Johnson Outdoors Inc 10-K for FY2025
Johnson Outdoors Inc (JOUT)
10-K
2025-12-12
For: 2025-10-03
View Original
Added on
April 06, 2026
About this 10-K
Johnson Outdoors Inc filed this 10-K on December 12, 2025, covering the fiscal year ended October 3, 2025 (FY2025).
Headline figures
Fiscal year ended October 3, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $592.42M
- down 0.1% from $592.85M a year earlier
- Net loss
- $34.29M
- compared with a net loss of $26.53M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the fiscal year ended October 3 , 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ______ to ______
Commission file number 0-16255
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices, including zip code)
(262 ) 631-6600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Exchange on Which Registered | ||||||
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large Accelerated Filer | ☐ | ||||||||||
| ☒ | |||||||||||
| Non-Accelerated Filer | ☐ | ||||||||||
| Smaller Reporting Company | |||||||||||
| 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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the Registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the Registrant's executive officers during the relevant recovery period pursuant to Section 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 28, 2025, 9,203,034 shares of Class A and 1,206,210 shares of Class B common stock of the registrant were outstanding. The aggregate market value of voting and non-voting common stock of the registrant held by non-affiliates of the registrant was approximately $135,000,000 on March 28, 2025 (the last business day of the registrant’s most recently completed fiscal second quarter) based on approximately 5,464,000 shares of Class A common stock held by non-affiliates as of such date. For purposes of this calculation only, shares of all voting stock are deemed to have a market value of $24.91 per share, the closing price of the Class A common stock as reported on the NASDAQ Global Select MarketSM on March 28, 2025 (the last trading day of the registrant’s most recently completed fiscal second quarter). Shares of common stock held by any executive officer or director of the registrant (including all shares beneficially owned by the Johnson Family, as defined herein) have been excluded from this computation because such persons may be deemed to be affiliates. This determination of affiliate status is not a conclusive determination for other purposes.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the 2026 Annual Meeting of the Shareholders of the Registrant are incorporated by reference into Part III of this report.
As used in this report, the terms “we,” “us,” “our,” “Johnson Outdoors” and the “Company” mean Johnson Outdoors Inc. and its subsidiaries collectively, unless the context indicates another meaning.
| TABLE OF CONTENTS | Page | ||||
F-1 | |||||
Forward Looking Statements
Certain matters discussed in this Form 10-K are “forward-looking statements,” and the Company intends these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of those safe harbor provisions. These statements may be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “confident,” “could,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,” “would” or the negative of those terms or other words of similar meaning. Similarly, statements that describe the Company’s future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results or outcomes to differ materially from those currently anticipated.
Factors that could affect actual results or outcomes include the matters described under the caption “Risk Factors” in Item 1A of this report and the following: changes in economic conditions, consumer confidence levels and discretionary spending patterns in key markets; uncertainties stemming from political instability (and its impact on the economies in jurisdictions where the Company has operations), changes in US trade policies, tariffs, and the reaction of other countries to such changes; the global outbreaks of disease, which may affect market and economic conditions and may have wide-ranging impacts on employees, customers and various aspects of our operations; the Company’s success in implementing its strategic plan, including its targeted sales growth platforms, innovation focus, and its increasing digital presence; litigation costs related to actions of and disputes with third parties, including competitors; the Company’s continued success in working capital management and cost-structure reductions; the Company’s success in integrating strategic acquisitions; the risk of future writedowns of goodwill or other long-lived assets; the ability of the Company's customers to meet payment obligations; the impact of actions of the Company's competitors with respect to product development or enhancement or the introduction of new products into the Company's markets; movements in foreign currencies, interest rates or commodity costs; fluctuations in the prices of raw materials or the availability of raw materials or components used by the Company; any disruptions in the Company's supply
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chain as a result of material fluctuations in the Company's order volumes and requirements for raw materials and other components, or the demand for those same raw materials and components by third parties, necessary to manufacture and produce the Company's products, including related to shortages in procuring necessary raw materials and components to manufacture and produce such products; the success of the Company’s suppliers and customers and the impact of any consolidation in the industries of the Company's suppliers and customers; the ability of the Company to deploy its capital successfully; unanticipated outcomes related to outsourcing certain manufacturing processes; unanticipated outcomes related to litigation matters; and adverse weather conditions. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this filing. The Company assumes no obligation, and disclaims any obligation, to update such forward-looking statements to reflect subsequent events or circumstances.
Trademarks
We have registered the following trademarks, among others, which may be used in this report: Minn Kota®, Cannon®, Humminbird®, Jetboil®, Old Town®, Carlisle® and SCUBAPRO®.
PART I
ITEM 1. BUSINESS
Johnson Outdoors is a leading global manufacturer and marketer of branded seasonal, outdoor recreation products used primarily for fishing from a boat, diving, paddling, hiking and camping. The Company’s portfolio of well-known consumer brands has attained leading market positions due to innovation, marketing excellence, product performance and quality. Company values and culture support innovation in all areas, promoting and leveraging best practices and synergies within and across its subsidiaries to advance the Company’s strategic vision set by executive management and approved by the Board of Directors. The Company is controlled by Helen P. Johnson-Leipold (Chairman and Chief Executive Officer), members of her family and related entities.
The Company was incorporated in Wisconsin in 1987 as successor to various businesses.
Fishing
The Company’s Fishing segment key brands are: Minn Kota electric motors for quiet trolling or primary propulsion, marine battery chargers and shallow water anchors; Humminbird sonar and GPS equipment for fish finding, navigation and marine cartography; and Cannon downriggers for controlled-depth fishing.
Minn Kota trolling motors and shallow water anchors and Cannon downriggers are designed and manufactured primarily at the Company's Mankato, Minnesota facility. Humminbird sonar and GPS equipment are designed and manufactured primarily in Eufaula, Alabama and Alpharetta, Georgia.
Fishing brands and related accessories are sold across the globe, with the majority of sales coming from North America through large outdoor specialty retailers, such as Bass Pro Shops and Scheels; large retail store chains; distributors that service independent marine, sporting goods and internet dealers; and original equipment manufacturers (OEM) of boat brands such as Tracker, Skeeter and Ranger. The Company also sells direct to consumers via its Minn Kota, Humminbird and Cannon websites. Markets outside of North America are accessed through a network of independent international distributors. The Company markets its Fishing brands through several media channels, and is focused on innovation leadership, reliable technology, and quality products.
Camping & Watercraft Recreation
The Company’s Camping & Watercraft segment key brands are: Jetboil portable outdoor cooking systems, Old Town canoes and kayaks, and Carlisle branded paddles.
Jetboil portable outdoor cooking systems, single burner and two burner stoves, and accessories are sold in the U.S. and Canada, primarily to camping and backpacking specialty stores, sporting goods stores, internet retailers, and direct to consumer via the Jetboil brand website. Markets outside of North America are accessed through a network of independent international distributors. Marketing of Jetboil systems is focused on building brand awareness and leadership in product features and innovation, primarily through digital marketing and social media. Jetboil products are designed at the Company’s operating locations in Old Town, Maine, and manufactured by third party sources in Asia.
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The Company designs and markets canoes, kayaks and advanced personal watercraft equipment and products under the Old Town brand name for family recreation, touring and angling. Old Town products are manufactured at the Company’s facility in Old Town, Maine.
Accessory brands, including Carlisle branded paddles, are produced primarily by third party sources located in North America and Asia. The company's personal flotation devices are manufactured by third party sources located in Asia and are sold under the Old Town brand.
The Company’s kayaks, canoes and accessories are sold through multiple channels primarily in the U.S. and Canada with an emphasis on independent specialty dealers and outdoor specialty chain retailers. The Company also sells products direct to consumers via the Old Town website, and internet retailer sites.
Marketing of brands is focused on building brand awareness and leadership in product features and innovation, primarily through digital marketing and social media.
Diving
The Company manufactures and markets underwater diving products for recreational divers, which it sells and distributes under the SCUBAPRO brand name.
The Company markets a complete line of underwater diving and snorkeling equipment, including regulators, buoyancy compensators, dive computers and gauges, wetsuits, masks, fins, snorkels and accessories.
The Company manufactures and assembles buoyancy compensators, regulators, dive computers, gauges, and instruments at its Italian, Indonesian, and South African facilities, and for certain makes or models, from other third party manufacturers. The Company designs and develops diving and snorkeling soft goods, proprietary materials, and other components from third party contract manufacturers.
SCUBAPRO diving equipment is marketed to the premium recreational segment and high-performance technical diving market. Products are sold via select distribution to independent specialty dive stores worldwide. These specialty dive stores generally provide a wide range of services to divers, including regular maintenance, product repair, diving education and travel programs. The Company also sells diving gear direct to consumers via the SCUBAPRO website, internet retailers, and to dive training centers, resorts and public safety units.
The Company markets its equipment via websites, through social media, through information and displays in dive specialty stores, and in diving magazines.
Financial Information for Business Segments
As noted above, the Company has three reportable business segments. See Note 13 to the consolidated financial statements included elsewhere in this report for financial information concerning each business segment.
International Operations
See Note 13 to the consolidated financial statements included elsewhere in this report for financial information regarding the Company’s domestic and international operations. See Note 1, subheading “Foreign Operations and Related Derivative Financial Instruments,” to the consolidated financial statements included elsewhere in this report, along with the information under “Risk Factors” below, for information regarding risks related to the Company’s foreign operations.
Research and Development
The Company commits significant resources to new product research and development in each of its business segments. Fishing conducts its product research, design, engineering and software development activities at its locations in Mankato and Little Falls, Minnesota; Alpharetta, Georgia; Toronto, Canada; and Eufaula, Alabama. Diving maintains research and development facilities in Zurich, Switzerland; Durban, South Africa; and Casarza Ligure, Italy. Research and development activities for Watercraft Recreation products are performed in Old Town, Maine and Racine, Wisconsin. Product research, design and innovation for Camping products are conducted at the Company's Racine, Wisconsin, and Old Town, Maine locations.
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The Company expenses research and development costs as incurred, except for software development for new electronics products and bathymetry data collection and processing. These software development and bathymetry data collection and processing costs are capitalized once technological feasibility is established and then amortized over the expected useful life of the software or database. The amounts expensed by the Company in connection with research and development activities for each of the last three fiscal years are set forth in the Company’s Consolidated Statements of Operations included elsewhere in this report.
Industry and Competitive Environment
The Company believes its products compete favorably on the basis of product innovation, product performance and marketing support and, to a lesser extent, price.
Fishing: Minn Kota’s primary competitors in the electric trolling motors business are Lowrance, owned by Brunswick Corporation, Garmin and Power-Pole. In addition, Power-Pole is Minn Kota's main competitor in the shallow water anchor business. Competition in both businesses is focused on technological innovation, product quality and durability as well as product features and benefits for fishing.
Humminbird’s main competitors in the market for on-boat electronics are Garmin and Lowrance. Competition in this business is primarily focused on the quality of sonar imaging and display, easy to use graphical interfaces as well as the integration of mapping and GPS technology.
Cannon’s main competitors in the downrigger market are Big Jon Sports, Walker and Scotty. Competition in this business primarily focuses on ease of operation, speed and durability.
Camping & Watercraft Recreation: The Company’s portable outdoor cooking systems compete in the specialty and higher end performance backpacking and camping markets. The primary competitor in portable outdoor cooking systems is MSR. Competition in this market is based on product size and weight, ease of use, reliability and performance.
In the Company's kayak and canoe product categories its main competitors are Hobie, Pelican International Inc., Wenonah Canoe, Jackson Kayak and Legacy Paddlesports, each of which competes on the basis of their product’s design, performance, quality and price.
Diving: The main competitors in the Diving segment include Aqua Lung, Suunto, Atomic Aquatics, Oceanic, Cressi and Mares. Competitive advantage in the life support product category of this segment, which consists of regulators, dive computers, and buoyancy compensators, is a function of product innovation, performance, quality and safety. Competition in the general diving product category of fins, masks, snorkels and wetsuits is characterized by low barriers to entry and numerous competitors who compete on the basis of product innovation, performance, quality and price.
Backlog
Unfilled orders for future delivery of products varies as a result of numerous factors impacting the Company (including those described in the section titled “Risk Factors” below) and because of the non-binding nature of such orders, the Company does not believe that backlog information is material to the understanding of its business.
