall be a Business Day); (C) the number and location of the account to which funds are to be disbursed; (D) the amount of such Borrowing; (E) if such Borrowing is to be a Term SOFR Borrowing, the Interest Period with respect thereto; and (F) the Borrower to whom proceeds from such Borrowing are to be disbursed provided, however, that, notwithstanding any contrary specification in any Borrowing Request, each requested Borrowing shall comply with the requirements set forth in Section 2.02. If no election as to the Type of Borrowing is specified in any such Borrowing Request, then the requested Borrowing shall be a Base Rate Borrowing. If no Interest Period with respect to any Term SOFR Borrowing is specified in any such Borrowing Request, then Borrowers shall be deemed to have selected an Interest Period of one month’s duration. Agent shall promptly advise the applicable Lenders of any notice given pursuant to this Section 2.03 (and the contents thereof), and of each Lender’s portion of the requested Borrowing.
(b) Unless payment is otherwise made by Borrowers, the becoming due of any Obligation shall be deemed to be a request for a Base Rate Loan on the due date in the amount due and the Loan proceeds shall be disbursed as direct payment of such Obligation. In addition, Agent may, at its option, upon the occurrence and during the continuance of an Event of Default or upon ten days’ prior written notice to the Borrowers, charge such amount against any operating, investment or other account of a Borrower maintained with Agent or any of its Affiliates.
(c) If a Borrower maintains a disbursement account with Agent or any of its Affiliates, then presentation for payment in the account of a Payment Item when there are insufficient funds to cover it shall be deemed to be a request for a Base Rate Loan on the presentation date, in the amount of the Payment Item. Proceeds of the Loan may be disbursed directly to the account.
SECTION 2.04Evidence of Debt; Repayment of Loans.
(a) Borrowers hereby unconditionally promise to pay (i) to Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan of such Lender on the Revolving Credit Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Revolving Credit Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two (2) Business Days after such Swingline Loan is made; provided that on each date that a Revolving Credit Borrowing is made, Borrowers shall repay all Swingline Loans owing by Borrowers that were outstanding on the date of such Borrowing was requested together with all interest due and owing on such Swingline Loans.
(b)Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Borrowers to such Lender resulting from each Loan made by 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.
(c)Agent shall maintain accounts in which it will record (i) the amount of each Loan made (or deemed made) to Borrowers hereunder, the Class and Type thereof and, if applicable, the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from Borrowers to each Lender hereunder and (iii) the amount of any sum received by Agent hereunder from Borrowers and each Lender’s share thereof.
(d)The entries made in the accounts maintained pursuant to paragraphs (b) and (c) above shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Lender or Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of Borrowers to repay the Loans in accordance with the terms of this Agreement. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of Agent in respect of such entries, the accounts and records of Agent shall control in the absence of manifest error.
(e)Any Lender may request that Loans made by it hereunder be evidenced by a promissory note. In such event, Borrowers shall execute and deliver to such Lender a promissory note payable to such Lender and its registered assigns and in form and substance reasonably acceptable to Agent and Borrowers. Notwithstanding any other provision of this Agreement, in the event any Lender shall request and receive such a promissory note, the interests represented by such note shall at all times (including after any assignment of all or part of such interests pursuant to Section 9.04) be represented by one or more promissory notes payable to the payee named therein or its registered assigns.
SECTION 2.05Fees.
(a) Borrowers agree to pay to each Lender (which is not a Defaulting Lender), through Agent, on the first day of January, April, July and October in each year and on each date on which the Revolving Credit Commitment of such Lender shall expire or be terminated as provided herein, a commitment fee (a “Commitment Fee”) equal to (i) if the daily unused amount of the Total Revolving Credit Commitments during the preceding quarter (or shorter period commencing with the date hereof or ending with the Revolving Credit Maturity Date or the date on which the Revolving Credit Commitment of such Lender shall expire or be terminated) is less than or equal to 50% of the Total Revolving Credit Commitments, 0.25% per annum on the daily unused amount of the Revolving Credit Commitment of such Lender during the preceding quarter (or shorter period commencing with the date hereof or ending with the Revolving Credit Maturity Date or the date on which the Revolving Credit Commitment of such Lender shall expire or be terminated); and (ii) if the daily unused amount of the Total Revolving Credit Commitment during the preceding quarter (or shorter period commencing with the date hereof or ending with the Revolving Credit Maturity Date or the date on which the Revolving Credit Commitment of such Lender shall expire or be terminated) is greater than 50% of the Total Revolving Credit Commitments, 0.50% per annum on the daily unused amount of the Revolving Credit Commitment of such Lender during the preceding quarter (or shorter period commencing with the date hereof or ending with the Revolving Credit Maturity Date or the date on which the Revolving Credit Commitment of such Lender shall expire or be terminated). For purposes of calculating Commitment Fees only, no portion of the Revolving Credit Commitments shall be deemed utilized as a result of outstanding Swingline Loans unless and until a Mandatory Borrowing is effected in connection therewith in accordance with Section 2.22(e).
(b)Borrowers agree to pay to Agent, for its own account, the fees payable to Agent in its capacity as such set forth in Agent Fee Letter at the times and in the amounts specified therein (the “Agent Fees”).
(c)Borrowers agree to pay (i) to each Revolving Credit Lender (which is not a Defaulting Lender except to the extent provided in Section 2.26(a)(iii)(B)), through Agent, on the first day of January, April, July and October of each year and on the date on which the Revolving Credit Commitment of such Lender shall be terminated as provided herein, a fee (an “L/C Participation Fee”) calculated on such Lender’s Pro Rata Percentage of the daily aggregate L/C Exposure (excluding the portion thereof attributable to unreimbursed L/C
Disbursements) during the preceding quarter (or shorter period commencing with the date hereof or ending with the Revolving Credit Maturity Date or the date on which all Letters of Credit have been canceled or have expired and the Revolving Credit Commitments of all Lenders shall have been terminated) at a rate per annum equal to the Applicable Margin from time to time used to determine the interest rate on Revolving Credit Borrowings comprised of Term SOFR Loans pursuant to Section 2.06(b) and (ii) to each Issuing Bank with respect to each Letter of Credit issued by such Issuing Bank, on the first day of January, April, July and October of each year and on the date on which the Revolving Credit Commitments are terminated and no Letters of Credit are outstanding, a fronting fee which shall accrue at a rate equal to 0.25% per annum on the average daily amount of the L/C Exposure of such Issuing Bank (in its capacity as an Issuing Bank) applicable to such Letter of Credit (excluding any portion thereof attributable to unreimbursed L/C Disbursements) during the period from and including the date such Letter of Credit is issued to but excluding the later of the date of termination of the Revolving Credit Commitments and the date on which there ceases to be any L/C Exposure with respect to such Letter of Credit, as well as each Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder (collectively, the “Issuing Bank Fees”).
(d)All Fees shall be paid on the dates due, in immediately available funds, to Agent for distribution, if and as appropriate, among the Lenders entitled thereto, except that the Issuing Bank Fees shall be paid directly to the applicable Issuing Bank. Once paid, none of the Fees shall be refundable under any circumstances, absent manifest error in the calculation of such Fees.
SECTION 2.06Interest on Loans.
(a) Subject to the provisions of Section 2.07, the Loans comprising each Base Rate Borrowing, including each Swingline Loan, shall bear interest at all times, and calculated from and including the date of such Borrowing to but excluding the date of repayment thereof) at a rate per annum equal to the Base Rate in effect from time to time plus the Applicable Margin in effect from time to time.
(b)Subject to the provisions of Section 2.07, the Loans comprising each Term SOFR Borrowing shall bear interest at a rate per annum equal to the Adjusted Term SOFR Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin in effect from time to time.
(c)Subject to the provisions of Section 2.07, interest on all Obligations other than those set forth in clauses (a) and (b) above (including, to the extent permitted by law, interest not paid when due) shall bear interest at a rate per annum equal to the Base Rate in effect from time to time plus the Applicable Margin for Base Rate Loans.
(d)Except as otherwise provided in this Agreement, interest shall accrue from the date a Loan is advanced or Obligation is incurred or payable, until paid in full by Borrowers, and shall in no event be less than zero at any time. Interest accrued on the Base Rate Loans shall be due and payable in arrears, (i) on the first day of each fiscal quarter; (ii) on any date of
prepayment, with respect to the principal amount being prepaid; and (iii) on the Revolving Credit Maturity Date. Interest accrued on Term SOFR Loans shall be due and payable in arrears, (A) on the last day of the Interest Period; provided, that if any Interest Period for a Term SOFR Loan exceeds three (3) months, interest shall be due and payable on the date that falls every three months after the beginning of such Interest Period; (B) on any date of prepayment, with respect to the principal amount being prepaid; and (C) on the Revolving Credit Maturity Date. Interest accrued on any other Obligations shall be due and payable as provided in the Loan Documents or, if no payment date is specified, on demand.
SECTION 2.07Default Interest. During any Event of Default under Section 7.01(g) or 7.01(h) with respect to any Loan Party, or during any other Event of Default if Agent or Required Lenders in their discretion so elect, Obligations shall bear interest at the Default Rate (whether before or after any judgment), payable on demand.
SECTION 2.08[Intentionally Omitted].
SECTION 2.09Termination and Reduction of Commitments.
(a) The Revolving Credit Commitments, the Swingline Commitment and the L/C Commitment shall automatically terminate on the Revolving Credit Maturity Date.
(b)Upon at least three Business Days’ prior written notice to Agent, Borrowers may at any time, without premium or penalty, in whole permanently terminate, or from time to time in part permanently reduce, the Revolving Credit Commitments or the Swingline Commitment; provided, however, that (i) each partial reduction of the Revolving Credit Commitments shall be in an integral multiple of $500,000 and in a minimum amount of $1,000,000, (ii) each partial reduction of the Swingline Commitment shall be in an integral multiple of $100,000 and in a minimum amount of $500,000 and (iii) the Total Revolving Credit Commitment shall not be reduced to an amount that is less than the Aggregate Revolving Credit Exposure at the time. Each notice delivered by Borrowers pursuant to this Section 2.09(b) shall be irrevocable; provided that a notice of termination or reduction of the Revolving Credit Commitments delivered by Borrowers may state that such notice is conditioned upon the effectiveness of other credit facilities or the receipt of proceeds from the issuance of other Indebtedness or Equity Interests or the consummation of a Change in Control, in which case such notice may be revoked by Borrowers (by notice to Agent on or prior to the specified effective date) if such condition is not satisfied.
(c)Each reduction in the Revolving Credit Commitments hereunder shall be made ratably among the Lenders in accordance with their respective Commitments. Borrowers shall pay to Agent for the account of the applicable Lenders, on the date of each termination or reduction, the accrued and unpaid Commitment Fees on the amount of the Revolving Credit Commitments so terminated or reduced accrued to but excluding the date of such termination or reduction.
SECTION 2.10Application of Term SOFR to Outstanding Loans, Conversion and Continuation of Borrowings. Borrowers may on any Business Day elect to convert any portion
of the Base Rate Loans to, or to continue any Term SOFR Loan at the end of its Interest Period as, a Term SOFR Loan, by giving a Notice of Conversion/Continuation to Agent, which such notice shall be irrevocable and shall specify the amount and type of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest Period, (a) not later than 12:00 p.m., New York City time, one Business Day prior to conversion, to convert any Term SOFR Borrowing into a Base Rate Borrowing, (b) not later than 12:00 p.m., New York City time, three Business Day prior to conversion or continuation, to convert any Base Rate Borrowing into a Term SOFR Borrowing or to continue any Term SOFR Borrowing as a Term SOFR Borrowing for an additional Interest Period and (c) not later than 12:00 p.m., New York City time, three Business Days prior to conversion, to convert the Interest Period with respect to any Term SOFR Borrowing to another permissible Interest Period, subject in each case to the following:
(i)each conversion or continuation shall be made pro rata among the Lenders in accordance with the respective principal amounts of the Loans comprising the converted or continued Borrowing;
(ii)if less than all the outstanding principal amount of any Borrowing shall be converted or continued, then each resulting Borrowing shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal amount and maximum number of Borrowings of the relevant Type;
(iii)each conversion shall be effected by each Lender and Agent by recording for the account of such Lender the new Loan of such Lender resulting from such conversion and reducing the Loan (or portion thereof) of such Lender being converted by an equivalent principal amount; accrued interest on any Term SOFR Loan (or portion thereof) being converted shall be paid by Borrowers at the time of conversion;
(iv)if any Term SOFR is converted at a time other than the end of the Interest Period applicable thereto, Borrowers shall pay, upon demand, any amounts due to the Lenders pursuant to Section 2.16;
(v)any portion of a Borrowing maturing or required to be repaid in less than one month may not be converted into or continued as a Term SOFR Borrowing;
(vi)any portion of a Term SOFR Borrowing that cannot be converted into or continued as a Term SOFR Borrowing by reason of the immediately preceding clause shall be automatically converted at the end of the Interest Period in effect for such Borrowing into a Base Rate Borrowing;
(vii)if, upon the expiration of any Interest Period for any Term SOFR Loan, Borrowers shall have failed to deliver a Notice of Conversion/Continuation, they shall be deemed to have elected to convert such Loan into a Base Rate Loan;
(viii)Agent does not warrant or accept responsibility for, nor shall it have any liability with respect to, administration, submission or any other matter related to any rate described in the definition of Adjusted Term SOFR; and
(ix)during any Event of Default, Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a Term SOFR Loan.
Each notice pursuant to this Section 2.10 shall be in writing and irrevocable and shall refer to this Agreement and specify (A) the identity and amount of the Borrowing that Borrowers request be converted or continued, (B) whether such Borrowing is to be converted to or continued as a Term SOFR Borrowing or a Base Rate Borrowing, (C) if such notice requests a conversion, the date of such conversion (which shall be a Business Day) and (D) if such Borrowing is to be converted to or continued as a Term SOFR Borrowing, the Interest Period with respect thereto. If no Interest Period is specified in any such notice with respect to any conversion to or continuation as a Term SOFR Borrowing, Borrowers shall be deemed to have selected an Interest Period of one month’s duration. Agent shall advise the Lenders of any notice given pursuant to this Section 2.10 and of each Lender’s portion of any converted or continued Borrowing. If Borrowers shall not have given notice in accordance with this Section 2.10 to continue any Borrowing into a subsequent Interest Period (and shall not otherwise have given notice in accordance with this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the Interest Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be converted into a Base Rate Borrowing.
SECTION 2.11Protective Advances and Optional Overadvances.
(a)Any contrary provision of this Agreement or any other Loan Document notwithstanding (including Sections 2.01 and 2.02), Agent hereby is authorized by Borrowers and the Lenders, from time to time in Agent’s sole discretion, (i) after the occurrence and during the continuance of a Default, or (ii) at any time that any of the other applicable conditions precedent set forth in Section 4.02 are not satisfied, to make Revolving Loans to, or for the benefit of, Borrowers on behalf of the Lenders that Agent, in its discretion deems necessary or desirable (A) to preserve or protect the Collateral, or any portion thereof, or (B) to enhance the likelihood of repayment of the Obligations (any of the Revolving Loans described in this Section 2.11(a) shall be referred to as “Protective Advances”) so long as (1) after giving effect to such Revolving Loans, the aggregate outstanding principal amount of all Protective Advances and Overadvances does not exceed an amount equal to 10% of the Total Revolving Credit Commitments, and (2) after giving effect to such Revolving Loans, the outstanding principal amount of the Aggregate Revolving Credit Exposure (including all outstanding Protective Advances and Overadvances) does not exceed an amount equal to the Total Revolving Credit Commitments.
(b)Any contrary provision of this Agreement or any other Loan Document notwithstanding, the Lenders hereby authorize Agent or the Swingline Lender, as applicable, and either Agent or the Swingline Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Revolving Loans and/or Swingline Loans to Borrowers
notwithstanding that, after giving effect thereto or at the time of making thereof, the Aggregate Revolving Credit Exposure exceeds the Borrowing Base (such Revolving Loans being referred to herein as “Overadvances”), so long as (i) after giving effect to such Revolving Loans or Swingline Loans, the aggregate outstanding amount of all Protective Advances and Overadvances does not exceed an amount equal to 10% of the Total Revolving Credit Commitments, and (ii) after giving effect to such Revolving Loans or Swingline Loans, the outstanding principal amount of the Aggregate Revolving Credit Exposure (including all outstanding Protective Advances and Overadvances) does not exceed an amount equal to the Total Revolving Credit Commitments. In the event Agent obtains actual knowledge that the aggregate outstanding amount of the Aggregate Revolving Credit Exposure exceeds the amounts permitted by the immediately foregoing provisions, regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the loan account of Borrowers for interest, fees or expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral or its value, in which case Agent may make such Overadvances and provide notice as promptly as practicable thereafter), and the Lenders thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented with Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of the Aggregate Revolving Credit Exposure to an amount permitted by the preceding sentence. In such circumstances, if any Lender objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders. In any event: (A) if any unintentional Overadvance remains outstanding for more than 30 days, unless otherwise agreed to by the Required Lenders, Borrowers shall immediately repay Revolving Loans in an amount sufficient to eliminate all such unintentional Overadvances, and (B) after the date all such Overadvances have been eliminated, there must be at least 30 consecutive days before intentional Overadvances are made. The foregoing provisions are meant for the benefit of the Lenders and Agent and are not meant for the benefit of Borrowers, which shall continue to be bound by the provisions of Section 2.01. Each Lender shall be obligated to settle with Agent in accordance with Agent’s customary procedures for the amount of such Lender’s Pro Rata Share of any unintentional Overadvances by Agent reported to such Lender, any intentional Overadvances made as permitted under this Section 2.11(b), and any Overadvances resulting from the charging to the loan account of Borrowers for interest, fees or expenses.
(c)Each Protective Advance and each Overadvance shall be deemed to be a Revolving Loan hereunder; except, that, no Protective Advance or Overadvance shall be eligible to be a Term SOFR Loan and, prior to settlement therefor, all payments on the Protective Advances shall be payable to Agent solely for its own account. The Protective Advances and Overadvances shall be repayable on demand, secured by the Collateral, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Revolving Loans that are Base Rate Revolving Loans. The ability of Agent to make Protective Advances is separate and distinct from its ability to make Overadvances and its ability to make Overadvances is separate and distinct from its ability to make Protective Advances. The provisions of this Section 2.11 are for the exclusive benefit of Agent, the Swingline Lender and the Lenders and are not intended to benefit Borrowers in any way.
SECTION 2.12Voluntary Prepayment.
(a) Borrowers shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, upon at least three Business Days’ prior written notice (or telephone notice promptly confirmed by written notice) in the case of Term SOFR Loans, or written notice (or telephone notice promptly confirmed by written notice) at least one Business Day prior to the date of prepayment in the case of Base Rate Loans, to Agent before 12:00 p.m., New York City time; provided, however, that at Borrowers’ election in connection with any prepayment of Revolving Loans pursuant to this Section 2.12(a), such prepayment shall not, so long as no Event of Default then exists, be applied to any Revolving Loan of a Defaulting Lender.
(b)Each notice of prepayment shall specify the prepayment date and the principal amount of each Borrowing (or portion thereof) to be prepaid, shall, unless rescinded as provided below, be irrevocable and shall commit Borrowers to prepay such Borrowing by the amount stated therein on the date stated therein. Notwithstanding anything to the contrary contained in this Agreement, Borrowers may rescind any notice of prepayment under Section 2.12(a) by notice to Agent on the date of prepayment if such prepayment would have resulted from an acquisition, an Asset Sale or other disposition of assets or a refinancing of all or any portion of the applicable Class, which acquisition, Asset Sale, disposition or refinancing shall not be consummated or otherwise shall be delayed. All prepayments under this Section 2.12 shall be subject to any payments required to be made by Borrowers pursuant to Section 2.16, but otherwise may be made without premium or penalty. All prepayments under this Section 2.12 (other than prepayments of Base Rate Revolving Loans that are not made in connection with the termination or permanent reduction of the Revolving Credit Commitments) shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.
(c)Notwithstanding the foregoing, no prior notice or minimum amounts shall apply to any prepayments of any Borrowing during a Cash Dominion Period.
SECTION 2.13Mandatory Prepayments.
(a) In the event of any termination of all the Revolving Credit Commitments, Borrowers shall, on the date of such termination, repay or prepay all outstanding Revolving Credit Borrowings and all outstanding Swingline Loans and replace or cause to be canceled (or make other arrangements reasonably satisfactory to Agent and each Issuing Bank with respect to) all outstanding Letters of Credit issued by such Issuing Bank. If, after giving effect to any partial reduction of the Revolving Credit Commitments or at any other time, the Aggregate Revolving Credit Exposure would exceed the Total Revolving Credit Commitment, then Borrowers shall, on the date of such reduction or at such other time, repay or prepay Revolving Credit Borrowings or Swingline Loans (or a combination thereof) and if, after the Revolving Credit Borrowings and Swingline Loans shall have been repaid or prepaid in full, the Aggregate Revolving Credit Exposure continues to exceed the Total Revolving Credit Commitment, then Borrowers shall Cash Collateralize or provide a backstop letter of credit with respect to such excess in accordance with Section 2.13(b).
(b)Upon receipt of notice and upon the request of Agent, if the L/C Exposure shall exceed the L/C Commitment on any date, Borrowers shall (i) Cash Collateralize such excess with an amount in cash equal to 102% of such excess as of such date or (ii) provide a backstop letter of credit in a face amount equal to 102% of such excess as of such date from an issuer and pursuant to arrangements reasonably satisfactory to Agent and each applicable Issuing Bank.