Employees and Human Capital Resources
At October 3, 2025, the Company had approximately 1,300 regular, full-time employees, of which approximately 950 were employed in the United States and approximately 350 were employed outside of the United States. Approximately 50 or 4% were represented by a collective bargaining agreement, all of whom are located at our facilities in Batam, Indonesia. In recent years, we have not experienced any significant work slowdowns, stoppages, or other labor disruptions. The Company considers its employee relations to be excellent. Temporary employees are utilized primarily to manage peaks in the seasonal manufacturing of products. See "Seasonality" below for additional information on the seasonal nature of our business.
The Company remains committed to areas of work place safety, product quality and customer satisfaction. Successful execution of our mission is dependent on attracting, developing and retaining key employees and members of our management team, as well as providing competitive pay and benefits.
Patents, Trademarks and Proprietary Rights
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The Company holds patents for various of the products it sells and regularly files applications for patents. The Company has numerous trademarks and trade names which it considers important to its business, many of which are noted in this report. Historically, the Company has vigorously defended its intellectual property rights and expects to continue to do so.
Supply Chain and Sourcing of Materials
The Company manufactures some products that use parts or materials that, due to geographical distance, limited supplier capacity or availability or competing demands for such parts or materials, are only available in a cost effective manner from a single vendor or require the Company to place orders several months in advance of required delivery.
The Company attempts to mitigate product availability and these supply chain risks when possible through the purchase of safety stock, use of forecast-based supply contracts, and, to a lesser extent, with just in time inventory deliveries or supplier-owned inventory located close to the Company’s manufacturing locations. In doing so, the Company strives to balance the businesses’ need to maintain adequate inventory levels with the cost of holding such inventory by manufacturing to forecast for high volume products, utilizing build-to-order strategies wherever possible, and by having contract-manufactured products delivered to customers directly from the supplier. The Company also seeks to manage its inventory through on-going product design and logistical initiatives with its suppliers to reduce lead times.
Seasonality
The Company’s products in each of its business segments are primarily warm-weather and outdoor recreation-related, which has historically resulted in seasonal variations in sales and profitability for the Company. This seasonal variability was traditionally due to customers’ increasing their inventories in the quarters ending March and June, which is the typical primary selling season for the Company’s outdoor recreation products, with lower inventory volumes during the quarters ending September and December. The Company mitigates the seasonality of its businesses somewhat by encouraging customers to purchase and take delivery of products more evenly through the year. The following table shows, for the past three fiscal years, the total consolidated net sales and operating profit or loss of the Company for each quarter, as a percentage of the total year.
| Fiscal Year | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Quarter Ended | Net Sales | Operating (Profit) Loss | Net Sales | Operating Loss | Net Sales | Operating Profit (Loss) | |||||||||||||||||||||||||||||
| December | 18 | % | 125 | % | 23 | % | 0 | % | 27 | % | 47 | % | |||||||||||||||||||||||
| March | 28 | % | (30) | % | 30 | % | 1 | % | 30 | % | 97 | % | |||||||||||||||||||||||
| June | 31 | % | (45) | % | 29 | % | 1 | % | 28 | % | 149 | % | |||||||||||||||||||||||
| September | 23 | % | 50 | % | 18 | % | 98 | % | 15 | % | (193) | % | |||||||||||||||||||||||
| 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||||||
Environment and Climate Change; Social Responsibility
The Company is subject to various supranational, federal, state and local environmental laws, ordinances, regulations, and other requirements of governmental authorities that relate to the generation, storage, transport, treatment and disposals of materials as a result of our manufacturing and production operations. We believe we comply with such laws and regulations. Expenditures on environmental compliance have not had, and we believe in the future, are not expected to have, a material adverse effect on the Company’s capital expenditures, earnings or competitive position. We do not believe that any direct or indirect consequences of legislation related to climate change will have a material adverse effect on our operating costs, facilities or products. However, risk of environmental liability and charges associated with maintaining compliance with environmental laws is inherent in the nature of the Company’s business and there is no assurance that material liabilities or charges could not arise.
We are committed to conducting business and making decisions honestly, fairly and within the law, and are guided by the values and beliefs embodied in our “Code of Conduct.” We are dedicated to earning and keeping the trust and confidence of our shareholders, customers and associates as well as the communities where we do business. Our “Code of Conduct” provides guidelines and a framework for conducting business in an ethical manner. We have adopted policies that seek to promote integrity, an ethical work environment, valuing diversity and promoting financial integrity and responsibility, while at the same time prohibiting unethical and illegal practices. In addition, we annually compile and file a Form SD with the Securities and Exchange Commission regarding “Conflict Minerals Disclosure and Report” as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The purpose of this report is to help prevent purchasing products used to finance or benefit armed groups in the covered countries of this filing.
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Available Information
The Company maintains a website at www.johnsonoutdoors.com. On its website, the Company makes available, free of charge, its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as soon as reasonably practical after the reports have been electronically filed or furnished to the Securities and Exchange Commission. In addition, the Company makes available on its website, free of charge, its (a) proxy statement for its annual meeting of shareholders; (b) Code of Conduct; (c) Code of Ethics for its Chief Executive Officer and Senior Financial and Accounting Officers; (d) the charters for the following committees of the Board of Directors: Audit; Compensation; Executive; and Nominating and Corporate Governance; and (e) Corporate Governance Guidelines, Insider Trading Policy, Incentive Compensation Recovery Policy, and Stock Ownership Guidelines for directors and executive officers. Except as specifically provided herein, the Company is not including the information contained on or available through its website as a part of, or incorporating such information by reference into, this Annual Report on Form 10-K. This report includes all material information about the Company that is included on the Company’s website and is otherwise required to be included in this report. Copies of any materials the Company files with the Securities and Exchange Commission (SEC) can also be obtained free of charge through the SEC’s website at www.sec.gov. The SEC’s Public Reference Room can be contacted at 100 F Street, N.E., Washington, D.C. 20549, or by calling 1 (800) 732-0330.
ITEM 1A. RISK FACTORS
The risks described below are not the only risks we face. Additional risks that we do not yet know of or that we currently think are immaterial may also impair our future business operations. If any of the events or circumstances described in the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected. In such cases, the trading price of our common stock could decline.
Operational Risk Factors
Our net sales and profitability depend on our ability to continue to conceive, design and market products that appeal to our consumers.
Our business depends on our ability to continue to conceive, design, manufacture and market new products and upon continued market acceptance of our product offering. As described elsewhere in this Report, product research and development is an important component of our success and our market strategy. Rapidly changing consumer preferences and trends make it difficult to predict how long consumer demand for our existing products will continue or what new products will be successful. A decline in consumer demand for our products, our failure to develop new products on a timely basis in anticipation of changing consumer preferences or the failure of our new products to achieve and sustain consumer acceptance could reduce our net sales and profitability.
Intellectual property disputes relating to our products could increase our costs.
Our industry is susceptible to litigation regarding patent infringement and infringement of other intellectual property rights. We could be either a plaintiff or a defendant in trademark, patent and/or other intellectual property infringement or misappropriation claims and claims of breach of license from time to time. The prosecution or defense of any intellectual property litigation is both costly and disruptive of the time and resources of our management and product development teams, even if the claim or defense against us is without merit. The scope of any patent or other intellectual property to which we have or may obtain rights also may not prevent others from developing and selling competing products. The validity and breadth of claims covered in patents and other intellectual property involve complex legal and factual questions, and the resolution of such claims may be highly uncertain, lengthy and expensive. In addition, our patents or other intellectual property may be held invalid upon challenge, or others may claim that we have improperly or invalidly sought patent or other intellectual property protection for our technology, thus exposing us to direct or counter claims in any patent or intellectual property proceeding. We could also be required to pay substantial damages or settlement costs to resolve intellectual property litigation. Furthermore, we may rely on trade secret law to protect technologies and proprietary information that we cannot or have chosen not to patent. Trade secrets, however, are difficult to protect. Although we attempt to maintain protection through confidentiality agreements with necessary personnel, contractors and consultants, we cannot guarantee that such contracts will not be breached. In the event of a breach of a confidentiality agreement or the divulgence of proprietary information, we may not have adequate legal remedies to maintain our trade secret protection. Litigation to determine the scope of intellectual property rights, even if ultimately successful, could be costly and could divert management’s attention away from the Company’s business. Any of these negative events could adversely affect our profitability or operating results.
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Product recalls and other claims could affect our financial position and results of operations.
As a manufacturer and distributor of consumer products, we could be required to repurchase or recall one or more of our products if they are found to not meet quality or safety standards or be defective. A repurchase or recall of our products could be costly to us and could damage the reputation of our brands. If we were required to remove, or voluntarily remove our products from the market, our reputation could be tarnished and we might have large quantities of finished products that we could not sell. As a result, product recalls could have a material adverse effect on our business, results of operations and financial condition.
We may experience difficulties in integrating strategic acquisitions.
We have, as part of our strategy, historically pursued strategic acquisitions. The pursuit of future growth through acquisitions involves significant risks that could have a material adverse effect on our business. Risks associated with integrating strategic acquisitions include, but are not limited to:
•unanticipated costs relating to the integration of acquired businesses may increase our expenses and reduce our profitability;
•difficulties in achieving planned cost savings and synergies may increase our expenses;
•unanticipated management or operational problems or liabilities may adversely affect our profitability and financial condition; and/or
•breaches of the representations or warranties or other violations of the contractual obligations required by the acquisition agreement of other parties to the acquisition transaction and any contractual remedies related thereto may not adequately protect or compensate us.
We are dependent upon certain key members of management.
Our success will depend to a significant degree on the abilities and efforts of our senior management. Moreover, our success depends on our ability to attract, retain and motivate qualified management, marketing, technical and sales personnel. These people are in high demand and often have competing employment opportunities. The labor market for skilled employees is highly competitive and we may lose key employees or be forced to increase their compensation to retain these people. Employee turnover could significantly increase our recruitment, training and other related employee costs. The loss of key personnel, or the failure to attract qualified personnel, could have a material adverse effect on our business, financial condition or results of operations.
We rely on our credit facilities to provide us with sufficient working capital to operate our business.
Because of the historic seasonal nature of our business, we have from time to time relied upon our credit facilities to provide us with adequate working capital to operate our business. To the extent we again become more dependent upon our credit facilities to fund our operations, if our lenders reduce or terminate our access to amounts under our credit facilities, we may not have sufficient capital to fund our working capital needs and/or we may need to secure additional capital or financing to fund our working capital requirements or to repay outstanding debt under our credit facilities. We can make no assurance that we will be successful in ensuring our availability of amounts under our credit facilities when they are needed or in connection with raising additional capital and that any amount, if raised, will be sufficient to meet our cash flow requirements. In the event we do not have available cash balances on hand for funding future operations, and if we are not able to maintain our borrowing availability under our credit facilities at that time and/or raise additional capital when needed, we may be forced to sharply curtail our efforts to manufacture and promote the sale of our products or to curtail our operations.
Our debt covenants may limit our ability to complete acquisitions, incur debt, make investments, sell assets, merge or complete other significant transactions.
Our credit facilities and certain other of our debt instruments include limitations on a number of our activities in the event of a default, and in some cases regardless of whether a default has occurred, including our ability to:
•incur additional debt;
•create liens on our assets or make guarantees;
•make certain investments or loans; or
•dispose of or sell assets, make acquisitions above certain amounts or enter into a merger or similar transaction.
Although in recent periods we have not had to borrow funds under our credit facilities, we still are required to comply with certain restrictive covenants in our credit facilities, any of which may limit our ability to engage in acts that may be in our best
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long term interests. Additionally, a breach of any of the restrictive covenants in our credit facilities could result in a default under these facilities. If a default occurs while we have borrowing amounts outstanding, the lenders under our credit facilities may elect to declare all outstanding borrowings, together with accrued interest, to be immediately due and payable, to terminate any commitments they have to provide further borrowings and to exercise any other rights they have under the facilities or applicable law.
We may be subject to disruptions or failures in our information technology systems and network infrastructures that could have a material adverse effect on our business.
We rely on the efficient and uninterrupted operation of complex information technology systems and network infrastructures to operate our business. We also hold data in various company-owned and third party data center facilities upon which our business depends. A disruption, infiltration, breach or failure of these information technology systems or any of these data centers as a result of software or hardware malfunctions, system implementations or upgrades, computer viruses, third-party security breaches, employee error, theft or misuse, malfeasance, power disruptions, natural disasters or accidents could cause breaches of data security, loss of intellectual property and critical data and the release and misappropriation of sensitive competitive information. Any of these events could result in the loss of key information, impair our production and supply chain processes, harm our competitive position, damage our reputation with customers, cause us to incur significant costs to remedy any damages and ultimately materially and adversely affect our business, results of operations and financial condition. While we have implemented a number of protective measures, such measures may not be adequate or implemented properly to prevent or fully address the adverse effect of such events.