(c)If at any time the Aggregate Revolving Credit Exposure exceeds the Line Cap at such time, the Borrowers, jointly and severally, shall, without notice or demand, immediately first, repay or prepay Swingline Loans, second, repay or prepay Revolving Loans, and third, replace outstanding Letters of Credit or Cash Collateralize outstanding Letters of Credit in accordance with the procedures set forth in Section 2.23(k) in an aggregate amount sufficient to eliminate such excess; except, that, if the Aggregate Revolving Credit Exposure exceeds the Line Cap as a direct result of the establishment of a Reserve and not as a result of any other factor, such excess shall be repaid within five (5) days from the date such excess first exists. Mandatory prepayments of Loans made pursuant to this clause (c) shall not reduce the Total Revolving Credit Commitment.
(d)At any time during the continuance of a Cash Dominion Period, Loan Parties shall repay or prepay the Loans in an amount equal to 100% of the Net Cash Proceeds of any Collateral received from any Asset Sale (or any other disposition of Collateral) by any Loan Party or from any Casualty Event, such repayments to be made promptly but in no event more than three Business Days following receipt of such net cash proceeds, and until the date of payment, such proceeds shall be held in trust for Agent. If an Event of Default exists and is continuing, such repayment or prepayment shall be applied in accordance with Section 7.02. If no Event of Default exists and is continuing, such repayment or prepayment shall be applied against the Obligations as follows: first, to repay or prepay Swingline Loans, second, to repay or prepay Revolving Loans, and third, to replace outstanding Letters of Credit or Cash Collateralize outstanding Letters of Credit in accordance with the procedures set forth in Section 2.23(k). Mandatory prepayments of Loans made pursuant to this clause (d) shall not reduce the Total Revolving Credit Commitment.
(e)Each notice of prepayment shall specify the prepayment date, the Class and Type of each Loan being prepaid and the principal amount of each Loan (or portion thereof) to be prepaid. All prepayments of Borrowings under this Section 2.13 shall be subject to Section 2.16, but shall otherwise be made without premium or penalty, and (other than prepayments of Base Rate Revolving Loans that are not made in connection with the termination or permanent reduction of the Revolving Credit Commitments) shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.
SECTION 2.14Change in Circumstances.
(a) [Intentionally Omitted].
(b)If any Lender or any Issuing Bank shall have determined that any Change in Law regarding capital adequacy or liquidity has or would have the effect of reducing the rate
of return on such Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made or participations in Letters of Credit purchased by such Lender pursuant hereto or the Letters of Credit issued by such Issuing Bank pursuant hereto to a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s holding company with respect to capital adequacy) by an amount deemed by such Lender or such Issuing Bank to be material, then from time to time as specified in paragraph (c) below, Borrowers shall pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction suffered.
(c)A certificate of a Lender or an Issuing Bank setting forth in reasonable detail the calculation of the amount or amounts (and the basis thereof) necessary to compensate such Lender or such Issuing Bank or its holding company, as applicable, as specified in paragraph (a) or (b) above shall be delivered to the Administrative Loan Party and shall be conclusive absent manifest error. Borrowers shall pay such Lender or such Issuing Bank the amount shown as due on any such certificate delivered by it within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or any Issuing Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation; provided that Borrowers shall not be under any obligation to compensate any Lender or such Issuing Bank under paragraph (a) or (b) above with respect to increased costs or reductions incurred more than 180 days prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the Administrative Loan Party of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The protection of this Section 2.14 shall be available to each Lender and each Issuing Bank regardless of any possible contention of the invalidity or inapplicability of the Change in Law that shall have occurred or been imposed.
SECTION 2.15Illegality. If any Lender determines, acting reasonably, that any applicable law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to SOFR, the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR, or to determine to charge interest rates based upon, SOFR, the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR, then, upon notice thereof by such Lender to the Administrative Loan Party (through the Agent), (a) any obligation of the Lenders to make Term SOFR Loans, and any right of the Borrowers to continue Term SOFR Loans or to convert Base Rate Loans to Term SOFR Loans, shall be suspended, and (b) the interest rate on
which Base Rate Loans shall, if necessary to avoid such illegality, be determined by the Agent shall be so determined without reference to clause (c) of the definition of “Base Rate”, in each case until such Lender notifies the Agent and the Administrative Loan Party that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice by the Administrative Loan Party, the Borrowers shall, if necessary to avoid such illegality, upon demand from any Lender (with a copy to the Agent), prepay or, if applicable, convert all Term SOFR Loans to Base Rate Loans (the interest rate on which Base Rate Loans shall, if necessary to avoid such illegality, be determined by the Agent shall be so determined without reference to clause (c) of the definition of “Base Rate”), on the last day of the Interest Period therefor, if all affected Lenders may lawfully continue to maintain such Term SOFR Loans to such day, or immediately, if any Lender may not lawfully continue to maintain such Term SOFR Loans to such day, in each case until the Agent is advised in writing by each affected Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon SOFR, the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR. Upon any such prepayment or conversion, the Borrowers shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 2.14. Each Lender agrees to use reasonable efforts consistent with legal and regulatory requirements to designate a different lending office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be disadvantageous to such Lender or cost any additional amount.
SECTION 2.16Funding Losses. In the event of (a) the payment of any principal of any Term SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (b) the continuation, conversion of any Term SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (c) the failure to borrow, convert, continue or prepay any Term SOFR Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Term SOFR Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.03, then, in any such event, the Borrower shall compensate each Lender for any loss, cost and expense attributable to such event, including any loss, cost or expense arising from the liquidation or redeployment of funds or from any fees payable but excluding any loss of anticipated profits.
SECTION 2.17Pro Rata Treatment. Except as provided below in this Section 2.17 with respect to Swingline Loans and subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders, and as required under Section 2.15, each Borrowing, each payment or prepayment of principal of any Borrowing, each payment of interest on the Loans, each payment of the Commitment Fees, each reduction of the Revolving Credit Commitments and each conversion of any Borrowing to or continuation of any Borrowing as a Borrowing of any Type shall be allocated pro rata among the Lenders in accordance with their respective Commitments (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans); it being acknowledged that this Section 2.17 shall not apply to any payment received by any Lender as consideration for the assignment or participation in any Loan to any assignee or participant in accordance with this
Agreement. For purposes of determining the available Revolving Credit Commitments of the Lenders at any time (other than to the extent provided in Section 2.05(a)), each outstanding Swingline Loan shall be deemed to have utilized the Revolving Credit Commitments of the Lenders (including those Lenders which shall not have made Swingline Loans) pro rata in accordance with such respective Revolving Credit Commitments. Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made hereunder, Agent may, in its discretion, round each Lender’s percentage of such Borrowing to the next higher or lower whole Dollar amount.
SECTION 2.18Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise of a right of banker’s lien, setoff or counterclaim against Borrowers or any other Loan Party, or pursuant to a secured claim under Section 506 of the Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, obtain payment (voluntary or involuntary) in respect of any Loan or L/C Disbursement as a result of which the unpaid principal portion of its Loans and participations in L/C Disbursements shall be proportionately less than the unpaid principal portion of the Loans and participations in L/C Disbursements of any other Lender, it shall be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in the Loans and L/C Exposure of such other Lender, so that the aggregate unpaid principal amount of the Loans and L/C Exposure and participations in Loans and L/C Exposure held by each Lender shall be in the same proportion to the aggregate unpaid principal amount of all Loans and L/C Exposure then outstanding as the principal amount of its Loans and L/C Exposure prior to such exercise of banker’s lien, setoff or counterclaim or other event was to the principal amount of all Loans and L/C Exposure outstanding prior to such exercise of banker’s lien, setoff or counterclaim or other event; provided, however, that (a) if any such purchases or adjustments shall be made pursuant to this Section 2.18 and the payment giving rise thereto shall thereafter be recovered, such purchases or adjustments shall be rescinded to the extent of such recovery and the purchase prices or adjustment restored without interest and (b) the provisions of this Section 2.18 shall not be construed to apply to any payment made by Borrowers pursuant to and in accordance with the express terms of this Agreement or any payment received by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to Borrowers or any of its Affiliates (as to which the provisions of this Section 2.18 shall not apply). Borrowers expressly consent to the foregoing arrangements and agree that any Lender holding a participation in a Loan or L/C Disbursement deemed to have been so purchased may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing by Borrowers to such Lender by reason thereof as fully as if such Lender had made a Loan directly to Borrowers in the amount of such participation.
SECTION 2.19Payments.
(a) Borrowers shall make each payment (including principal of or interest on any Borrowing or any L/C Disbursement, or any Fees or other amounts) hereunder and under any other Loan Document not later than 12:00 p.m., New York City time, on the date when due
in immediately available Dollars, without setoff, defense or counterclaim; provided that on the Revolving Credit Maturity Date or such earlier date the Revolving Credit Commitments are terminated pursuant to Section 2.09, the payment of principal, interest, Fees and other amounts owing hereunder shall be made not later than 5:00 p.m., New York City time. Any amounts received after such time on any date may, in the discretion of Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. Each such payment (other than Issuing Bank Fees, which shall be paid directly to the applicable Issuing Bank and principal of and interest on Swingline Loans, which shall be paid directly to the Swingline Lender except as otherwise provided in Section 2.22(d)) shall be made to Agent at its offices at 520 Madison Avenue, New York, NY 10022 (or such other office as Agent may specify in writing from time to time to the Administrative Loan Party and the Lenders). Agent shall promptly distribute to each Lender any payments received by Agent on behalf of such Lender.
(b)Except as otherwise expressly provided herein, whenever any payment (including principal of or interest on any Borrowing or any Fees or other amounts) hereunder or under any other Loan Document shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or Fees, if applicable.
(c)Any payment of a Term SOFR Loan prior to the end of its Interest Period shall be accompanied by all amounts due under Section 2.29.
(d)Borrowers agree that Agent shall have the continuing, exclusive right to apply and reapply payments and proceeds of Collateral against the Obligations, in such manner as Agent deems advisable, but whenever possible, any prepayment of Loans shall be applied first to Base Rate Loans and then to Term SOFR Loans.
SECTION 2.20Taxes.
(a) Except where required by a Governmental Authority, any and all payments by or on account of any obligation of Borrowers or any other Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Taxes. If Agent or any Loan Party determines, in its reasonable discretion exercised in good faith, that it is so required to withhold Taxes, then Agent or such Loan Party or such Subsidiary may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with Applicable Law. If such Taxes are Indemnified Taxes or Other Taxes, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.20) Agent, each Lender and each Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) Borrowers or such other Loan Party shall make such deductions and (iii) Borrowers or such other Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.
(b)In addition, Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.
(c)Borrowers or applicable Loan Party, as the case may be, shall indemnify Agent, each Lender and each Issuing Bank, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes payable or paid by Agent, such Lender or such Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of Borrowers or any other Loan Party hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.20) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail the basis for and the calculation of the amount of such payment or liability delivered to the Administrative Loan Party by a Lender or an Issuing Bank, or by Agent on behalf of itself, a Lender or an Issuing Bank, shall be conclusive absent manifest error.
(d)Each Lender shall severally indemnify Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that Loan Parties have not already indemnified Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(f) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by Agent shall be conclusive absent manifest error. Each Lender hereby authorizes Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by Agent to the Lender from any other source against any amount due to Agent under this paragraph (d).
(e)As soon as practicable after any payment of Indemnified Taxes or Other Taxes by Borrowers or any other Loan Party to a Governmental Authority, the Administrative Loan Party shall deliver to Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Agent.
(f)Agent, each Lender and each Issuing Bank (collectively, “Recipients” and individually, a “Recipient”) that is not a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) and that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which Borrowers are located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement or under any other Loan Document shall deliver to the Administrative Loan Party (with a copy to Agent) and, if required, to any applicable Governmental Authority, such properly completed and executed
documentation prescribed by Applicable Law or reasonably requested by the Administrative Loan Party or Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. Without limiting the generality of the foregoing, each Recipient that is not a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) shall deliver to the Administrative Loan Party and Agent on or prior to the date on which such Recipient becomes a party to this Agreement (and from time to time thereafter upon the expiration or invalidity of the certificate or any of the IRS forms described below, upon the request of the Administrative Loan Party or Agent, or as prescribed by Applicable Law), whichever of the following is applicable:
(i)two duly completed, executed, original copies of IRS Form W-BEN or IRS Form W-8BEN-E (or successor forms), as applicable, establishing eligibility for benefits of an income tax treaty to which the United States is a party or an exemption provided by the Code,
(ii) two duly completed, executed, original copies of IRS Form W-8ECI (or successor forms), establishing that such Recipient is not subject to deduction or withholding of United States Federal income tax,
(iii) in the case of such Recipient claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (A) two duly completed, executed, original copies of IRS Form W-8BEN or IRS Form W-8BEN-E (or successor forms), as applicable, and (B) a certificate certifying that such Recipient is not (1) a “bank” as such term is used in Section 881(c)(3)(A) of the Code, (2) a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of Parent or of a guarantor or (3) a controlled foreign corporation related, directly or indirectly, to Parent within the meaning of Section 864(d)(4) of the Code, or
(iv)in the case of such Recipient not being the beneficial owner, two duly completed, executed, original copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, a certificate as described in clause (iii)(B) immediately above, and/or IRS Form W-9, as applicable from each beneficial owner.
Notwithstanding any other provisions of this paragraph, a Recipient shall not be required to deliver any form pursuant to this Section 2.20(f) (other than the IRS tax forms and related accompanying documentation described in clauses (i) through (iv) above) that such Recipient is not legally able to deliver.
(g)Each Recipient that is a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) shall deliver to the Administrative Loan Party and Agent on or prior to the date on which such Recipient becomes a party to this Agreement (and from time to time thereafter upon the expiration or invalidity of any of the certificates or IRS forms described below, upon the request of the Administrative Loan Party or Agent, or as prescribed by Applicable Law), two duly completed, executed, original copies of IRS Form W-9 certifying that such Lender or Agent, as applicable, is not subject to backup withholding.
(h)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 Administrative Loan Party and Agent at the time or times prescribed by law and at such time or times reasonably requested by the Administrative Loan Party or Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Administrative Loan Party or Agent as may be necessary for Borrowers and 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 paragraph (h), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(i)Each Recipient agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Administrative Loan Party and Agent in writing of its legal inability to do so.
(j)If Agent, the applicable Issuing Bank or a Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by Borrowers or with respect to which Borrowers have paid additional amounts pursuant to this Section 2.20, it shall pay over such refund to Borrowers (but only to the extent of indemnity payments made, or additional amounts paid, by Borrowers under this Section 2.20 with respect to the Taxes giving rise to such refund), net of all out of pocket expenses of Agent, such Issuing Bank or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that Borrowers, upon the request of Agent, the applicable Issuing Bank or such Lender, agrees to repay the amount paid over to Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to Agent, such Issuing Bank or such Lender in the event Agent, such Issuing Bank or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (j), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (j) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party 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 2.20(j) shall not be construed to require Agent, any Issuing Bank or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to Borrowers or any other Person.
SECTION 2.21Assignment of Commitments Under Certain Circumstances; Duty to Mitigate.
(a) In the event (i) any Lender or any Issuing Bank delivers a certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or any Issuing Bank delivers a notice described in Section 2.15, (iii) Borrowers are required to pay any additional amount to any Lender or any Issuing Bank or any Governmental Authority on account of any Lender or any Issuing Bank pursuant to Section 2.20, (iv) any Lender refuses to consent to any amendment, waiver or other modification of any Loan Document requested by Borrowers that requires the consent of a greater percentage of the Lenders than the Required Lenders and such amendment, waiver or other modification is consented to by the Required Lenders or (v) any Lender becomes a Defaulting Lender, then, in each case, Borrowers may, at their sole expense and effort (including with respect to the processing and recordation fee referred to in Section 9.04(b)), upon notice to such Lender or such Issuing Bank, as the case may be, and Agent, require such Lender or such Issuing Bank to transfer and assign, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all of its interests, rights and obligations under this Agreement to an Eligible Assignee that shall assume such assigned obligations and, with respect to clause (iv) above, shall consent to such requested amendment, waiver or other modification of any Loan Documents (which assignee may be another Lender, if a Lender accepts such assignment); provided that (A) such assignment shall not conflict with any law, rule or regulation or order of any court or other Governmental Authority having jurisdiction, (B) Borrowers shall have received the prior written consent of Agent, each Issuing Bank and the Swingline Lender (unless such Person is the Lender being removed pursuant to this Section), which consents shall not unreasonably be withheld or delayed, and (C) Borrowers or such Eligible Assignee shall have paid to the affected Lender or the affected Issuing Bank in immediately available funds an amount equal to the sum of the principal of and interest accrued to the date of such payment on the outstanding Loans or L/C Disbursements of such Lender or such Issuing Bank, respectively, plus all Fees and other amounts accrued for the account of such Lender or such Issuing Bank hereunder with respect thereto (including any amounts under Sections 2.14 and 2.16); provided further that, if prior to any such transfer and assignment the circumstances or event that resulted in such Lender’s or such Issuing Bank’s claim for compensation under Section 2.14, notice under Section 2.15 or the amounts paid pursuant to Section 2.20, as the case may be, cease to cause such Lender or such Issuing Bank to suffer increased costs or reductions in amounts received or receivable or reduction in return on capital, or cease to have the consequences specified in Section 2.15, or cease to result in amounts being payable under Section 2.20, as the case may be (including as a result of any action taken by such Lender or such Issuing Bank pursuant to paragraph (b) below), or if such Lender or such Issuing Bank shall waive its right to claim further compensation under Section 2.14 in respect of such circumstances or event or shall withdraw its notice under Section 2.15 or shall waive its right to further payments under Section 2.20 in respect of such circumstances or event or shall consent to the proposed amendment, waiver, consent or other modification, as the case may be, then such Lender or such Issuing Bank shall not thereafter be required to make any such transfer and assignment hereunder. Each Lender and such Issuing Bank hereby grants to Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender or such Issuing Bank, as the case may be, as assignor, any Assignment and Acceptance necessary to effectuate any assignment of such Lender’s or such Issuing Bank’s interests hereunder in the circumstances contemplated by this Section 2.21(a).
(b)If (i) any Lender or any Issuing Bank shall request compensation under Section 2.14, (ii) any Lender or any Issuing Bank delivers a notice described in Section 2.15 or (iii) Borrowers are required to pay any additional amount to any Lender or any Issuing Bank or any Governmental Authority on account of any Lender or any Issuing Bank, pursuant to Section 2.20, then such Lender or such Issuing Bank shall use reasonable efforts (which shall not require such Lender or such Issuing Bank to incur an unreimbursed loss or unreimbursed cost or expense or otherwise take any action inconsistent with its internal policies or legal or regulatory restrictions or suffer any disadvantage or burden deemed by it to be significant) (x) to file any certificate or document reasonably requested in writing by Borrowers or (y) if agreed to by Borrowers, to assign its rights and delegate and transfer its obligations hereunder to another of its offices, branches or affiliates, if such filing or assignment would reduce its claims for compensation under Section 2.14 or enable it to withdraw its notice pursuant to Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as the case may be, in the future. Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender or any Issuing Bank in connection with any such filing or assignment, delegation and transfer.
SECTION 2.22Swingline Loans.
(a)Swingline Commitment. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, the Swingline Lender agrees to make Swingline Loans to Borrowers at any time and from time to time after the Closing Date and until the earlier of the Revolving Credit Maturity Date and the termination of the Revolving Credit Commitments, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of all Swingline Loans to exceed $10,000,000, in the aggregate or (ii) the Aggregate Revolving Credit Exposure, after giving effect to any Swingline Loan, exceeding the Total Revolving Credit Commitment. Each Swingline Loan (i) shall be made and maintained as a Base Rate Loan and (ii) shall be in a principal amount that is an integral multiple of $100,000 and in a minimum amount of $100,000. The Swingline Commitment may be terminated or reduced from time to time as provided herein. Within the foregoing limits, Borrowers may borrow, pay or prepay and reborrow Swingline Loans hereunder, subject to the terms, conditions and limitations set forth herein. Notwithstanding anything to the contrary contained in this Section 2.22 or elsewhere in this Agreement, (i) the Swingline Lender shall not be obligated to make any Swingline Loan at a time when any Revolving Credit Lender is a Defaulting Lender unless the Swingline Lender has entered into arrangements satisfactory to it and Borrowers to eliminate the Swingline Lender’s risk with respect to any Defaulting Lender’s participation in such Swingline Loans, including by cash collateralizing such Defaulting Lender’s Pro Rata Percentage of the outstanding Swingline Loans, and (ii) the Swingline Lender shall not make any Swingline Loan after it has received written notice from Borrowers, any other Loan Party or the Required Lenders stating that a Default or an Event of Default exists and is continuing until such time as the Swingline Lender shall have received written notice (A) of rescission of all such notices from the party or parties originally delivering such notice or notices or (B) of the waiver of such Default or Event of Default in accordance with Section 9.08(b).
(b)Swingline Loans. The Administrative Loan Party shall notify, by delivery of a Borrowing Request, the Swingline Lender (with a copy to Agent) by email or telephone (promptly confirmed in writing), not later than 11:00 a.m., New York City time, on the day of a proposed Swingline Loan. Such Borrowing Request shall be delivered on a Business Day, shall be irrevocable and shall refer to this Agreement and shall specify the requested date (which shall be a Business Day) and amount of such Swingline Loan and the wire transfer instructions for the account of Borrowers to which the proceeds of the Swingline Loan should be disbursed. The Swingline Lender shall make each Swingline Loan by wire transfer to the account specified in such request.
(c)Prepayment. Borrowers shall have the right at any time and from time to time to prepay any Swingline Loan, in whole or in part, upon giving irrevocable written notice (or telephone notice promptly confirmed by written notice) to the Swingline Lender (with a copy to Agent) before 12:00 p.m., New York City time, on the date of prepayment at the Swingline Lender’s address for notices specified on Schedule 9.01.