Our inability to manage our inventory levels could have a material adverse effect on our business.
To ensure we are able to meet customer demand in a highly seasonal business, and to account for long lead times or disruptions in supply chain, we may at times purchase components or materials in advance of normal timing for issuing purchase orders or at greater levels than existing purchase orders on hand. If we or our customers overestimate demand, or if demand is impacted by factors outside of our customers' control, and anticipated sales ultimately do not materialize or are lower than expected, we may experience higher inventory carrying and operating costs and/or increased excess or obsolete inventory or reserve charges, which would negatively impact our results of operations and profitability. Moreover, inventory levels in excess of customer demand may result in lower than planned financial performance. Alternatively, if we underestimate demand for our products, we may experience inventory shortages resulting in delays in fulfilling customer demands while we work to replenish inventory levels, missed sales and/or lost revenues.
Regulatory Risk Factors
Uncertainty over global tariffs, or the financial impact of tariffs, may negatively affect our results.
Our business is impacted by international or cross-border trade, including the import and export of products and goods into and out of the United States and trade tensions among nations. For example, U.S. domestic and global tariff frameworks have increased our costs of producing goods and resulted in additional risks to our supply chain. More tariff changes are also possible. We have developed strategies to mitigate, in part, previously implemented and, in some cases, proposed tariff increases, but there is no assurance we will be able to continue to mitigate the materially adverse impact of tariff increases on our financial and operating results. Further, uncertainties about future tariff changes could result in mitigation actions undertaken by us that could prove to be detrimental to our business and our relationships with our customers and suppliers. The scope of the tariffs and the rates at which they are implemented may continue to fluctuate and change in an unpredictable manner that further complicates our ability to implement mitigation actions.
The effective tax rate of the Company may be negatively impacted by future changes to tax laws in global jurisdictions in which we operate.
Changes in tax laws or tax rulings could have a material impact on our effective tax rate. Many countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively considering changes to existing tax laws. Certain proposals could include recommendations that could increase our tax obligations in many countries where we do business. Any changes in the taxation of our activities in such jurisdictions may result in a material increase in our effective tax rate.
We are subject to environmental, climate change, safety and human rights regulations and legislation.
We are subject to supranational, federal, state, local and foreign laws and other legal requirements related to the generation, storage, transport, treatment and disposal of materials as a result of our manufacturing and assembly operations. These laws
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include the Resource Conservation and Recovery Act (as amended), the Clean Air Act (as amended) and the Comprehensive Environmental Response, Compensation and Liability Act (as amended), as well as similar laws in foreign jurisdictions. Risk of environmental liability and changes associated with maintaining compliance with environmental laws is inherent in the nature of our business and there is no assurance that material liabilities or changes would not arise.
We are also subject to various supranational, federal, state and local environmental, laws, ordinances, regulations and other legislation or requirements of governmental authorities as it relates to climate change. We believe we comply with such laws and regulations as such laws are currently in place. Moreover, we do not believe that any direct or indirect consequences of any currently contemplated legislation related to climate change will have a material adverse effect on our operating costs, facilities, or products. However, evolving regulatory and legislative measures related to protecting against climate change could ultimately pose a risk to our business by influencing the buying patterns of our customers or increasing internal compliance costs.
The Company is also subject to the requirement of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC rules related thereto to conduct due diligence and disclose and report on whether certain minerals and metals, known as “conflict minerals,” are contained in the Company’s products and whether they originate from the Democratic Republic of Congo (“DRC”) and adjoining countries. We may face reputational challenges if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to sufficiently verify the origins of all conflict minerals used in our products through the procedures we implement.
Our failure to adequately protect personal information could have a material adverse effect on our business.
A wide variety of local, state, national, and international laws, directives and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data (including with respect to the European Union's General Data Protection Regulation and U.S. state laws such as the California Consumer Privacy Act). These data protection and privacy-related laws and regulations continue to evolve and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions and increased costs of compliance. Our failure to comply with applicable laws and regulations, or to protect such data, could result in enforcement actions against us, including fines, imprisonment of company officials and public censure, claims for damages by end-customers and other affected individuals, damage to our reputation and loss of goodwill (both in relation to existing end-customers and prospective end-customers), any of which could have a material adverse effect on our operations, financial performance, and business. Changing definitions of personal data and personal information, within the European Union, the United States, and elsewhere may limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing of data. The evolving data protection regulatory environment may require significant management attention and financial resources to analyze and modify our information technology infrastructure to meet these changing requirements all of which could reduce our operating margins and impact our operating results and financial condition.
Market and Economic Risk Factors
Competition, consolidation and financial distress in our markets could reduce our net sales, profitability and cash flows.
We operate in highly competitive markets. We compete with several large domestic and foreign companies such as Brunswick, Garmin, and Aqua Lung, with private label products sold by many of our retail customers and with other producers of outdoor recreation products. Some of our competitors have longer operating histories, stronger brand recognition and greater financial, technical, marketing and other resources than us. In addition, due to limited barriers to entry in some of the product industries we engage in, we may face competition from new participants in our markets or from existing participants developing and introducing new products into our market segments. Further, we experience price competition for our products, and competition for shelf space at retailers, all of which may increase in the future. Consolidation of our retail markets could result in fewer but larger retail customers, which may further result in lower selling prices or reduced sales volumes of our products or greater competition for shelf space in these retail markets. Further, financial distress or bankruptcies in our retail markets could negatively impact our operating results and cash flows. If we cannot compete in our product markets successfully in the future, our net sales, profitability and cash flows will likely decline.
General economic conditions affect the Company’s results.
Our revenues are affected by economic conditions and consumer confidence worldwide, but especially in the United States and Europe. In times of economic uncertainty, consumers tend to defer expenditures for discretionary items, which affects demand for our products. Moreover, our businesses are cyclical and seasonal in nature, and their success is impacted by general economic conditions and specific economic conditions affecting the regions and markets we serve, the overall level of consumer confidence in the economy and discretionary income levels. Any substantial deterioration in general economic
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conditions that diminishes consumer confidence or discretionary income can reduce our sales and adversely affect our financial results. Moreover, declining economic conditions create the potential for future impairments of goodwill and other intangible and long-lived assets that may negatively impact our financial condition and results of operations. Various uncertainties tied to economic conditions, including significant adverse changes in business climate, adverse actions by regulators, unanticipated competition, loss of key customers, a downturn in the economy or in discretionary income levels or changes in consumer preferences could impact the expected cash flows to be generated by an asset or group of assets, and may result in an impairment of those assets. The impact of weak consumer credit markets, corporate restructurings, layoffs, prolonged high unemployment rates, declines in the value of investments and residential real estate, higher fuel prices and increases in federal and state taxation all can negatively affect our operating results.
As noted above, because a substantial majority of our net revenue is generated through discretionary spending by consumers for our outdoor recreation products, a downturn in the economy resulting from prolonged supply chain disruptions or labor shortages, a significant increase in inflation rates (including in connection with rising interest rates through government action to fight inflationary trends), or a reduction in consumer confidence in the U.S. economy may have a material adverse impact on our business, financial condition and results of operations, as consumers generally reduce their discretionary spending during such periods.
We may experience elevated inflation in the markets in which we operate, with higher commodity, labor, freight and other cost pressure. While many costs may moderate over time, higher inflation rates could cause increases in wage levels, price increases from our suppliers, and could also negatively impact consumer confidence and discretionary spending patterns, all of which can adversely impact our sales levels and cost structure. The inability to offset inflationary price increases through price increases from our customers, modifications to our products, continuous improvement actions or otherwise may have a material adverse effect on our financial results and financial condition.
A limited number of our shareholders can exert significant influence over the Company.
As of October 3, 2025, Helen P. Johnson-Leipold, members of her family and related entities (hereinafter the Johnson Family), held approximately 75% of the voting power of both classes of our common stock taken as a whole. This voting power would permit these shareholders, if they chose to act together, to exert significant influence over the outcome of shareholder votes, including votes concerning the election of directors, by-law amendments, possible mergers, corporate control contests and other significant corporate transactions. Moreover, certain members of the Johnson Family have entered into a voting trust agreement covering approximately 99% of our outstanding class B common shares. This voting trust agreement permits these shareholders, if they continue to choose to act together, to exert significant influence over the outcome of shareholder votes, including votes concerning the election of directors, by-law amendments, possible mergers, corporate control contests and other significant corporate transactions.
Our shares of common stock are thinly traded and our stock price may be volatile.
Because our common stock is thinly traded, its market price may fluctuate significantly more than the stock market in general or the stock prices of similar companies, which are exchanged, listed or quoted on NASDAQ or another stock exchange. We believe there are approximately 5,433,000 shares of our Class A common stock held by non-affiliates as of October 3, 2025. Thus, our common stock will be less liquid than the stock of companies with broader public ownership, and as a result, the trading price for our shares of common stock may be more volatile. Among other things, trading of a relatively small volume of our common stock may have a greater impact on the trading price for our stock than would be the case if our public float were larger.
Our stock price is volatile and our shareholders may not be able to resell shares of Class A Common Stock at or above the price they paid.
The trading price of our Class A Common Stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These factors include:
•announcements relating to our earnings trends or with respect to any cost-cutting actions or other strategic transactions involving Johnson Outdoors;
•announcements relating to, and disruptions in, the sourcing, timing, availability and cost of raw materials and components necessary for the production of our products;
•announcements relating to product development efforts of Johnson Outdoors or competitors;
•announcements relating to the receipt, modification or termination of customer or supplier contracts, including with respect to any government contracts or grants;
•prevailing economic conditions;
•business disruptions caused by weather events, pandemics, or other natural disasters;
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•disputes concerning Johnson Outdoors' or its competitors' intellectual property or other proprietary rights;
•sales of our Class A Common Stock by our executive officers and directors or our significant shareholders in the future;
•the lack of an active, liquid, and orderly market in our Class A Common Stock;
•fluctuations in our quarterly operating results; and
•the issuance of new or changed securities analysts' reports or recommendations regarding the shares of our Class A Common Stock.
In addition, the stock markets in general, and the markets for equity securities in companies principally operating in the outdoor leisure or discretionary recreational product markets, have experienced periods of high volatility that have been often unrelated to the operating performance of the issuer. These broad market fluctuations may adversely affect the trading price or liquidity of our Class A Common Stock.
Sources of and fluctuations in market prices of raw materials can affect our operating results.
The primary raw materials we use in manufacturing our products are metals, resins, electronic components, and packaging materials. These materials are generally available from a number of suppliers, but traditionally we have chosen to concentrate our sourcing with a limited number of vendors for each commodity or purchased component. Although we believe our sources of raw materials are reliable and adequate for our current needs, adverse events in our supply chain may impact the pricing or availability of required raw materials and components to manufacture our products.
Our profitability is also affected by significant fluctuations in the prices of the raw materials and components we use in our products, including the effect of fluctuations in foreign currency exchange rates on raw materials and purchased components. We may not be able to pass along any price increases in our raw materials or other component costs to our customers. As a result, an increase in the cost of raw materials, labor or other costs associated with the manufacturing of our products could increase our costs of sales and reduce our gross margins.
Financial distress in supply chain and shortage of raw materials or components of supply.
Deteriorating industry conditions can adversely affect our supply base. Lower production levels at our major suppliers and volatility in certain raw material and energy costs may result in severe financial distress among many companies within our supply base, which may result in issues impacting the sourcing, timing, availability and cost of raw materials and components necessary to manufacture our products. Financial distress within our supply base and/or our suppliers’ inability to obtain credit from lending institutions could lead to commercial disputes and possible supply chain interruptions to our business. In addition, potential adverse industry conditions may require us to provide financial assistance or other measures to ensure uninterrupted production of key components or materials used in the production of our products which could have a material adverse effect on our existing and future revenues and net income.
Additionally, in the event of catastrophic acts of nature such as fires, tsunamis, hurricanes and earthquakes or a rapid increase in production demands, either we, or our suppliers may experience supply shortages of raw materials or components. This could be caused by a number of factors, including a lack of production line capacity or manpower or working capital constraints. As our industry consolidates its supply base in order to manage the costs of purchased goods and services, there is greater dependence on fewer sources of supply for certain components and materials used in our products, which could increase the possibility of a supply shortage of any particular component. If we or one of our own suppliers experience a supply shortage, we may become unable to produce the affected products if we cannot procure the necessary components from another source. Such production interruptions could impede a ramp-up in production and could have a material adverse effect on our business, results of operations and financial condition.
We consider the production capacities and financial condition of suppliers in our selection process, and expect that they will meet our delivery requirements. However, there can be no assurance that strong demand, capacity limitations, shortages of raw materials, labor disputes, freight capacity or other problems impacting our suppliers will not result in any shortages or delays in the supply of components to us.