(d)Participations. The Swingline Lender may by written notice given to Agent not later than 1:00 p.m., New York City time, on any Business Day, in its sole discretion, require the Revolving Credit Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding; provided that such notice shall be deemed to have been automatically given upon the occurrence of a Default or an Event of Default under paragraph (g) or (h) of Section 7.01 or upon the exercise of any of the remedies provided in the last paragraph of Section 7.01. Such notice shall specify the aggregate amount of Swingline Loans in which Revolving Credit Lenders will participate. Agent will, promptly upon receipt of such notice, give notice to each Revolving Credit Lender, specifying in such notice such Lender’s Pro Rata Percentage of such Swingline Loan or Loans. In furtherance of the foregoing, each Revolving Credit Lender hereby irrevocably, absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to Agent, for the account of the Swingline Lender, such Revolving Credit Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Each Revolving Credit Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Credit Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.02(c) with respect to Loans made by such Lender (and Section 2.02(c) shall apply, mutatis mutandis, to the payment obligations of the Lenders) and Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. Agent shall notify the Administrative Loan Party of any participations in any Swingline Loan acquired pursuant to this paragraph and thereafter payments in respect of such Swingline Loan shall be made to Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from Borrowers (or other Person on behalf of Borrowers) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to Agent and any such amounts received by Agent shall be promptly remitted by Agent to the Lenders that shall have made their payments pursuant to this paragraph and to
the Swingline Lender, as their interests may appear. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve Borrowers (or other Person liable for obligations of Borrowers) of any default in the payment thereof.
(e)Mandatory Borrowings. The Swingline Lender may by written notice given to Agent not later than 1:00 p.m., New York City time, on any Business Day, in its sole discretion, require that the Swingline Lender’s outstanding Swingline Loans shall be funded with one or more Borrowings of Revolving Loans; provided that such notice shall be deemed to have been automatically given upon the occurrence of a Default or an Event of Default under paragraph (g) or (h) of Section 7.01 or upon the exercise of any of the remedies provided in the last paragraph of Section 7.01, in which case one or more Borrowings of Revolving Loans constituting Base Rate Loans (each such Borrowing, a “Mandatory Borrowing”) shall be made on the immediately succeeding Business Day by all Revolving Credit Lenders based on their Pro Rata Percentage and the proceeds thereof shall be applied directly by Agent to repay the Swingline Lender for such outstanding Swingline Loans. Each Revolving Credit Lender hereby irrevocably, absolutely and unconditionally, agrees to make Revolving Loans upon one Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the Swingline Lender. Each Revolving Credit Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.02(c) with respect to Loans made by such Lender (and Section 2.02(c) shall apply, mutatis mutandis, to the payment obligations of the Lenders) and Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. Agent shall notify the Administrative Loan Party of any Mandatory Borrowing made pursuant to this paragraph. Any amounts received by the Swingline Lender from Borrowers (or other Person on behalf of Borrowers) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a Mandatory Borrowing shall be promptly remitted to Agent and any such amounts received by Agent shall be promptly remitted by Agent to the Revolving Credit Lenders that shall have funded their obligations pursuant to this paragraph and to the Swingline Lender, as their interests may appear. The refinancing of a Swingline Loan with a Mandatory Borrowing pursuant to this paragraph shall not relieve Borrowers (or other Person liable for obligations of Borrowers) of any default in the payment of such Mandatory Borrowing. Mandatory Borrowings shall be made upon the notice specified in above, with Borrowers irrevocably agreeing, by the incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as set forth in this Section 2.22(e).
(f)Defaulting Lenders. Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, in the event the Swingline Lender notifies Agent and the Administrative Loan Party that a Lender has not funded its participation pursuant to Section 2.22(d) or its pro rata share of a Mandatory Borrowing pursuant to Section 2.22(e), Borrowers shall, upon demand by the Swingline Lender, pay to Agent for the account of the Swingline Lender an amount equal to such Defaulting Lender’s unfunded participation or Pro Rata Percentage of the Loans required to be made pursuant to such Mandatory Borrowing, as the case may be, which amount shall be applied by Agent solely to reduce the aggregate principal amount of outstanding Swingline Loans; provided that no such payment by Borrowers shall change the status of a Defaulting Lender as such, or otherwise limit, reduce or qualify the
obligations of any Lender with respect to its obligations under this Agreement or the other Loan Documents including without limitation to fund its Pro Rata Percentage of participations required by Section 2.22(d) or Loans made pursuant to a Mandatory Borrowing, in each case, after giving effect to any payments made by Borrowers pursuant to the terms of this sentence.
SECTION 2.23Letters of Credit.
(a) General. Borrowers may request the issuance of a Letter of Credit for its own account or for the account of any Loan Party (in which case Borrowers and such Loan Party shall be co-applicants with respect to such Letter of Credit), in form and substance reasonably acceptable to Agent and the applicable Issuing Bank, at any time and from time to time while the L/C Commitment remains in effect as set forth in Section 2.09(a); provided that all Letters of Credit shall be denominated in Dollars. This Section 2.23 shall not be construed to impose an obligation upon any Issuing Bank to issue any Letter of Credit that is inconsistent with the terms and conditions of this Agreement. Notwithstanding anything to the contrary contained in this Section 2.23 or elsewhere in this Agreement, in the event that a Revolving Credit Lender is a Defaulting Lender, no Issuing Bank shall be required to issue any Letter of Credit unless such Issuing Bank has entered into arrangements satisfactory to it and Borrowers to eliminate the Issuing Bank’s risk with respect to the participation in Letters of Credit by such Defaulting Lender, including by (i) reallocating all or any part of such Defaulting Lender’s participation in Letters of Credit among the Non-Defaulting Lenders in accordance with Section 2.23(j) and/or (ii) Cash Collateralizing such Defaulting Lender’s Pro Rata Percentage of each L/C Disbursement in accordance with Section 2.23(k).
(b)Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. In order to request the issuance of a Letter of Credit (or to amend, renew or extend an existing Letter of Credit), Borrowers shall deliver in writing the applicable Issuing Bank and Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, the date of issuance, amendment, renewal or extension, the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) below), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare such Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if, and upon issuance, amendment, renewal or extension of each Letter of Credit, Borrowers shall be deemed to represent and warrant that, after giving effect to such issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed $10,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not exceed the Total Revolving Credit Commitment.
(c)Expiration Date. Each Letter of Credit shall expire at the close of business on the earlier of the date one year after the date of the issuance of such Letter of Credit and the date that is five Business Days prior to the Revolving Credit Maturity Date, unless such Letter of Credit expires by its terms on an earlier date; provided, however, that a Letter of Credit may, upon the request of Borrowers, include a provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of 12 months or less (but not beyond
the date that is five Business Days prior to the Revolving Credit Maturity Date (unless cash collateralized or backstopped pursuant to arrangements reasonably satisfactory to the applicable Issuing Bank)) unless the applicable Issuing Bank notifies the beneficiary thereof at least 30 days (or such longer period as may be specified in such Letter of Credit) prior to the then-applicable expiration date that such Letter of Credit will not be renewed.
(d)Participations. By the issuance of a Letter of Credit and without any further action on the part of the applicable Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Revolving Credit Lender, and each such Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Pro Rata Percentage of the aggregate amount available to be drawn under such Letter of Credit, effective upon the issuance of such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay to Agent, for the account of the applicable Issuing Bank, such Lender’s Pro Rata Percentage of each L/C Disbursement made by such Issuing Bank and not reimbursed by Borrowers (or, if applicable, another party pursuant to its obligations under any other Loan Document) forthwith on the date due as provided in Section 2.02(f). Each Revolving Credit Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph (d) in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e)Reimbursement. If any Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit, Borrowers shall pay to Agent an amount equal to such L/C Disbursement, not later than 12:00 p.m., New York City time, on the immediately following Business Day.
(f)Obligations Absolute. Borrowers’ obligations to reimburse L/C Disbursements as provided in paragraph (e) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under any and all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right that Borrowers, any other Person Guaranteeing, or otherwise obligated with, Borrowers, any Subsidiary or other Affiliate thereof or any other Person may at any time have against the beneficiary under any Letter of Credit, the applicable Issuing Bank, Agent or any Lender or any other Person, whether in connection with this Agreement, any other Loan Document or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the applicable Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not strictly comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the applicable Issuing Bank, the Lenders, Agent or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.23, constitute a legal or equitable discharge of Borrowers’ obligations hereunder.
Without limiting the generality of the foregoing, it is expressly understood and agreed that the absolute and unconditional obligations of Borrowers hereunder to reimburse L/C Disbursements will not be excused by the gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision) of the applicable Issuing Bank. However, the foregoing shall not be construed to excuse such Issuing Bank from liability to Borrowers to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are waived by Borrowers to the extent permitted by Applicable Law) suffered by Borrowers that are caused by such Issuing Bank’s (or its Related Parties’) gross negligence, bad faith or willful misconduct as determined in a final and non- appealable judgment by a court of competent jurisdiction when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.
It is further understood and agreed that the applicable Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit issued by such Issuing Bank, (A) such Issuing Bank’s exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever, and (B) any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute gross negligence or willful misconduct of such Issuing Bank (unless otherwise determined by a court of competent jurisdiction in a final and non-appealable decision).
(g)Disbursement Procedures. The applicable Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. Such Issuing Bank shall, as promptly as possible, give telephonic notification (confirmed in writing) to Agent and the Administrative Loan Party of such demand for payment and whether such Issuing Bank has made or will make an L/C
Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve Borrowers of its obligation to reimburse such Issuing Bank and the Revolving Credit Lenders with respect to any such L/C Disbursement.
(h)Interim Interest. If any Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit issued by such Issuing Bank, then, unless Borrowers shall reimburse such L/C Disbursement in full on such date, the unpaid amount thereof shall bear interest for the account of such Issuing Bank, for each day from and including the date of such L/C Disbursement, to but excluding the earlier of the date of payment by Borrowers or the date on which interest shall commence to accrue thereon as provided in Section 2.02(f), at the rate per annum then applicable to Base Rate Revolving Loans.
(i)Resignation or Removal of an Issuing Bank. Any Issuing Bank (other than any Issuing Bank which is also Agent, unless such Issuing Bank is resigning as Agent pursuant to Article VIII) may resign at any time by giving 30 days’ prior written notice to Agent, the Lenders and the Administrative Loan Party. Upon the acceptance of any appointment as an Issuing Bank hereunder by a Lender with the consent of the Administrative Loan Party and Agent (in each case not to be unreasonably withheld or delayed) that shall agree to serve as a successor Issuing Bank, such successor shall succeed to and become vested with all the interests, rights and obligations of such retiring Issuing Bank. At the time such resignation shall become effective, Borrowers shall pay all accrued and unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any appointment as an Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement entered into by such successor, in a form reasonably satisfactory to the Administrative Loan Party and Agent, and, from and after the effective date of such agreement, (i) such successor Lender shall have all the rights and obligations of such previous Issuing Bank under this Agreement and the other Loan Documents and (ii) references herein and in the other Loan Documents to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the resignation of an Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation, but shall not be required to issue additional Letters of Credit.
(j)Reallocation of Participations to Reduce Fronting Exposure. All or any part of any Defaulting Lender’s participation in Letters of Credit shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Pro Rata Percentages (calculated without regard to such Defaulting Lender’s Revolving Credit Commitment) but only to the extent that (i) the conditions set forth in Section 4.01 are satisfied at the time of such reallocation (and, unless Borrowers shall have otherwise notified Agent at such time, Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (ii) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation. If the reallocation described in this Section 2.23(j) cannot, or can only partially, be effected, Borrowers shall, without prejudice to any right or remedy available to it hereunder or under law, Cash Collateralize each Issuing Bank’s Fronting Exposure in accordance with the procedures set forth in Section 2.23(k).
(k)Cash Collateralization.
(i)Defaulting Lenders. At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of Agent or any Issuing Bank (with a copy to Agent), Borrowers shall Cash Collateralize each Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.23(j) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.
(ii)Event of Default. If any Event of Default shall occur and be continuing, Borrowers shall (subject to the last sentence of clause (v) of this Section 2.23(k)), on the Business Day it receives notice from Agent or the Required Lenders, Cash Collateralize the L/C Exposure in an amount in cash equal to 102% of the L/C Exposure as of such date; provided that the obligation to Cash Collateralize shall become effective immediately, and such Cash Collateral will become immediately payable in immediately available funds, without demand or notice of any kind, upon the occurrence of an Event of Default described in Section 7.01(g) or 7.01(h).
(iii)Grant of Security Interest. Borrowers hereby grant to Agent, for the benefit of the Issuing Banks and the Lenders, and agree to maintain, a first priority security interest in all such Cash Collateral as security for (A) Borrowers’ obligation to reimburse Agent pursuant to Section 2.23(e) and/or the Defaulting Lenders’ obligation to fund participations in respect of Letters of Credit and/or (B) Borrowers’ other Obligations, in each case to be applied pursuant to clause (iv) below. If at any time Agent determines that Cash Collateral is subject to any right or claim of any Person other than Agent and the Issuing Banks as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, Borrowers will (subject to the last sentence of clause (v) of this Section 2.23(k)), promptly upon demand by Agent, pay or provide to Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency.
(iv)Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.23 in respect of Letters of Credit shall be applied (A) to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of Letters of Credit for which the Cash Collateral was so provided and (B) as set forth in clause (ii) above in connection with an Event of Default, in each case, prior to any other application of such property as may otherwise be provided for herein. Other than any interest earned on the investment of Cash Collateral in Permitted Investments, which investments shall be made at the option and sole discretion of Agent, Cash Collateral deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account and shall be treated for all purposes as additional Cash Collateral. Such deposits shall (x)
automatically be applied by Agent to reimburse the Issuing Banks for L/C Disbursements for which they have not been reimbursed and (y) if the maturity of the Loans has been accelerated, be applied to satisfy the Obligations.
(v)Termination of Requirement. If Borrowers are required to provide Cash Collateral hereunder as a result of a Defaulting Lender, Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.23(k) following (x) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (y) the determination by Agent and the Issuing Banks that there exists excess Cash Collateral; provided that Borrowers and the Issuing Banks may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations; provided further that such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents. If Borrowers are required to provide Cash Collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to Borrowers within three Business Days after all Events of Default have been cured or waived.
SECTION 2.24Increase in Total Revolving Credit Commitments.
(a)Subject to Section 2.24(d) below, Administrative Borrower may, at any time, deliver a written request to Agent to increase the Total Revolving Credit Commitments; provided that, (i) any such increase shall be subject to each of the conditions set forth in Section 2.24(c), (ii) any such written request shall specify the amount of the increase in the Total Revolving Credit Commitments that Administrative Borrower is requesting; (iii) the aggregate amount of any and all such increases in the Total Revolving Credit Commitments shall not exceed $10,000,000 or cause the Total Revolving Credit Commitments to exceed $40,000,000, (iv) the amount of each increase in the Total Revolving Credit Commitments shall not be less than $5,000,000, (v) such requests may not be made more than two (2) times during the term of the Agreement, and (vi) any such request shall be irrevocable.
(b)Upon the receipt by Agent of any such written request, Agent shall notify each of the Lenders of such request and each Lender (other than Defaulting Lenders) shall have the option (but not the obligation) to increase the amount of its Revolver Commitment by an amount approved by Agent in its sole discretion, after consultation with Administrative Borrower, of the amount of the increase in the Total Revolving Credit Commitments requested by Administrative Borrower as set forth in the notice from Agent to such Lender. Each Lender shall notify Agent within ten (10) days after the receipt of such notice from Agent whether it is willing to so increase its Revolving Credit Commitment, and if so, the amount of such increase; provided that, no Lender shall be obligated to provide such increase in its Revolving Credit Commitment and the determination to increase the Revolving Credit Commitment of a Lender shall be within the sole and absolute discretion of such Lender. If the aggregate amount of the increases in the Total Revolving Credit Commitments received from the Lenders does not equal or exceed the amount of the increase in the Total Revolving Credit Commitments requested by Administrative Borrower, Agent or Administrative Borrower may seek additional increases from
Lenders (other than Defaulting Lenders) or Revolving Credit Commitments from such Eligible Assignees as it may determine, after, in the case of Administrative Borrower, consultation with Agent. In the event Lenders (or Lenders and any such Eligible Assignees, as the case may be) have committed in writing to provide increases in their Revolving Credit Commitments or new Revolving Credit Commitments in an aggregate amount in excess of the increase in the Total Revolving Credit Commitments requested by Administrative Borrower or permitted hereunder, Agent shall then have the right to allocate such commitments, first to Lenders and then to Eligible Assignees, in such amounts and manner as Agent may determine, after consultation with Administrative Borrower.
(c)The Total Revolving Credit Commitments shall be increased by the amount of the increase in Revolving Credit Commitments from Lenders or new Commitments from Eligible Assignees, in each case selected in accordance with Section 2.24(b), for which Agent has received written confirmation in from and substance satisfactory to Agent from such Lenders or Eligible Assignees, as applicable, on the date requested by Administrative Borrower for the increase or such other date as Agent and Administrative Borrower may agree (but subject to the satisfaction of the conditions set forth below), whether or not the aggregate amount of the increase in Revolving Credit Commitments and new Revolving Credit Commitments, as the case may be, equal or exceed the amount of the increase in the Total Revolving Credit Commitments requested by Administrative Borrower in accordance with the terms hereof (but in no event shall the Total Revolving Credit Commitments be increased above the amounts described in Section 2.24(a)), effective on the date that each of the following conditions have been satisfied (such date being the “Total Revolving Credit Commitments Increase Effective Date”):
(i)Agent shall have received from each Lender or Eligible Assignee that is providing an additional Revolving Credit Commitment as part of the increase in the Total Revolving Credit Commitments, a written confirmation described above duly executed by such Lender or Eligible Assignee, Agent and Administrative Borrower;
(ii)the conditions precedent to the making of Advances set forth in Sections 4.01(b) and 4.01(c) shall be satisfied as of the date of the increase in the Total Revolving Credit Commitments, both before and immediately after giving effect to such increase whether or not a Loan is then being made;
(iii)upon the request of Agent, Agent shall have received an opinion of counsel to Loan Parties in form and substance and from counsel reasonably satisfactory to Agent addressing such matters as Agent may reasonably request;
(iv)such increase in the Total Revolving Credit Commitments on the date of the effectiveness thereof shall not violate any term or provisions of any Applicable Law, regulation or order or decree of any court or other Governmental Authority and shall not be enjoined, temporarily, preliminarily or permanently; and
(v)there shall have been paid to Agent, for the account of Agent and Lenders (in accordance with any agreement among them) all fees and expenses (including reasonable and documented out-of-pocket fees and expenses of counsel) due and payable
pursuant to any of the Loan Documents on or before the effectiveness of such increase to the extent relating to such increase.
(d)As of a Total Revolving Credit Commitments Increase Effective Date, each reference to the term Total Revolving Credit Commitments herein, and in any of the other Loan Documents shall be deemed amended to mean the amount of the Total Revolving Credit Commitments specified in the written notice from Agent to Administrative Borrower of the increase in the Total Revolving Credit Commitments.
(e)As of the Closing Date, each Loan Party acknowledges, confirms and agrees that Agent and Lenders do not have credit approval to increase the Total Revolving Credit Commitments as in effect on the Closing Date and the terms and provisions of this Section 2.24 shall not constitute or be deemed to constitute a commitment by Agent or any Lender to increase the Total Revolving Credit Commitments as in effect on the Closing Date.
(f)This Section 2.24 shall supersede any provisions in Section 2.17, 2.18 or 9.08 to the contrary.
SECTION 2.25Joint and Several Liability of Borrowers.
(a)Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Lender Group under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations.
(b)Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including any Obligations arising under this Section 2.25), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them.
(c)If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers will make such payment with respect to, or perform, such Obligations.
(d)The Obligations of each Borrower under the provisions of this Section 2.25 constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of the provisions of this Agreement (other than this Section 2.25(d)) or any other circumstances whatsoever.
(e)Except as otherwise expressly provided in this Agreement and the other Loan Documents, each Borrower hereby waives notice of acceptance of its joint and several
liability, notice of any Revolving Loans or Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by Applicable Law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement). Each Borrower hereby waives notice of any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Borrower. So long as any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under this Section 2.25 shall not be discharged except by performance and then only to the extent of such performance. The Obligations of each Borrower under this Section 2.25 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any other Borrower or Agent or Lender.
(f)Each Borrower represents and warrants to Agent and Lenders that such Borrower is currently informed of the financial condition of the other Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Borrower further represents and warrants to Agent and Lenders that such Borrower has read and understands the terms and conditions of the Loan Documents. Each Borrower hereby covenants that such Borrower will continue to keep informed of the other Borrowers’ financial condition and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.
(g)The provisions of this Section 2.25 are made for the benefit of Agent, each member of the Lender Group, each Bank Product Provider, and their respective successors and assigns, and may be enforced by it or them from time to time against any or all Borrowers as often as occasion therefor may arise and without requirement on the part of Agent, any member of the Lender Group, any Bank Product Provider, or any of their respective successors or assigns first to marshal any of its or their claims or to exercise any of its or their rights against any Borrower or to exhaust any remedies available to it or them against any Borrower or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy. The provisions of this Section 2.25 shall remain in effect until all of the Obligations shall have been paid in full, in each case, in accordance with the express terms of this Agreement. If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 2.25 will forthwith be reinstated in effect, as though such payment had not been made.
(h)Each Borrower hereby agrees that it will not enforce any of its rights of contribution or subrogation against any other Borrower with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to Agent or Lenders with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations have been paid in full, in each case, in accordance with the terms of this Agreement. Any claim which any Borrower may have against any other Borrower with respect to any payments to Agent or any member of the Lender Group hereunder or under any of the Bank Product Agreements are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Borrower therefor.
(i)Each Borrower hereby agrees that after the occurrence and during the continuance of any Default or Event of Default, such Borrower will not demand, sue for or otherwise attempt to collect any indebtedness of any other Borrower owing to such Borrower until the Obligations shall have been paid in full in cash. If, notwithstanding the foregoing sentence, such Borrower shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Borrower as trustee for Agent, and such Borrower shall deliver any such amounts to Agent for application to the Obligations in accordance with the terms of this Agreement.