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Currency exchange rate fluctuations could adversely affect the Company’s results.
We have significant foreign operations, for which the functional currencies are denominated primarily in euros, Swiss francs, Hong Kong dollars and Canadian dollars. As the values of the currencies of the foreign countries in which we have operations increase or decrease relative to the U.S. dollar, the sales, expenses, profits, losses, assets and liabilities of our foreign operations, as reported in our consolidated financial statements, increase or decrease, accordingly. Approximately 13% of our revenues for the year ended October 3, 2025 were denominated in currencies other than the U.S. dollar. Approximately 6% were denominated in euros and approximately 5% were denominated in Canadian dollars with the remaining 2% denominated in various other foreign currencies. We may mitigate a portion of the impact of fluctuations in certain foreign currencies on our operations through the purchase of foreign currency swaps, forward contracts and options to hedge known commitments denominated in foreign currencies or to reduce the risk of changes in foreign currency exchange rates on foreign currency borrowings.
Because we rely on foreign suppliers and we sell products in foreign markets, we are susceptible to numerous international business risks that could increase our costs or disrupt the supply of our products.
Our international operations subject us to risks, including:
•economic and political instability;
•restrictive actions by foreign governments, including with respect to tariffs, changes in tariff rates or trade policies (whether those of the United States or of a foreign jurisdiction);
•opportunity costs and reputational damage related to the presence of counterfeit versions of the Company’s products in such foreign markets;
•greater difficulty enforcing intellectual property rights and weaker laws protecting intellectual property rights;
•import duties or import or export restrictions;
•timely shipping of product and unloading of product, including the timely rail/truck delivery to our warehouses and/or a customer’s warehouse of our products;
•complications in complying with the laws and policies of the United States affecting the importation of goods, including tariffs, duties, quotas and taxes;
•required compliance with U.S. laws that impact the Company’s operations in foreign jurisdictions that do not impact local operating companies; and
•complications in complying with trade and foreign tax laws.
General Risk Factors
Cyber security vulnerabilities, threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, solutions, services and data.
Increased global cyber security vulnerabilities, threats, computer viruses and more sophisticated and targeted cyber-related attacks, as well as cyber security failures resulting from human error and technological errors, pose a risk to our systems, products and data as well as potentially to our employees’, customers’ and suppliers’ data and systems that may ultimately impact us. We attempt to mitigate these risks by employing a number of measures, including employee training, monitoring and testing, and maintenance of protective systems and contingency plans, but we remain potentially vulnerable to additional known or unknown threats. There is no assurance the impact from such threats will not be material to our financial results or reputation and it could result in security breaches, theft, lost or corrupted data, misappropriation of sensitive, confidential or personal data or information, loss of trade secrets and commercially valuable information, production downtimes and operational disruptions, any of which may adversely affect our profitability or operating results.
While our Board of Directors oversees cybersecurity risk mitigation efforts as part of our Enterprise Risk Management Framework, we rely to a large degree on management and outside consultants in managing our cybersecurity risk and ensuring adequate and proper measures are in place to protect against these risks.
Our Board of Directors reviews a biennial risk assessment survey and receives regular presentations and reports from management relative to information technology and cybersecurity matters. The Board of Directors has also designated the Audit Committee to receive reports at each of its quarterly meetings on Cybersecurity and to have management present on the same. Furthermore, our Audit Committee is responsible for reviewing all audit findings related to information technology general controls, internal and external vulnerability, and penetration testing. However, our directors do not have significant experience in cybersecurity risk management outside of the Company and therefore, its ability to fulfill its oversight function remains dependent on the input it receives from management and outside consultants.
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Future terror attacks, war, natural disasters or other catastrophic events beyond our control could negatively impact our business.
Terror attacks, war or other civil disturbances, natural disasters and other catastrophic events could lead to economic instability and decreased demand for our products, which could negatively impact our business, financial condition, results of operations and cash flows. In the past, terrorist attacks have caused instability in global financial markets and the industries in which we compete and have negatively affected spending on consumer discretionary products. In addition, our facilities are located throughout the world and could be subject to damage from terrorism incidents or from fires, floods, earthquakes or other natural or man-made disasters. Terrorist incidents could also lead to increased border security which could in turn negatively impact our global supply chain by causing shipping delays or shortages in key materials or components, increasing the cost of such goods or requiring us to keep greater inventories, any of which may adversely impact our business, results of operations, financial condition or cash flows.
We are currently operating in a period of geopolitical instability resulting from the ongoing military conflict between Russia and the Ukraine and the conflict in the Middle East, which have significantly contributed to economic uncertainty, capital market disruption and supply chain interruptions in the U.S. and global markets. While the length and impact of the ongoing conflicts are unpredictable, they could continue to lead to market disruptions, including supply chain interruptions and significant volatility in commodity prices, and in credit and capital markets. These conflicts may lead to sanctions and other penalties being levied or taken by various countries against Russia, Iran or other countries involved in these conflicts by the U.S., the EU, and other countries. Escalation of, or new geopolitical conflicts, could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially further disrupting the supply chain for necessary components and raw materials used by us or our suppliers in producing products. Any of the foregoing factors could have a material adverse effect on our business, operating results, financial condition and cash flows.
Our business is susceptible to adverse weather conditions or events.
Our success is in part affected by adverse weather conditions, including fires, floods, tornadoes, severe cold and other natural disasters. Such events have the tendency to create fluctuations in demand for our products which may increase our expenses and reduce our profitability. Moreover, our profitability is affected by our ability to successfully manage our inventory levels and demand for our products, which, in part depends upon the efficient operation of our production and delivery systems. These systems are vulnerable to damage or interruption from the aforementioned natural disasters. Such natural disasters could adversely impact our ability to meet delivery requirements of our customers, which may result in our need to incur extra costs to expedite production and delivery of product to meet customer demand. Any of these events could negatively impact our profitability.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable
ITEM 1C. CYBERSECURITY
Risk Management and Strategy
Governance
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ITEM 2. PROPERTIES
The Company maintains leased and owned manufacturing, warehousing, distribution and office facilities throughout the world. The Company believes that its facilities are well maintained and have capacity adequate to meet its current needs.
See Note 5 to the consolidated financial statements included elsewhere in this report for a discussion of the Company’s lease obligations.
As of October 3, 2025, the Company’s principal manufacturing (identified with an asterisk) and other locations are:
Alpharetta, Georgia (Fishing)
Antibes, France (Diving)
Batam, Indonesia* (Diving)
Binghamton, New York (Camping)
Burlington, Ontario, Canada (Fishing, Camping, Watercraft Recreation)
Casarza Ligure, Italy* (Diving)
Chai Wan, Hong Kong (Diving)
Chatswood, Australia (Diving)
Durban, South Africa* (Diving)
El Cajon, California (Diving)
Eufaula, Alabama* (Fishing)
Little Falls, Minnesota (Fishing)
Mankato, Minnesota* (Fishing)
Mexicali, Mexico* (Fishing)
Old Town, Maine* (Watercraft Recreation)
Toronto, Ontario, Canada (Fishing)
Nuremberg, Germany (Diving)
Zurich, Switzerland (Diving)
The Company’s corporate headquarters is located in a facility in Racine, Wisconsin.
ITEM 3. LEGAL PROCEEDINGS
In the normal course of business, we may be involved in various legal proceedings from time to time. As of the date of the filing of this Report, we are not involved in any litigation involving amounts deemed to be material to the business or financial condition of the Company.
ITEM 4. MINE SAFETY DISCLOSURES
None.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
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Certain information with respect to this item is included in Notes 9 and 10 to the Company’s consolidated financial statements included elsewhere in this report. The Company’s Class A common stock is traded on the NASDAQ Global Select MarketSM under the symbol: JOUT. There is no public market for the Company’s Class B common stock. However, the Class B common stock is convertible at all times at the option of the holder into shares of Class A common stock on a share for share basis. As of October 3, 2025, the Company had 379 holders of record of its Class A common stock and 16 holders of record of its Class B common stock. We believe the number of beneficial owners of our Class A common stock on that date was substantially greater.
A summary of the high and low closing prices for the Company’s Class A common stock during each quarter of the years ended October 3, 2025, September 27, 2024 and September 29, 2023 is as follows:
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock prices: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| High | $ | 38.20 | $ | 54.94 | $ | 68.18 | $ | 35.60 | $ | 51.52 | $ | 71.49 | $ | 31.51 | $ | 45.63 | $ | 64.24 | $ | 42.37 | $ | 42.40 | $ | 60.13 | |||||||||||||||||||||||||||||||||||||||||||||||
| Low | 31.62 | 44.69 | 46.93 | 24.77 | 42.95 | 58.93 | 21.71 | 33.70 | 56.53 | 29.26 | 33.15 | 52.01 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends
The Company’s Articles of Incorporation provide that no dividend, other than a dividend payable in shares of the Company’s common stock, may be declared or paid upon the Class B common stock unless such dividend is declared or paid upon both classes of common stock. Whenever a dividend (other than a dividend payable in shares of Company common stock) is declared or paid upon any shares of Class B common stock, at the same time there must be declared and paid a dividend on the shares of Class A common stock equal in value to 110% of the amount per share of the dividend declared and paid on the shares of Class B common stock. Whenever a dividend is payable in shares of Company common stock, such dividend must be declared or paid at the same rate on the Class A common stock and the Class B common stock.
Quarterly dividends declared in fiscal 2025 were $0.33 per share of Class A common stock, and $0.30 per share of Class B common stock. Total dividends declared in fiscal 2025 were $13,530. Cash dividends paid in fiscal 2025 totaled $13,507 and dividends payable of $3,387 were included in current liabilities at October 3, 2025.
While the Board of Directors of the Company presently intends to continue the payment of regular quarterly cash dividends on the Company’s common stock, they review the Company’s dividend quarterly and may elect to increase, decrease or not pay a dividend at any time. The Company’s ability to pay dividends could be affected by future business performance (including as a result of adverse developments in profitability, including reductions in margins, inflation and macroeconomic dynamics on our operations and cash flows), liquidity, capital needs, alternative investment opportunities and compliance with debt covenants in its loan agreements.
Total Shareholder Return
The graph below compares on a market cap weighted cumulative basis the yearly percentage change since October 2, 2020 in the total return (assuming reinvestment of dividends) to shareholders on the Class A common stock with (a) the total return (assuming reinvestment of dividends) on The NASDAQ Stock Market-U.S. Index; (b) the total return (assuming reinvestment of dividends) on the S&P Small Cap 600 Consumer Discretionary Index; and (c) the total return (assuming reinvestment of dividends) on a self-constructed peer group index. The Company’s peer group consists of Clarus Corporation, Brunswick Corporation, Topgolf Callaway Brands, Escalade Inc., Garmin Ltd., Marine Products Corporation, Malibu Boats Inc. and Johnson Health Tech Co., Ltd. BowFlex, Inc., a company included in previous peer groups in the Company's Annual Report on Form 10-K, was acquired by Johnson Health Tech Co., Ltd. The graph assumes $100 was invested on October 2, 2020 in the Company’s Class A common stock, The NASDAQ Stock Market-U.S. Index, the S&P Small Cap 600 Index, and the peer group index.
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* $100 invested on October 2, 2020 in stock or index, including reinvestment of dividends.
Indices calculated on a mid-month basis.
| 10/2/2020 | 10/1/2021 | 9/30/2022 | 9/29/2023 | 9/27/2024 | 10/3/2025 | ||||||||||||||||||||||||||||||
| Johnson Outdoors Inc. | $ | 100.0 | $ | 128.2 | $ | 60.9 | $ | 66.3 | $ | 45.5 | $ | 54.5 | |||||||||||||||||||||||
| NASDAQ Composite | 100.0 | 132.4 | 96.9 | 122.1 | 168.7 | 213.5 | |||||||||||||||||||||||||||||
| S&P Small Cap 600 Consumer Discretionary Index | 100.0 | 167.0 | 110.4 | 132.6 | 176.4 | 182.0 | |||||||||||||||||||||||||||||
| Peer Group | 100.0 | 158.6 | 92.9 | 112.5 | 164.0 | 222.4 | |||||||||||||||||||||||||||||
The information in this section titled “Total Shareholder Return” shall not be deemed to be “soliciting material” or “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C promulgated by the Securities and Exchange Commission or subject to the liabilities of section 18 of the Securities Exchange Act of 1934, as amended, and this information shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
ITEM 6. RESERVED
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless otherwise stated, all monetary amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, other than per share amounts, are stated in thousands.