(j)Each Borrower hereby agrees that, to the extent any Borrower shall have paid more than its proportionate share of any payment made hereunder, such Borrower shall be entitled to seek and receive contribution from and against any other Borrower hereunder which has not paid its proportionate share of such payment, in an amount not to exceed the highest amount that would be valid and enforceable and not subordinated to the claims of other creditors as determined in any action or proceeding involving any state corporate, limited partnership or limited liability law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally. Each such Borrower’s right of contribution shall be subject to the terms and conditions of clauses (h) and (i) of this Section 2.25. The provisions of this clause (j) shall in no respect limit the obligations and liabilities of any Borrower to the Agent or any member of the Lender Group, and each Borrower shall remain liable to the Agent and the Lender Group for the full amount such Borrower agreed to repay hereunder.
SECTION 2.26Defaulting Lenders.
(a)Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Revolving Credit Lender becomes a Defaulting Lender, then, until such time as such Revolving Credit Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:
(i)Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders”.
(ii)Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by Agent for the account of any Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by Agent from a Defaulting Lender pursuant to Section 9.06 shall be applied at such time or times as may be determined by Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to Agent hereunder; second, to the payment of any amounts owing by such Defaulting Lender to the Swingline Lender and any Issuing Bank hereunder; third, to Cash Collateralize each Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.23(k); fourth, as the Administrative Loan Party may request (so long as no Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by Agent; fifth, if so determined by Agent and the Administrative Loan Party, to be held in a deposit account and released pro rata in order to (A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (B) Cash Collateralize each Issuing Bank’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.23(k); sixth, to the payment of any amounts owing to the Lenders or the Issuing Banks as a result of any judgment of a court of competent jurisdiction obtained by any Lender or any Issuing Bank against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Event of Default exists, to the payment of any amounts owing to Borrowers as a result of any judgment of a court of competent jurisdiction obtained by Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (1) such payment is a payment of the principal amount of any Loans or L/C Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (2) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.01 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Letters of Credit are held by the Revolving Credit Lenders pro rata in accordance with the Revolving Credit Commitments without giving effect to Section 2.23(j). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.26 shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain Fees. (A) No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Revolving Credit Lender is a Defaulting Lender (and Borrowers shall not be required to pay any such Commitment Fee that otherwise would have been required to have been paid to that Defaulting Lender).
(A)Each Defaulting Lender shall be entitled to receive L/C Participation Fees for any period during which that Revolving Credit Lender is a Defaulting Lender only to the extent allocable to its Pro Rata Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral.
(B) With respect to any fees not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, Borrowers shall (1) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in Letters of Credit that has been reallocated to such Non-Defaulting Lender pursuant to Section 2.23(j), (2) pay to each applicable Issuing Bank the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (3) not be required to pay the remaining amount of any such fee.
(b)Defaulting Lender Cure. If the Administrative Loan Party, Agent and each Issuing Bank agree in writing that a Revolving Credit Lender is no longer a Defaulting Lender, 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 (which may include arrangements with respect to any Cash Collateral), that Revolving Credit Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Revolving Credit Lenders or take such other actions as Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit to be held pro rata by the Revolving Credit Lenders in accordance with the Revolving Credit Commitments (without giving effect to Section 2.23(j)), whereupon such Revolving Credit Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to actions taken by the Required Lenders (including approval of amendments, waivers and similar actions) and fees accrued or payments made by or on behalf of Borrowers while that Revolving Credit Lender was a Defaulting Lender; provided further that except to the extent otherwise expressly agreed by the affected parties, or as expressly provided herein with respect to Bail-In Actions and related matters, no change hereunder from Defaulting Lender 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.
SECTION 2.27Inability to Determine Rates Generally. Subject to Section 2.28, if, on or prior to the first day of any Interest Period for any Term SOFR Loan (a) the Agent determines (which determination shall be conclusive and binding absent manifest error) that “Adjusted Term SOFR” cannot be determined pursuant to the definition thereof, or (b) the Required Lenders determine that for any reason in connection with any request for a Term SOFR Loan or a conversion thereto or a continuation thereof that Adjusted Term SOFR for any requested Interest Period does not adequately and fairly reflect the cost to such Lenders of funding such Loan, and the Required Lenders have provided notice of such determination to the Agent, the Agent will promptly so notify the Administrative Loan Party and each Lender. Upon such notice, any obligation of the Lenders to make Term SOFR Loans, and any right of the Borrowers to continue Term SOFR Loans or to convert Base Rate Loans to Term SOFR Loans, shall be suspended (to the extent of the affected Term SOFR Loans or affected Interest Periods) until the Agent (with respect to clause (b), at the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, (i) the Administrative Loan Party may revoke any pending request for a borrowing of, conversion to or continuation of Term SOFR Loans (to the extent of the affected Term SOFR Loans or affected Interest Periods) or, failing that, the Borrowers will be deemed to have converted any such request into a request for a Borrowing of or conversion to Base Rate Loans in the amount specified therein and (ii) any outstanding affected Term SOFR Loans will be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period. Upon any such conversion, the Borrowers shall also pay accrued interest on the amount so converted, together with any additional amounts required pursuant to Section 2.29. Subject to Section 2.28, if the Agent determines (which determination shall be conclusive and binding absent manifest error) that “Adjusted Term SOFR” cannot be determined pursuant to the definition thereof on any given day, the interest rate on Base Rate Loans shall be determined by the Agent without reference to clause (c) of the definition of “Base Rate” until the Agent revokes such determination.
SECTION 2.28Benchmark Replacement Setting; Conforming Changes.
(a) Benchmark Replacement.
(i) Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (a) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (b) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.
(ii) No Hedging Agreement shall be deemed to be a “Loan Document” for purposes of this Section 2.28).
(b) Conforming Changes. In connection with the use or administration of Term SOFR, or the use, administration, adoption or implementation of a Benchmark Replacement, the Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(c) Notices; Standards for Decisions and Determinations. The Agent will promptly notify the Administrative Loan Party and the Lenders of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Conforming Changes. The Agent will notify the Administrative Loan Party of (x) the removal or reinstatement of any tenor of a Benchmark pursuant to Section 2.28(d) and (y) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.28, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.28.
(d) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then the Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.
(e) Benchmark Unavailability Period. Upon the Administrative Loan Party's receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of Term SOFR Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrowers will be deemed to have converted any such request into a request for a Borrowing of or conversion to Base Rate Loans. During a Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of Base Rate.
SECTION 2.29Funding Losses. In the event of (a) the payment of any principal of any Term SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (b) the continuation, conversion of any Term SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (c) the failure to borrow, convert, continue or prepay any Term
SOFR Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Term SOFR Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrowers pursuant to Section 2.03, then, in any such event, the Borrowers shall compensate each Lender for any loss, cost and expense attributable to such event, including any loss, cost or expense arising from the liquidation or redeployment of funds or from any fees payable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to Agent, each Issuing Bank and each of the Lenders, on the Closing Date (giving effect to the Transactions to occur on such date) and on the date of each Credit Event (giving effect to the use of proceeds of such Credit Event), that:
SECTION 3.01Organization; Powers. (a) Each Loan Party and each Subsidiary (other than each Immaterial Subsidiary) is duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, (b) each Loan Party and each Subsidiary (other than each Immaterial Subsidiary) has all requisite power and authority and all material requisite governmental licenses, authorizations, consents and approvals to own its property and assets and to carry on its business as now conducted and as proposed to be conducted, (c) each Loan Party and each Subsidiary is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where the failure so to qualify could not reasonably be expected to result in a Material Adverse Effect, (d) each Loan Party and each Subsidiary has the power and authority to execute, deliver and perform its obligations under each of the Loan Documents and each other agreement or instrument contemplated thereby to which it is or will be a party and, in the case of Borrowers, to borrow hereunder and (e) no Loan Party is an Affected Financial Institution.
SECTION 3.02Authorization. The Transactions (a) have been duly authorized by all requisite corporate, partnership, limited liability company, and, if required, stockholder, partner or member action, as applicable, of each Loan Party and each Subsidiary, (b) will not (i) violate (A) any provision of law, statute, rule or regulation, (B) any order of or undertaking with any Governmental Authority or (C) any provision of any indenture, agreement or other instrument to which any Loan Party or any Subsidiary is a party or by which any of them or any of their property is bound, except such violation as could not reasonably be expected to have a Material Adverse Effect, (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under, or give rise to any right to accelerate or to require the prepayment, repurchase or redemption of any obligation under any such indenture, agreement or other instrument, except where the consequences thereof could not reasonably be expected to have a Material Adverse Effect, or (iii) result in the creation or imposition of (or the obligation to create or impose) any Lien upon or with respect to any property or assets now owned or hereafter acquired by any Loan Party or any Subsidiary (other than the Liens created hereunder and under the Security Documents), (c) will not violate any provision of the certificate or articles of incorporation or certificate of formation or other constitutive documents
or by-laws, partnership agreement or limited liability company agreement of any Loan Party or any Subsidiary, and (d) will not require the consent of any party to a Material Contract except those consents (i) which have been duly obtained, made or complied with prior to the Closing Date and which are in full force and effect or (ii) which the failure to obtain could not reasonably be expected to have a Material Adverse Effect.
SECTION 3.03Enforceability. Each Loan Document has been duly executed and delivered by each Loan Party, and constitutes a legal, valid and binding obligation of each such Loan Party enforceable against each such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.04Governmental Approvals. The Transactions do not require any consent or approval of, registration or filing with, certificate, certification, permit, license or authorization from, or any other action by any Governmental Authority, in each case, except for (a) the filing of Uniform Commercial Code financing statements and filings with the United States Patent and Trademark Office and (if applicable) the United States Copyright Office, (b) any other required filings in respect of any Collateral and (c) such as have been made or obtained and are in full force and effect.
SECTION 3.05Financial Statements; Projections.
(a)Reference is made to the consolidated balance sheets and related consolidated statements of income, cash flows and stockholder’s equity of Parent and its consolidated Subsidiaries as of and for the fiscal year ended December 31, 2023, and the report thereon of Grant Thornton LLP, and (y) as of and for the fiscal quarters ended March 31, 2024 and June 30, 2024. Such financial statements present fairly in all material respects the consolidated financial condition and results of operations and cash flows of Parent and its consolidated Subsidiaries as of such dates and for such periods. Such balance sheets and the notes thereto disclose all material liabilities, direct or contingent, of Parent and its consolidated Subsidiaries, as of the dates thereof to the extent required to be disclosed by GAAP. Such financial statements were prepared in accordance with GAAP applied on a consistent basis except as otherwise noted therein subject, in the case of unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes.
(b)Reference is made to the forecasts of financial performance of Loan Parties for the fiscal year 2025 (the “Projections”) delivered by Loan Parties to Agent. Loan Parties represent that the Projections were prepared in good faith based upon assumptions believed by management of Loan Parties to be reasonable at the time delivered, it being understood and acknowledged that the Projections are as to future events and are not to be viewed as facts, are subject significant uncertainties and contingencies, many of which are beyond Loan Parties’ control, that no assurances can be given that such projected results will be realized and that actual results during the period or periods covered thereby may differ significantly from the projected results and such differences may be material.
SECTION 3.06No Material Adverse Change. Since December 31, 2023, there has been no change in the business, assets, liabilities, operations or condition (financial or otherwise) of any Loan Party or any Subsidiary that has had, or could reasonably be expected to have, a Material Adverse Effect.
SECTION 3.07Title to Properties; etc. Each Loan Party and each Subsidiary has good and valid title to, or valid leasehold interests in, or valid license to use, all its material properties and assets (including all material Real Property but excluding Loan Party Intellectual Property which is addressed in Section 3.24), in each case, except for minor defects that, individually or in the aggregate, do not interfere with its ability to conduct its business as currently conducted or to utilize such properties and assets for their intended purposes. All such material properties and assets are free and clear of all Liens except for Permitted Liens.
SECTION 3.08Subsidiaries. (a) Schedule 3.08(a) sets forth, as of the Closing Date, a list of (i) each Loan Party and each Subsidiary and its jurisdiction of incorporation or organization as of the Closing Date and (ii) all Subsidiaries and the direct or indirect percentage ownership interest of Loan Party therein. The shares of capital stock or other ownership interests so indicated on Schedule 3.08(a) are duly and validly issued and fully paid and non-assessable and are owned by Loan Parties or the respective Subsidiary thereof as indicated on such Schedule 3.08(a) (other than with respect to Subsidiaries that have been sold or otherwise disposed of in accordance with Section 6.05), directly or indirectly, free and clear of all Liens (other than (A) Liens created under the Security Documents, (B) in the case of shares of capital stock or other ownership interests constituting Collateral, any Permitted Liens that arise by operation of applicable legal requirements and are not voluntarily granted and (C) in all other cases, any Permitted Liens).
(c)Schedule 3.08(b) sets forth, as of the Closing Date, (i) a list of the Immaterial Subsidiaries and (ii) for each such Immaterial Subsidiary, the total assets and gross revenues of such Immaterial Subsidiary as of, and for the twelve month period ended on, June 30, 2024 and the percentage that such total assets and gross revenues represent in relation to the Consolidated Total Assets and gross revenues of Loan Parties and each Subsidiary as of, and for the twelve month period ended on, such date.
SECTION 3.09Litigation; Compliance with Laws.
(a) Except as set forth on Schedule 3.09(a), there are no actions, suits or proceedings at law or in equity by or before any Governmental Authority now pending or, to the knowledge of Loan Parties, threatened against any Loan Party or any Subsidiary or any business, property or rights of any such Person (i) that involve any Loan Document, or the Transactions or (ii) as to which there is a reasonable possibility of an adverse result that could reasonably be expected to result in a Material Adverse Effect.
(b)No Loan Party or Subsidiary is in violation of any law, rule or regulation (including all applicable Environmental Laws), or is in default with respect to any judgment, writ, injunction, decree or order of or undertaking with any Governmental Authority, where such violation or default could reasonably be expected to result in a Material Adverse Effect. Except
as could not reasonably be expected to result in a Material Adverse Effect, (i) no Inventory has been produced in violation of the FLSA, (ii) no Loan Party’s or Subsidiary’s past or present operations, real estate or other properties are subject to any federal, state or local investigation to determine whether any remedial action is needed to address any environmental pollution, hazardous material or environmental clean-up, (iii) no Loan Party or Subsidiary has received any Environmental Notice, and (iv) no Loan Party or Subsidiary has any contingent liability with respect to any Environmental Release, environmental pollution or hazardous material on any real property now or previously owned, leased or operated by it.
SECTION 3.10Agreements. No Loan Party or Subsidiary is in default in any manner under any provision of any indenture or other agreement or instrument evidencing Indebtedness, or any other agreement or instrument to which it is a party or by which it or any of its properties or assets are or may be bound, where such default could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11Federal Reserve Regulations. No Loan Party or Subsidiary is engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock (within the meaning of Regulation U), or extending credit for the purpose of purchasing or carrying Margin Stock and no proceeds of any Borrowings or drawings under any Letter of Credit will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry, or to reduce or refinance any Indebtedness incurred to purchase or carry, any Margin Stock or for any purpose that entails a violation of, or that is inconsistent with, the provisions of Regulation T, U or X. As of the Closing Date, no Loan Party or any Subsidiary owns Margin Stock. If at any time a Loan Party or a Subsidiary owns any Margin Stock, Loan Parties shall promptly notify Agent and, if requested by Agent, Loan Parties will furnish to Agent and each Lender a statement in conformity with the requirements of FR Form G 3 or FR Form U 1, as applicable, referred to in Regulation U. At the time of each Credit Event, not more than 25% of the value of the assets of Loan Parties and their Subsidiaries taken as a whole (including all capital stock of Loan Parties held in treasury) will constitute Margin Stock.
SECTION 3.12Investment Company Act; etc. No Loan Party or Subsidiary is (a) an “investment company” or a company “controlled” by an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended, or (b) subject to regulation under any requirement of law (other than Regulation X) that limits its ability to incur, create, assume or permit to exist Indebtedness or grant any Guarantee in respect of Indebtedness.
SECTION 3.13Use of Proceeds. Borrowers will use the proceeds of the Loans and will request the issuance of Letters of Credit only for the purposes specified in Section 5.08.
SECTION 3.14Tax Matters. Except as could not reasonably be expected to have a Material Adverse Effect, each Loan Party and each Subsidiary has timely filed or caused to be timely filed all Federal, state local and foreign tax returns required to have been filed by it and all such tax returns are true and correct and has duly paid or caused to be duly paid all taxes (whether or not shown on any tax return) due and payable by it and all assessments received by
it, except taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary shall have set aside on its books adequate reserves in accordance with GAAP.
SECTION 3.15No Material Misstatements. No written information, report, financial statement, exhibit or schedule furnished by or on behalf of Loan Parties to Agent or any Lender with respect to Loan Parties and Subsidiaries in connection with the negotiation of this Agreement or any other Loan Document or included therein or delivered pursuant thereto (as modified or supplemented by other information so furnished), taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were or are made, not misleading. With respect to projected financial information, pro forma financial information, budgets, estimates and other forward- looking information, Loan Parties represent that such information was prepared in good faith based upon assumptions believed by management of Loan Parties to be reasonable at the time delivered, it being understood and acknowledged that such projected financial information, pro forma financial information, budgets, estimates and other forward-looking information are as to future events and are not to be viewed as facts, are subject significant uncertainties and contingencies, many of which are beyond Loan Parties’ control, that no assurances can be given that such projected results will be realized and that actual results during the period or periods covered thereby may differ significantly from the projected results and such differences may be material.
SECTION 3.16Plans.
(a) Loan Parties, each Subsidiary and each of their respective ERISA Affiliates are in compliance with the applicable provisions of ERISA with respect to all Plans, other than noncompliance which could not reasonably be expected to result in a Material Adverse Effect. Each Plan complies, and is operated and maintained in compliance, with all applicable legal requirements, including all applicable provisions of ERISA and the Code, other than any such noncompliance which could not reasonably be expected to result in a Material Adverse Effect. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination (or, if such Plan uses a prototype or volume submitter plan document has received a favorable opinion or advisory) from the Internal Revenue Service that the form meets the tax qualification requirements and nothing has occurred which could reasonably be expected to prevent, or reasonably be expected to cause the loss of, such qualification.
(b)No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could reasonably be expected to result in a Material Adverse Effect. Within the last six years, no Plan has been terminated, whether or not in a “standard termination” as that term is used in Section 4041 of ERISA, nor has any Plan (determined at any time within the last six years) with an Unfunded Pension Liability been transferred outside of the “controlled group” (within the meaning of Section 4001(a)(14) of ERISA) of any Loan Party, each Subsidiary or any of their ERISA Affiliates. Using actuarial assumptions and computation methods consistent with subpart I of subtitle E of Title IV of
ERISA, the aggregate liabilities of the any Loan Party, each Subsidiary or any of their ERISA Affiliates to all Multiemployer Plans in the event of a complete withdrawal therefrom, as of the close of the most recent fiscal year of each such Multiemployer Plan, have not resulted in, and could not reasonably be expected to result in, a Material Adverse Effect.
SECTION 3.17Environmental Matters. Except with respect to any matters that could not reasonably be expected to result in a Material Adverse Effect, no Loan Party or any Subsidiary (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, or (iii) is subject to any pending or threatened (in writing) action, suit, claim, investigation, or other judicial or administrative proceeding by any Person under any Environmental Law.
SECTION 3.18Insurance. Schedule 3.18 sets forth a true, complete and correct description of all insurance maintained by Loan Parties and any Subsidiary as of the Closing Date. As of the Closing Date, such insurance is in full force and effect. Loan Parties and Subsidiaries maintain, with financially sound and reputable insurers, such insurance as may customarily be carried or maintained under similar circumstances by Persons of established reputation engaged in similar businesses, in such amounts (giving effect to self-insurance), with such deductibles, covering such risks and otherwise on such terms and conditions as are customary for such Persons.
SECTION 3.19Security Documents.
(a) The Guarantee and Collateral Agreement, upon execution and delivery thereof by the parties thereto, will create in favor of Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in the Guarantee and Collateral Agreement) and (i) when the Pledged Collateral (as defined in the Guarantee and Collateral Agreement) is delivered to Agent together with stock, membership interest powers or other appropriate instruments of transfer duly executed in blank, the Lien created under the Guarantee and Collateral Agreement shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of Loan Parties party thereto in such Pledged Collateral, in each case prior and superior in right to any other Person, and subject only to Permitted Liens that arise by operation of applicable legal requirements and are not voluntarily granted, and (ii) when financing statements in appropriate form are filed in the offices specified on Schedule 3.19(a), the Lien created under the Guarantee and Collateral Agreement will constitute a fully perfected Lien on, and security interest in, all of the right, title and interest of Loan Parties party thereto in such Collateral (other than Loan Party Intellectual Property) to the extent a security interest may be perfected by the filing of a financing statement pursuant to the UCC, in each case prior and superior in right to any other Person, and subject only to Permitted Liens.
(b)Upon the recordation of the Guarantee and Collateral Agreement (or a short-form security agreement in form and substance reasonably satisfactory to the Administrative Loan Party and Agent) with, as and if applicable, the United States Patent and Trademark Office and the United States Copyright Office, together with the financing statements
or such other filings in appropriate form filed in the offices specified on Schedule 3.19(a), the Lien created under the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all of the right, title and interest of Loan Parties party thereto in Loan Party Intellectual Property to the extent a security interest may be perfected by the filing of a financing statement pursuant to the UCC and/or such recordation in, as applicable, the United States Patent and Trademark Office and the United States Copyright Office, in each case prior and superior in right to any other Person, and subject only to Permitted Liens (it being understood that subsequent filings and recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary with respect to U.S. issued Patents and U.S. Patent applications, U.S. Trademark registrations and U.S. trademark applications and U.S. Copyright registrations acquired by the applicable Loan Parties after the date hereof).
SECTION 3.20Locations of Real Property.
(a)