Executive Overview
The Company designs, manufactures and markets innovative, high quality recreational products for the outdoor enthusiast. Through a combination of innovative products, strong marketing, a talented and passionate workforce and efficient distribution, the Company seeks to set itself apart from the competition in its markets. Its subsidiaries operate as a network that promotes innovation and leverages best practices and synergies in the design, production and marketing of their recreational products, following the strategic vision set by executive management and approved by the Company’s Board of Directors.
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Highlights
The Company’s fiscal 2025 full-year revenues remained essentially flat to the prior year. New product successes in the Fishing segment helped to offset sales declines resulting from the exit of the Company's Eureka! brand in the prior year. Favorable overhead absorption and lower inventory reserve adjustments in the current year contributed to a 1.2 point increase in gross margin year over year. An 8% decrease in operating expenses between years, driven mainly by the $11,173 write-off of goodwill in the prior year, as well as a decrease in promotional spending year over year, contributed to a $27,331 improvement in operating loss in fiscal 2025 from fiscal 2024.
Results of Operations
Summary consolidated financial results from continuing operations for the fiscal years presented were as follows:
| (thousands, except per share data) | 2025 | 2024 | 2023 | ||||||||||||||
| Net sales | $ | 592,415 | $ | 592,846 | $ | 663,844 | |||||||||||
| Gross profit | 208,093 | 200,980 | 244,087 | ||||||||||||||
| Operating expenses | 224,284 | 244,502 | 232,347 | ||||||||||||||
Operating (loss) profit | (16,191) | (43,522) | 11,740 | ||||||||||||||
| Interest income, net | (3,559) | (4,692) | (4,391) | ||||||||||||||
| Other income, net | (3,353) | (8,968) | (9,693) | ||||||||||||||
Income tax expense (benefit) | 25,015 | (3,329) | 6,290 | ||||||||||||||
Net (loss) income | (34,294) | (26,533) | 19,534 | ||||||||||||||
The Company’s internal and external sales and operating profit (loss) by business segment for each of the three most recent completed fiscal years were as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Net sales: | |||||||||||||||||
| Fishing | $ | 459,162 | $ | 452,341 | $ | 492,927 | |||||||||||
| Camping & Watercraft Recreation | 58,071 | 66,635 | 86,087 | ||||||||||||||
| Diving | 75,458 | 73,628 | 85,069 | ||||||||||||||
| Other / Eliminations | (276) | 242 | (239) | ||||||||||||||
| $ | 592,415 | $ | 592,846 | $ | 663,844 | ||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Operating profit (loss): | |||||||||||||||||
| Fishing | $ | 19,570 | $ | (6,598) | $ | 41,325 | |||||||||||
| Camping & Watercraft Recreation | 918 | (488) | (1,320) | ||||||||||||||
| Diving | 1,667 | (1,244) | 6,092 | ||||||||||||||
| Other / Eliminations | (38,346) | (35,192) | (34,357) | ||||||||||||||
| $ | (16,191) | $ | (43,522) | $ | 11,740 | ||||||||||||
See Note 13 to the Consolidated Financial Statements included elsewhere in this report for the definition of segment net sales and operating profit.
Fiscal 2025 vs. Fiscal 2024
Net Sales
Net sales in fiscal 2025 were $592,415 compared to $592,846 in fiscal 2024. Foreign currency exchange had a negligible impact on the current year’s sales versus the prior year.
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Net sales for the Fishing business increased by $6,821, or 2% during fiscal 2025 from fiscal 2024. The increase in sales in this segment year over year was mainly due to sales generated by the introduction of new products, particularly in the last half of the current fiscal year.
Camping & Watercraft Recreation net sales decreased $8,564, or 13%, in 2025 from 2024. As previously announced, the Company exited the Eureka! brand in this segment, and completed all remaining sales of Eureka! inventory in the first fiscal quarter of 2025. Excluding the impact of Eureka! sales in the prior year, which accounts for a decrease of approximately $9,432 year over year, sales in this segment increased slightly over the prior year due to success of new Jetboil products introduced into the market by the Company during the year.
Diving net sales increased $1,830, or 2%, year over year. The sales increase was primarily driven by modest improvements in market conditions across certain regions, as well as a favorable foreign currency translation impact on sales in this segment of approximately 1% in 2025 versus the prior year period.
Cost of Sales
Cost of sales was $384,322, or 64.9% of net sales, on a consolidated basis for fiscal 2025 compared to $391,866, or 66.1% of net sales, in the prior year. Incremental tariffs incurred during the current year were, in large part, capitalized on the balance sheet at October 3, 2025. The decrease in cost of sales as a percent of net sales year over year was driven primarily by the sell-off of remaining Eureka! branded product in the prior year at very low margins.
Gross Profit
Gross profit of $208,093 was 35.1% of net sales on a consolidated basis for the year ended October 3, 2025 compared to $200,980, or 33.9% of net sales in the prior year.
Gross profit in the Fishing business increased by $3,451 from the prior year due primarily to the 2% increase in net sales year over year. Material and labor cost increases were largely offset by lower inventory reserves and improved absorption of fixed overhead costs between the periods.
Camping & Watercraft Recreation gross profit decreased by $788 from 2024, where the impact of lower sales volumes was partially offset by an improved product mix in fiscal 2025 after fully exiting the Eureka! brand in early 2025.
The $4,494 increase in gross profit in the Diving segment was largely due to increased sales as well as reduced inventory reserves and selected pricing actions taken in the current year.
Operating Expenses
Operating expenses decreased from the prior year by $20,218. Key drivers of the expense change were an $11,173 write off of goodwill in the prior year, approximately $3,600 of lower deferred compensation costs between years, and a decrease in promotional spending versus the prior year period.
Operating expenses for the Fishing segment decreased by $22,717 from fiscal 2024 levels. This decrease was due primarily to the $11,173 write off of goodwill in the prior year, as well as approximately $10,000 of lower advertising and promotional spend between years.
Camping & Watercraft Recreation operating expenses decreased by $2,194 from the prior year, mainly due to decreased sales volume related costs between years.
Operating expenses for the Diving business increased by $1,583 year over year due primarily to increased variable compensation costs between periods.
The Company's fiscal 2025 general corporate expenses of $38,612 increased $3,110 from $35,502 in fiscal 2024. Higher variable compensation and health insurance costs over the prior year were partially offset by approximately $3,600 of lower deferred compensation costs due to less favorable market conditions on the Company's deferred compensation plan assets during fiscal 2025. The deferred compensation expenses are entirely offset in "Other (income) expense, net" related to marking the plan assets to market.
Operating Results
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The Company’s operating loss was $16,191 in fiscal 2025 compared to an operating loss of $43,522 in fiscal 2024. Fishing operating profit increased by $26,168 from the prior year to a profit of $19,570 due primarily to a goodwill impairment charge in the prior year and increased sales volumes between years, as discussed above. The operating profit for Camping & Watercraft Recreation was $918 compared to a loss of $488 in 2024 which increase was primarily a result of an improved sales mix of products between periods. The operating profit for the Diving business was $1,667 in fiscal 2025, up from an operating loss of $1,244 in fiscal 2024, due primarily to decreased materials costs and a favorable product mix between years.
Other Income and Expenses
Interest expense of $224 increased slightly compared to the prior year expense of $152. Interest income of $3,783 decreased from prior year interest income of $4,844 due to the decreased investment balances over the prior year. Net other income of $3,353 in fiscal 2025 decreased from $8,968 in fiscal 2024. The current year net other income included market earnings and dividend income on deferred compensation plan assets of $3,415, partially offset by currency losses of $126. The prior year net other income included the gain on the sale of a building of approximately $1,900 and market earnings and dividend income of $7,049 on deferred compensation plan assets, partially offset by currency losses of $385. The dividends and market gains and losses on deferred compensation plan assets recognized in the Consolidated Statement of Operations in “Other (income) expense, net” are offset as compensation expense in “Operating expenses.”
Pretax Income and Income Taxes
The Company realized a pretax loss of $9,279 in fiscal 2025 compared to a pretax loss of $29,862 in fiscal 2024. The Company recorded income tax expense of $25,015 in 2025, which equated to an effective tax rate of (269.6)%, compared to a tax benefit of $3,329 in 2024, which equated to an effective tax rate of 11.1%. In fiscal 2025, based on projections for the U.S. tax jurisdictions, the Company determined that it was more likely than not that certain deferred tax assets will not be realized and a valuation allowance balance of $25,880 was reported against the net deferred tax assets for the U.S, resulting in the increase in tax expense over the prior year.
Net Income (Loss)
The Company recognized net loss of $34,294, or $3.35 per diluted common share, in fiscal 2025 compared to net loss of $26,533, or $2.60 per diluted common share, in fiscal 2024 based on the factors discussed above.
Fiscal 2024 vs. Fiscal 2023
Net Sales
Net sales in fiscal 2024 decreased by 11% to $592,846 compared to $663,844 in fiscal 2023. Foreign currency exchange had a negligible impact on sales year over year.
Net sales for the Fishing business decreased by $40,586, or 8% during fiscal 2024 from fiscal 2023. Softer overall consumer demand and increased competitive pressure in the Fishing market contributed to the decline between years.
Camping & Watercraft Recreation net sales decreased $19,439 in fiscal 2024 from 2023. Approximately $4,500 of the decrease in net sales from the 2023 period was related to the previously disclosed sale of the Military and Commercial Tents product lines during the second fiscal quarter of 2023, with the remainder due primarily to general declines in market demand for camping and watercraft products.
Diving net sales decreased $11,441, or 13%, year over year. The sales decrease was due to softening market demand across all geographic regions, partially offset by a favorable foreign currency translation impact on sales in this segment of approximately 1% in 2024 versus the 2023 period.
Cost of Sales
Cost of sales was $391,866, or 66.1% of net sales, on a consolidated basis for fiscal 2024 compared to $419,757, or 63.2% of net sales, in fiscal 2023. The decrease in total cost of sales dollars was consistent with the decrease in sales year over year. As a percentage of net sales, the increase cost of sales between years was driven primarily by the unfavorable absorption of fixed overhead costs as a result of lower sales volumes between periods.
Gross Profit
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Gross profit of $200,980 was 33.9% of net sales on a consolidated basis for the year ended September 27, 2024 compared to $244,087, or 36.8% of net sales in fiscal 2023.
Gross profit in fiscal 2024 in the Fishing business decreased by $28,766 from fiscal 2023 due primarily to the 8% decrease in net sales year over year. While certain material and overhead costs improved year over year as a result of cost savings efforts, it was not enough to overcome unfavorable overhead absorption as a result of the reduced sales volumes between periods, and a product mix that contained lower margin products in fiscal 2024.
Camping & Watercraft Recreation gross profit in fiscal 2024 decreased by $7,309 from 2023, mainly due to lower sales volumes between years, as well as lower absorption of fixed overhead related to such sales decrease.
The $6,935 decrease in gross profit in the Diving segment was largely due to sales volume decreases during fiscal 2024 as compared to fiscal 2023.
Operating Expenses
Operating expenses increased in fiscal 2024 from fiscal 2023 levels by $12,155 despite the decrease in sales volumes. Key drivers of the expense change were an $11,173 write off of goodwill in fiscal 2024, approximately $3,800 of higher deferred compensation costs between years, partially offset by lower incentive compensation and professional services expenses between years.
Operating expenses for the Fishing segment increased by $19,156 from fiscal 2023 levels. The increase was due primarily to the $11,173 write off of goodwill in fiscal 2024, as well as approximately $11,000 higher advertising and promotional spend between years offset in part by lower warranty expense and lower sales volume related costs.
Camping & Watercraft Recreation operating expenses decreased in fiscal 2024 by $8,142 from fiscal 2023. In addition to decreased sales volume related costs between years, fiscal 2023 included expenses related to the Eureka! product exit of approximately $2,500.
Operating expenses for the Diving business increased by $401 year over year due primarily to severance expense and professional services expenses, partially offset by decreased sales volume related expenses between periods.
The Company's fiscal 2024 general corporate expenses of $35,503 increased $739 from $34,765 in fiscal 2023. More favorable market conditions on the Company's deferred compensation plan assets resulted in approximately $3,800 of higher deferred compensation expense during fiscal 2024 over fiscal 2023, partially offset by lower incentive compensation and professional services expenses year over year. The deferred compensation expenses are entirely offset by a gain in "Other (income) expense, net" related to marking the plan assets to market.
Operating Results
The Company’s operating loss was $43,522 in fiscal 2024 compared to an operating profit of $11,740 in fiscal 2023. Fishing operating profit decreased by $47,923 in fiscal 2024 to a loss of $6,598 from fiscal 2023 due primarily to lower sales volumes between years, as well as increased operating expenses, as discussed above. The operating loss for Camping & Watercraft was $488 in fiscal 2024 compared to a loss $1,320 in fiscal 2023 which improvement was primarily a result of the lower operating expenses between periods. The operating loss for the Diving business was $1,244 in fiscal 2024, down from an operating profit of $6,092 in fiscal 2023, due primarily to decreased sales volumes between periods.
Other Income and Expenses
Interest expense of $152 in fiscal 2024 was flat as compared to fiscal 2023 expense of $152. Interest income of $4,844 in fiscal 2024 increased slightly from fiscal 2023 interest income of $4,543 due to the increase in deposit interest rates year over year, as well as increased cash and investment balances year over year. Net other income of $8,968 in fiscal 2024 decreased from $9,693 in fiscal 2023. Fiscal 2024 net other income included the gain on the sale of a building of approximately $1,900 and market earnings and dividend income of $7,049 on deferred compensation plan assets, partially offset by currency losses of $385. In fiscal 2023, net other income included the gain on the sale of the Military and Commercial Tents product lines of approximately $6,560, and market earnings and dividends on the deferred compensation plan assets of $3,200, partially offset by $114 of currency losses. The dividends and market gains and losses on deferred compensation plan assets recognized in the Consolidated Statement of Operations in “Other (income) expense, net” are offset as compensation expense in “Operating expenses.”
Pretax Income and Income Taxes
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The Company realized a pretax loss of $29,862 in fiscal 2024 compared to pretax income of $25,824 in fiscal 2023. The Company recorded an income tax benefit of $3,329 in 2024, which equated to an effective tax rate of 11.1%, compared to tax expense of $6,290 in 2023, which equated to an effective tax rate of 24.4%.
Net Income (Loss)
The Company recognized net loss of $26,533, or $2.60 per diluted common share, in fiscal 2024 compared to net income of $19,534, or $1.90 per diluted common share, in fiscal 2023 based on the factors discussed above.
Financial Condition, Liquidity and Capital Resources
The Company believes its existing balances of cash and cash equivalents will be sufficient to satisfy its working capital needs, capital asset purchase requirements, outstanding commitments and other liquidity requirements associated with its existing operations over the next twelve months. The Company currently anticipates the cash used for future dividends will come from its current cash and cash generated from ongoing operating activities.
The Company considers all short-term investments in interest-bearing bank accounts, and all securities and other instruments with an original maturity of three months or less, to be equivalent to cash. Short-term investments consist of marketable securities, with original maturities greater than three months but less than one year, and long-term investments consist of marketable securities with original maturities greater than one year, with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade.
The Company’s cash flows from operating, investing and financing activities, as reflected in the accompanying Consolidated Statements of Cash Flows, are summarized in the following table:
| Year Ended | |||||||||||||||||
| (thousands) | October 3 2025 | September 27 2024 | September 29 2023 | ||||||||||||||
Cash provided by (used for): | |||||||||||||||||
| Operating activities | $ | 56,206 | $ | 40,984 | $ | 41,713 | |||||||||||
| Investing activities | (11,856) | 5,034 | (48,374) | ||||||||||||||
| Financing activities | (13,563) | (13,695) | (12,732) | ||||||||||||||
| Effect of foreign currency rate changes on cash | 114 | 1,321 | 1,444 | ||||||||||||||
Increase (decrease) in cash and cash equivalents | $ | 30,901 | $ | 33,644 | $ | (17,949) | |||||||||||
Operating Activities
The following table sets forth the Company’s working capital position at the end of each of the years shown:
| (thousands, except share data) | October 3 2025 | September 27 2024 | |||||||||
| Current assets | $ | 408,788 | $ | 428,728 | |||||||
| Current liabilities | 104,640 | 90,444 | |||||||||
| Working capital | $ | 304,148 | $ | 338,284 | |||||||
| Current ratio | 3.9:1 | 4.7:1 | |||||||||
Cash flows provided by operations in fiscal 2025 totaled $56,206, compared to $40,984 in fiscal 2024, and $41,713 in fiscal 2023. While the net loss in fiscal 2025 was larger than fiscal 2024, a significant portion of the current year's loss was driven by non-cash tax expense.
Depreciation and amortization charges were $20,627, $19,608 and $16,295 in fiscal 2025, 2024 and 2023, respectively.
Investing Activities
Cash flows used for investing activities were $11,856 in fiscal 2025, cash flows provided by investing activities were $5,034 in fiscal 2024, and cash flows used for investing activities were $48,374 in fiscal 2023. Fiscal 2025 cash usage reflects the acquisition of the business of Endless Summer Technologies Proprietary Limited (See Note 17 to the consolidated financial statements included elsewhere in this report for a discussion of the acquisition) for cash of $12,197 in the Company's Diving
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segment offset by proceeds from the maturity of investments of $16,316. During fiscal 2024, the Company received proceeds from maturities of investments of $27,025, as well as proceeds of approximately $1,900 related to the sale of a building. During fiscal 2023, the Company purchased investments of approximately $40,700 which was offset in part by $14,990 of proceeds from selling the Military and Commercial Tent product lines. Expenditures for property, plant and equipment were $15,975, $22,018 and $22,668 in fiscal 2025, 2024 and 2023, respectively. In general, the Company’s ongoing capital expenditures are primarily related to tooling for new products, facilities investments and information systems improvements.
Financing Activities
Cash flows used for financing activities totaled $13,563 in fiscal 2025 compared to $13,695 and $12,732 in 2024 and 2023, respectively, and were primarily for the payment of dividends of $13,507, $13,431 and $12,554 in 2025, 2024, and 2023, respectively.
Contractual Obligations and Off Balance Sheet Arrangements
The Company has contractual obligations and commitments to make future payments under its operating leases and open purchase orders. There have been no changes outside of the ordinary course of business in the specified contractual obligations during the year ended October 3, 2025.
The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance. Letters of credit outstanding at October 3, 2025 and September 27, 2024 were $67 and $67, respectively, and were included in the Company’s total loan availability. The Company had no unsecured revolving credit facilities at its foreign subsidiaries as of October 3, 2025 or September 27, 2024.
The Company has no other off-balance sheet arrangements.
Market Risk Management
Foreign Exchange Risk
The Company has significant foreign operations, for which the functional currencies are denominated primarily in euros, Swiss francs, Hong Kong dollars and Canadian dollars. As the values of the currencies of the foreign countries in which the Company has operations increase or decrease relative to the U.S. dollar, the sales, expenses, profits, losses, assets and liabilities of the Company’s foreign operations, as reported in the Company’s consolidated financial statements, increase or decrease, accordingly. Approximately 13% of the Company’s revenues for the fiscal year ended October 3, 2025 were denominated in currencies other than the U.S. dollar. Approximately 6% were denominated in euros and approximately 5% were denominated in Canadian dollars, with the remaining 2% denominated in various other foreign currencies. Changes in foreign currency exchange rates can cause unexpected financial losses or cash flow needs.
Interest Rate Risk
The Company operates in a seasonal business and experiences significant fluctuations in operating cash flow as working capital needs increase in advance of the Company’s primary selling and cash generation season, and decline as accounts receivable are collected and cash is accumulated.
Commodities
Certain components used in the Company’s products are exposed to commodity price changes. The Company manages this risk through instruments such as purchase orders and non-cancellable supply contracts. Primary commodity price exposures include costs associated with metals, resins and packaging materials.
Impact of Inflation
The Company anticipates that changing costs of basic raw materials (including due to inflationary conditions in the economy) may impact future operating costs and, accordingly, the prices of its products. The Company is involved in continuing programs to mitigate the impact of cost increases through changes in product design and identification of sourcing and manufacturing efficiencies. Price increases and, in certain situations, price decreases are implemented for individual products, when appropriate.
The Company’s results of operations and financial condition are presented based on historical cost.
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Critical Accounting Estimates
The Company’s management discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of its assets, liabilities, sales and expenses, and related footnote disclosures. On an on-going basis, the Company evaluates its estimates for product returns, credit losses, inventories, long lived assets and goodwill, income taxes, warranty obligations, pensions and other post-retirement benefits, litigation and other subjective matters impacting the financial statements. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements. Management has discussed these policies with the Audit Committee of the Company’s Board of Directors.
Inventories
The Company values inventory at the lower of cost (determined using the first-in first-out method) or net realizable value. Management’s judgment is required to determine the reserve for obsolete or excess inventory. Inventory on hand may exceed future demand either because the product is outdated or because the amount on hand is more than will be used to meet future needs. Inventory reserves are estimated by the individual operating companies using standard quantitative measures based on criteria established by the Company. The Company also considers current forecast plans, as well as market and industry conditions in establishing reserve levels. Though the Company considers these reserve balances to be adequate, changes in economic conditions, customer inventory levels or competitive conditions could have a favorable or unfavorable effect on required reserve balances.
Deferred Taxes
The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. While the Company has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event the Company were to determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made. Likewise, should the Company determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made. The Company recorded a reserve on US deferred tax assets in fiscal 2025. See Note 6, Income Taxes, to the consolidated financial statements included elsewhere in this report for additional information.
Goodwill and Other Intangible Assets Impairment
Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. Generally, annual impairment tests are performed by the Company in the fourth quarter of each fiscal year. Goodwill is tested for impairment at the reporting unit level.
In assessing the recoverability of the Company’s goodwill, the Company estimates the fair value of the reporting unit to which the goodwill relates. Fair value of the reporting unit is estimated using a discounted cash flow model. If the fair value of a reporting unit exceeds its carrying value, no impairment exists. When the fair value of the reporting unit is less than it's carrying value, an impairment charge is recognized based on the excess of carrying amount over its fair value, not to exceed the carrying value of the goodwill. The Company recognized a goodwill impairment charge in the fourth quarter of fiscal 2024 of $11,173 in "Goodwill Impairment" in the accompanying Consolidated Statements of Operations in the Fishing segment, resulting in a full impairment of the Company's balance of goodwill. The Company did not recognize any goodwill impairment charges in 2025 or 2023. See Note 1, subheading "Goodwill," to the consolidated financial statements included elsewhere in this report for additional information.
The discounted cash flow model used to estimate fair value of reporting units requires a number of key estimates and assumptions. The Company estimates the future cash flows of the reporting units based on historical and forecasted revenues and operating costs and applies a discount rate to the estimated future cash flows for purposes of the valuation. This discount rate is based on the estimated weighted average cost of capital, which includes certain assumptions made by management such
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as market capital structure, market betas, the risk-free rate of return and the estimated costs of borrowing. Changes in these key estimates and assumptions, or in other assumptions used in this process, could materially affect our impairment analysis in a given year.
In assessing the recoverability of the Company’s other indefinite lived intangible assets, the Company estimates the fair value of the various intangible assets. The fair value of trademarks and patents is estimated using the relief from royalty method. If the fair value of an intangible asset exceeds its carrying value, no impairment exists. When fair value is less than the carrying value of the intangible asset, an impairment loss is recognized for the amount of the difference, not to exceed the carrying value of the intangible asset.
A number of factors, many of which the Company has no ability to control, could affect its financial condition, operating results and business prospects and could cause actual results to differ from the estimates and assumptions that the Company uses in preparing its financial statements. These factors include: a prolonged global economic crisis, a significant decrease in demand for the Company’s products, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator and successful efforts by the Company’s competitors to gain market share.
Warranties
The Company accrues a warranty reserve for estimated costs to provide warranty services. Warranty reserves are estimated using standard quantitative measures based on criteria established by the Company. Estimates of costs to service its warranty obligations are based on historical experience, expectation of future conditions and known product issues. To the extent the Company experiences increased warranty claim activity or increased costs associated with servicing those claims, revisions to the estimated warranty reserve would be required. The Company engages in product quality programs and processes, including monitoring and evaluating the quality of its suppliers, to help minimize warranty obligations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information with respect to this item is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “Market Risk Management.”
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information with respect to this item is included in the Company’s consolidated financial statements attached to this report on pages F-1 to F-35.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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ITEM 9A. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that the information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company carried out an evaluation as of October 3, 2025, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of October 3, 2025 at reaching a level of reasonable assurance. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has designed its disclosure controls and procedures to reach a level of reasonable assurance of achieving the desired control objectives.
The report of management required under this Item 9A is included on page F-2 of the Company’s Consolidated Financial Statements attached to this Report under the heading “Management’s Report on Internal Control over Financial Reporting” and is incorporated herein by reference.
(b)Changes in Internal Control over Financial Reporting
There was no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(c)Attestation Report of Independent Registered Public Accounting Firm
RSM US LLP, the independent registered public accounting firm who audited the Company’s consolidated financial statements, has issued an attestation report on the Company’s internal control over financial reporting, which is contained in the Company’s consolidated financial statements under the heading “Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting.”
ITEM 9B. OTHER INFORMATION
(a) Matters Required to be Disclosed on a Form 8-K
Item 1.01 of Form 8-K: Effective as of December 9, 2025, the Company and certain of its subsidiaries entered into a Second Amended and Restated Credit Agreement dated as of December 9, 2025 among the Company, certain of the Company’s subsidiaries named therein, certain guarantors named therein, PNC Bank, National Association, as lender and as administrative agent, PNC Capital Markets LLC, as sole lead arranger and bookrunner, and the other lender named therein (the “Credit Agreement”). The Credit Agreement amends and restates the Company’s Amended and Restated Credit Agreement dated as of November 15, 2017, as previously amended effective July 15, 2021 and January 29, 2025, among the Company, certain of the Company’s subsidiaries named therein, PNC Bank, National Association, as lender and as administrative agent, PNC Capital Markets LLC, as sole lead arranger and bookrunner, and the other lender named therein. The material provisions of the new Credit Agreement are as follows:
•The new Credit Agreement provides for borrowings of up to an aggregate principal amount not to exceed $50 million through December 9, 2029 (i.e., the maturity date), including letter of credit and swingline borrowing sublimits of $10 million each;
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•Borrowings under the new Credit Agreement are secured generally by substantially all of the personal property of the Company and the subsidiary borrowers. The new credit facility requires springing borrowing base certificate requirements if the availability under the facility is less than $25 million;
•The new Credit Agreement provides the Company with the option to request additional increases in the revolving credit facility for an additional aggregate amount of $50 million (i.e., an aggregate borrowing amount of $100 million) subject to the conditions of the Credit Agreement and subject to the approval of the Lenders;
•Interest is payable under the new Credit Agreement, at the Company’s option, based upon an overnight bank rate, SOFR or the prime rate plus an applicable margin and it resets the interest rate calculation at the Company’s option on an either one, three or six month basis by instituting an applicable margin based on the Company’s net leverage ratio (net of up to $25 million in unrestricted cash and cash equivalents on hand) for the trailing twelve month period. The applicable SOFR margin ranges from 1.25 percent to 2.00 percent;
•The new Credit Agreement requires the Company to maintain a net leverage ratio of less than 3:00 to 1.00 and an interest coverage ratio of not less than 3.50 : 1.00, each tested on a quarterly basis; and
•The new Credit Agreement restricts the Company’s ability to incur additional debt and engage in certain asset or stock acquisitions or dispositions and includes maximum leverage ratio and minimum interest coverage ratio covenants.
•
This description of the Credit Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Credit Agreement, a copy of which is attached hereto as Exhibit 10.20, and which is incorporated herein by reference.
Item 1.02 of Form 8-K: On December 9, 2025, as described in Item 1.01 above, the Company entered into the new Credit Agreement which amended and restated the Company’s Amended and Restated Credit Agreement dated as of November 15, 2017, as previously amended effective July 15, 2021 and January 29, 2025, among the Company, certain of the Company’s subsidiaries named therein, PNC Bank, National Association, as lender and as administrative agent, PNC Capital Markets LLC, as sole lead arranger and bookrunner, and the other lender named therein.
Item 2.03 of Form 8-K: On December 9, 2025, the Company became obligated on direct financial obligations pursuant to the terms of the new Credit Agreement, as described in Item 1.01 above.
(b)Trading Plans
During the three month period ended October 3, 2025, no director or officer of the Company adopted terminated
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION
Not Applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information with respect to this item is incorporated herein by reference to the discussion under the headings “Proposal 1: Election of Directors,” “Executive Officers,” “Section 16(a) Reports,” "Directors Meetings and Committees - Nominating and Corporate Governance Committee” and “Audit Committee Matters – Audit Committee Financial Expert” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 31, 2026. Information regarding the Company’s Code of Business Ethics is incorporated herein by reference to the discussion under “Corporate Governance Matters – Employee Code of Conduct and Code of Ethics; Corporate Governance Guidelines; and Procedures for Reporting of Accounting Concerns” in the Company's Proxy Statement for the 2026 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 31, 2026.
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The Audit Committee of the Company’s Board of Directors is an “audit committee” for purposes of Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the Audit Committee are Edward F. Lang (Chairman), Jeffrey M. Stutz, Richard ("Casey") Sheahan, and Edward Stevens.
The Company has adopted the Johnson Outdoors Insider Trading Policy which governs the purchase, sale and/or other disposition of the Company's securities, including its Class A Common Stock, by its directors, officers and employees that is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations. A copy of the Johnson Outdoors Insider Trading Policy is filed as Exhibit 19 to this Report.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to this item is incorporated herein by reference to the discussion under the headings “Directors Compensation” and “Executive Compensation” and “CEO Pay Relative to Median Pay of our Employees” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 31, 2026.
The information incorporated by reference from “Report of the Compensation Committee” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 31, 2026, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information with respect to this item is incorporated herein by reference to the discussion under the heading “Stock Ownership of Management and Others” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 31, 2026.
Equity Compensation Plan Information
The following table summarizes share information, as of October 3, 2025, for the Company’s equity compensation plans, including the Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan, the Johnson Outdoors Inc. 2010 Long-Term Stock Incentive Plan, the Johnson Outdoors Inc. 2020 Long-Term Stock Incentive Plan and the Johnson Outdoors Inc. 2009 Employees' Stock Purchase Plan. All of these plans have been approved by the Company’s shareholders.
| Plan Category | Number of Common Shares to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-average Exercise Price of Outstanding Options, Warrants and Rights | Number of Common Shares Available for Future Issuance Under Equity Compensation Plans | |||||||||||||||||
| 2020 Long-Term Stock Incentive Plan | 121,253 | (1) | $ | — | 258,302 | (2) | ||||||||||||||
| 2012 Non-Employee Director Stock Ownership Plan | 5,477 | — | — | |||||||||||||||||
2023 Non-Employee Director Stock Ownership Plan | — | — | 25,807 | |||||||||||||||||
2009 Employees' Stock Purchase Plan | — | — | 62,187 | |||||||||||||||||
| Total All Plans | 126,730 | — | 346,296 | |||||||||||||||||
(1) Includes 121,253 performance stock unit awards at their target values. The ultimate amount of performance stock units that could vest can range from 0% to 200% of the target amount with respect to awards granted in fiscal 2025 and 0% to 150% with respect to awards granted in fiscal years prior to 2025, or from 0 units to 210,776 units for all awards.
(2) Includes 47,526 of future shares to be issued, as well as up to 210,776 shares of performance stock units that may be issued in shares of Class A Common Stock at the maximum earned level.
28
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Information with respect to this item is incorporated herein by reference to the discussion under the heading “Certain Relationships and Related Transactions” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 31, 2026. Information regarding director independence is incorporated by reference to the discussions under “Corporate Governance Matters-Director Independence” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 31, 2026.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information with respect to this item is incorporated herein by reference to the discussion under the heading “Audit Committee Matters – Fees of Independent Registered Public Accounting Firm” in the Company’s Proxy Statement for the 2026 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission on or before January 31, 2026.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following documents are filed as a part of this report:
Financial Statements
Included in Item 8 of Part II of this report are the following:
•Reports of Independent Registered Public Accounting Firm
•Consolidated Statements of Operations – Years ended October 3, 2025, September 27, 2024 and September 29, 2023
•Consolidated Statements of Comprehensive Income (Loss) – Years ended October 3, 2025, September 27, 2024 and September 29, 2023
•Consolidated Balance Sheets – October 3, 2025 and September 27, 2024
•Consolidated Statements of Shareholders’ Equity – Years ended October 3, 2025, September 27, 2024 and September 29, 2023
•Consolidated Statements of Cash Flows – Years ended October 3, 2025, September 27, 2024 and September 29, 2023
•Notes to Consolidated Financial Statements
Exhibits
See Exhibit Index.
29
ITEM 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Racine and State of Wisconsin, on the 12th day of December 2025.
JOHNSON OUTDOORS INC. (Registrant) | ||||||||
| By | /s/ Helen P. Johnson-Leipold | |||||||
| Helen P. Johnson-Leipold Chairman and Chief Executive Officer | ||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated on the 12th day of December 2025.
| /s/ Helen P. Johnson-Leipold | Chairman and Chief Executive Officer and Director | |||||||
| (Helen P. Johnson-Leipold) | (Principal Executive Officer) | |||||||
| /s/ John M. Fahey, Jr. | Vice Chairman of the Board and Lead Outside Director | |||||||
| (John M. Fahey, Jr.) | ||||||||
| /s/ Edward Stevens | Director | |||||||
| (Edward Stevens) | ||||||||
| /s/ Edward F. Lang | Director | |||||||
| (Edward F. Lang) | ||||||||
| /s/ Katherine Button Bell | Director | |||||||
| (Katherine Button Bell) | ||||||||
| /s/ Richard Sheahan | Director | |||||||
| (Richard (“Casey”) Sheahan) | ||||||||
/s/ Jeffrey M. Stutz | Director | |||||||
(Jeffrey M. Stutz) | ||||||||
| /s/ Annie Zipfel | Director | |||||||
| (Annie Zipfel) | ||||||||
| /s/ Paul G. Alexander | Director | |||||||
| (Paul G. Alexander) | ||||||||
| /s/ David W. Johnson | Vice President and Chief Financial Officer | |||||||
| (David W. Johnson) | (Principal Financial and Accounting Officer) | |||||||
30
EXHIBIT INDEX
| Exhibit | Title | ||||
| Articles of Incorporation of the Company as amended through February 17, 2000. (Filed as Exhibit 3.1(a) to the Company’s Form 10-Q for the quarter ended March 31, 2000 and incorporated herein by reference.) | |||||
| Bylaws of the Company as amended and restated through December 6, 2010. (Filed as Exhibit 3.2 to the Company’s Form 10-K for the year ended October 1, 2010 and incorporated herein by reference.) | |||||
| Description of Registrant's Securities (Filed as Exhibit 4.1 to the Company's Form 10-K for the year ended September 27, 2019 and incorporated herein by reference.) | |||||
| Johnson Outdoors Inc. Class B common stock Amended and Restated Voting Trust Agreement, dated as of February 16, 2010 (Filed as Exhibit 2 to Amendment No. 14 to the Schedule 13D filed by Helen P. Johnson-Leipold on February 24, 2017 and incorporated herein by reference.) | |||||
| Registration Rights Agreement regarding Johnson Outdoors Inc. common stock issued to the Johnson family prior to the acquisition of Johnson Diversified, Inc. (Filed as Exhibit 10.1 to the Company’s Form 10-K dated and filed with the Securities and Exchange Commission on December 8, 2017 and incorporated herein by reference.) | |||||
| Registration Rights Agreement regarding Johnson Outdoors Inc. Class A common stock held by Mr. Samuel C. Johnson. (Filed as Exhibit 10.2 to the Company’s Form 10-K dated and filed with the Securities and Exchange Commission on December 8, 2017 and incorporated herein by reference.) | |||||
| Johnson Outdoors Inc. 2000 Long-Term Stock Incentive Plan. (Filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated July 29, 2005 and incorporated herein by reference.) | |||||
| Johnson Outdoors Inc. Worldwide Key Executives’ Discretionary Bonus Plan. (Filed as Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 13, 2014 and incorporated herein by reference.) | |||||
| Johnson Outdoors Inc. 2003 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 10.2 to the Company’s Form 10-Q dated April 2, 2004 and incorporated herein by reference.) | |||||
| Form of Restricted Stock Agreement under Johnson Outdoors Inc. 2003 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 4.2 to the Company’s Form S-8 Registration Statement No. 333-115298 and incorporated herein by reference.) | |||||
| Form of Stock Option Agreement under Johnson Outdoors Inc. 2003 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 4.3 to the Company’s Form S-8 Registration Statement No. 333-115298 and incorporated herein by reference.) | |||||
| Amended and Restated Credit Agreement dated as of November 15, 2017 among Johnson Outdoors Inc., certain subsidiaries of Johnson Outdoors Inc., PNC Bank, National Association, as lender and administrative agent, PNC Capital markets LLC, as sole lead arranger and bookrunner, and the other lender named therein (filed as Exhibit 99.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on November 20, 2017). | |||||
| Johnson Outdoors Inc. 2009 Employees’ Stock Purchase Plan. (Filed as Exhibit 99.2 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on March 8, 2010.) | |||||
31
| Johnson Outdoors Inc. 2010 Long Term Stock Incentive Plan. (Filed as Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 15, 2015 and incorporated herein by reference.) | |||||
| Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan. (Filed as Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 13, 2017 and incorporated herein by reference.) | |||||
| Form of Restricted Stock Unit Agreement under Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 10.31 to the annual report on Form 10-K dated and filed with the Securities and Exchange Commission on December 5, 2014.) | |||||
| Form of Restricted Stock Unit Agreement (Performance Based) under Johnson Outdoors Inc. 2010 Long Term Stock Incentive Plan. (Filed as Exhibit 10.32 to the annual report on Form 10-K dated and filed with the Securities and Exchange Commission on December 7, 2015.) | |||||
| Form of Restricted Stock Agreement under Johnson Outdoors Inc. 2012 Non-Employee Director Stock Ownership Plan. (Filed as Exhibit 10.14 to the annual report on Form 10-K dated and filed with the Securities and Exchange Commission on December 7, 2018.) | |||||
| Johnson Outdoors Inc. 2020 Long Term Stock Incentive Plan. (Filed as Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 10, 2020 and incorporated herein by reference.) | |||||
Form of Restricted Stock Unit Agreement (Performance Based) under Johnson Outdoors Inc. 2020 Long Term Stock Incentive Plan. (Filed as Exhibit 99.2 to the registration statement on Form S-8 dated and filed with the Securities and Exchange Commission on May 5, 2020 and incorporated herein by reference.) | |||||
10.17 + | Form of Restricted Stock Agreement under Johnson Outdoors Inc. 2020 Long Term Stock Incentive Plan. (Filed as Exhibit 99.3 to the registration statement on Form S-8 dated and filed with the Securities and Exchange Commission on May 5, 2020 and incorporated herein by reference.) | ||||
| First Amendment dated July 15, 2021 to Amended and Restated Credit Agreement dated as of November 15, 2017 among Johnson Outdoors Inc., certain subsidiaries of Johnson Outdoors Inc., PNC Bank, National Association, as lender and administrative agent, PNC Capital markets LLC, as sole lead arranger and bookrunner, and the other lender named therein (filed as Exhibit 10.1 to the Company's Form 8-K dated and filed with the Securities and Exchange Commission on July 16, 2021 and incorporated herein by reference). | |||||
Second Amendment dated January 29, 2025 to Amended and Restated Credit Agreement dated as of November 15, 2017 among the Company, certain of the Company’s subsidiaries named therein, PNC Bank, National Association, as lender and as administrative agent, PNC Capital Markets LLC, as sole lead arranger and bookrunner, and the other lender named therein. (Filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended December 27, 2024 and incorporated herein by reference.) | |||||
Second Amended and Restated Credit Agreement dated as of December 9, 2025 among Johnson Outdoors Inc., certain subsidiaries of Johnson Outdoors Inc., certain guarantors named therein, PNC Bank, National Association, as lender and administrative agent, PNC Capital markets LLC, as sole lead arranger and bookrunner, and the other lender named therein. | |||||
Johnson Outdoors Inc. Insider Trading Policy. | |||||
Subsidiaries of the Company as of October 3, 2025 | |||||
| Consent of Independent Registered Public Accounting Firm. | |||||
32
| Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a). | |||||
| Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a). | |||||
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350. (1) | |||||
97 + | Johnson Outdoors Inc. Incentive Compensation Recovery Policy, as amended and restated effective as of June 1, 2023. | ||||
| 101 | The following materials from Johnson Outdoors Inc.’s Annual Report on Form 10-K for the fiscal year ended October 3, 2025 formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) Consolidated Statements of Operations; (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Balance Sheets; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements. XBRL Instance Document - the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
| 104 | The cover page from the Company's Annual Report on Form 10-K for the year ended October 3, 2025 has been formatted in Inline XBRL (included in Exhibit 101). | ||||
+ A management contract or compensatory plan or arrangement.
(1)This certification is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
33
CONSOLIDATED FINANCIAL STATEMENTS
| Table of Contents | Page | |||||||
F-2 | ||||||||
F-3 | ||||||||
Report of Independent Registered Public Accounting Firm (PCAOB ID: | F-4 | |||||||
F-6 | ||||||||
F-7 | ||||||||
F-8 | ||||||||
F-9 | ||||||||
F-10 | ||||||||
F-11 | ||||||||
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Johnson Outdoors Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements. The Company’s internal control over financial reporting includes those policies and procedures that:
(a)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(b)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
(c)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of October 3, 2025. In making this assessment, management used the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. Based on our assessment, management believes that, as of October 3, 2025, the Company’s internal control over financial reporting was effective based on those criteria.
| /s/ Helen P. Johnson-Leipold | /s/ David W. Johnson | ||||||||||
| Chairman and Chief Executive Officer | Vice President and Chief Financial Officer | ||||||||||
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors
Johnson Outdoors Inc.
Opinion on the Internal Control Over Financial Reporting
We have audited Johnson Outdoors Inc.'s (the Company) internal control over financial reporting as of October 3, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 3, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the Company and our report dated December 12, 2025 expressed an unqualified opinion.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ RSM US LLP
Milwaukee, Wisconsin
December 12, 2025
F-3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Johnson Outdoors Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Johnson Outdoors Inc. and its subsidiaries (the Company) as of October 3, 2025 and September 27, 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended October 3, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of October 3, 2025 and September 27, 2024, and the results of its operations and its cash flows for each of the three years in the period ended October 3, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of October 3, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated December 12, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Evaluation of Obsolete and Excess Inventory Reserve
As described within Notes 1 and 15 to the consolidated financial statements, the consolidated gross inventory balance as of October 3, 2025 was $192,453,000, and $21,727,000 in reserves, for a consolidated net inventory balance of $170,726,000, of which a significant portion relates to the Fishing segment. The Company values inventory at the lower of cost (determined using the first-in, first-out method) or net realizable value. Management develops assumptions when estimating the inventory reserves based on expected future demand, market conditions, and industry conditions.
We identified the value of the obsolete and excess inventory related to the Fishing segment as a critical audit matter as there was a high degree of auditor judgment and increased audit effort when performing audit procedures given the subjective nature of the significant assumptions utilized by management.
Our audit procedures related to the Company’s evaluation of the obsolete and excess inventory reserve for the Fishing segment include the following primary procedures, among others:
•We obtained an understanding of the relevant controls related to the obsolete and excess inventory and tested such controls for design and operating effectiveness.
F-4
•We tested the completeness of the inventory population subject to the obsolete and excess reserve, and in addition,we recalculated the reserve and confirmed that calculation conformed to the Company policy for inventory reserves.
•We performed a retrospective review of current year activity compared to prior year estimates to evaluate management's estimation accuracy.
•We evaluated the reasonableness of management's significant assumptions related to predicted or internally developed forecasted product demand.
Goodwill Impairment
As described in Note 1 to the consolidated financial statements, the Company's goodwill balance was $10,456,000 at October 3, 2025, and is recorded in the Diving reporting unit.. Goodwill is tested for impairment at least annually, at the reporting unit level, by comparing the estimated fair value of the reporting unit to its carrying value. The Company uses a discounted cash flow model, which is considered an income valuation approach, to estimate the fair value of the Diving reporting unit. When the carrying value of the reporting unit exceeds its fair value, an impairment charge is recorded for the amount that the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of the goodwill.
We identified the Company's annual goodwill impairment test for the Diving reporting unit as a critical audit matter due to the significant assumptions made by management to estimate the fair value of the reporting unit, including revenue growth rates, profit margins and the discount rate. Auditing management’s assumptions required a high degree of auditor judgment and an increase in audit effort, including the use of our valuation specialists, due to the impact these assumptions could have on the accounting estimate.
Our audit procedures related to the Company’s estimate of fair value of the Diving reporting unit included the following, among others:
•We obtained an understanding of management’s controls relating to estimating the fair value of the Diving reporting unit and tested such controls for design and operating effectiveness.
•We utilized our valuation specialists to test the reasonableness of the discount rate by comparing the inputs used by management to publicly available market data.
•We developed an independent estimate of the Diving reporting unit's fair value using a combination of historical results achieved by the Diving reporting unit and publicly available market data for the Diving reporting unit's industry and compared our independent estimate to management's estimate of fair value.
•We tested the underlying data used by management for completeness and accuracy by comparing it to source information.
•We tested the mathematical accuracy of management’s discounted cash flow model.
We have served as the Company’s auditor since 2010.
/s/ RSM US LLP
December 12, 2025
F-5
CONSOLIDATED STATEMENTS OF OPERATIONS
| Year Ended | |||||||||||||||||
(thousands, except per share data) | October 3 2025 | September 27 2024 | September 29 2023 | ||||||||||||||
| Net sales | $ | $ | $ | ||||||||||||||
| Cost of sales | |||||||||||||||||
| Gross profit | |||||||||||||||||
| Operating expenses: | |||||||||||||||||
| Marketing and selling | |||||||||||||||||
| Administrative management, finance and information systems | |||||||||||||||||
| Goodwill impairment | |||||||||||||||||
| Research and development | |||||||||||||||||
| Total operating expenses | |||||||||||||||||
| Operating (loss) profit | ( | ( | |||||||||||||||
| Interest income | ( | ( | ( | ||||||||||||||
| Interest expense | |||||||||||||||||
| Other income, net | ( | ( | ( | ||||||||||||||
| (Loss) profit before income taxes | ( | ( | |||||||||||||||
| Income tax expense (benefit) | ( | ||||||||||||||||
| Net (loss) income | $ | ( | $ | ( | $ | ||||||||||||
| Weighted average common shares - Basic: | |||||||||||||||||
| Class A | |||||||||||||||||
| Class B | |||||||||||||||||
| Dilutive stock options and restricted stock units | |||||||||||||||||
| Weighted average common shares - Dilutive | |||||||||||||||||
| Net (loss) income per common share - Basic: | |||||||||||||||||
| Class A | $ | ( | $ | ( | $ | ||||||||||||
| Class B | $ | ( | $ | ( | $ | ||||||||||||
| Net (loss) income per common share - Diluted: | |||||||||||||||||
| Class A | $ | ( | $ | ( | $ | ||||||||||||
| Class B | $ | ( | $ | ( | $ | ||||||||||||
| Dividends declared per common share: | |||||||||||||||||
| Class A | $ | $ | $ | ||||||||||||||
| Class B | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of the Consolidated Financial Statements.
F-6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| Year Ended | |||||||||||||||||
(thousands, except per share data) | October 3 2025 | September 27 2024 | September 29 2023 | ||||||||||||||
| Net (loss) income | $ | ( | $ | ( | $ | ||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Foreign currency translation | |||||||||||||||||
| Unrealized (loss) gain on available-for-sale securities, net of tax | ( | ( | |||||||||||||||
| Change in pension plans, net of tax | |||||||||||||||||
| Total other comprehensive income (loss) | |||||||||||||||||
| Total comprehensive (loss) income | $ | ( | $ | ( | $ | ||||||||||||
The accompanying notes are an integral part of the Consolidated Financial Statements.
F-7
CONSOLIDATED BALANCE SHEETS
(thousands, except share data) | October 3 2025 | September 27 2024 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term investments | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventories, net | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
Property, plant and equipment, net of accumulated depreciation of $ | |||||||||||
| Right of use assets | |||||||||||
| Deferred income taxes | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Deferred compensation plan assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | |||||||||||
| Current lease liability | |||||||||||
| Accrued liabilities: | |||||||||||
| Salaries, wages and benefits | |||||||||||
| Accrued warranty | |||||||||||
| Income taxes payable | |||||||||||
| Accrued discounts and returns | |||||||||||
| Accrued customer programs | |||||||||||
| Other | |||||||||||
| Total current liabilities | |||||||||||
| Non-current lease liability | |||||||||||
| Deferred income taxes | |||||||||||
| Retirement benefits | |||||||||||
| Deferred compensation plan liability | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Shareholders' equity: | |||||||||||
Preferred stock: | |||||||||||
| Common stock: | |||||||||||
Class A shares issued and outstanding: | |||||||||||
Class B shares issued and outstanding: | |||||||||||
| Capital in excess of par value | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income | |||||||||||
Treasury stock at cost, shares of Class A common stock: | ( | ( | |||||||||
| Total shareholders' equity | |||||||||||
| Total liabilities and shareholders' equity | $ | $ | |||||||||
The accompanying notes are an integral part of the Consolidated Financial Statements.
F-8
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
| (thousands except for shares) | Shares | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | |||||||||||||||||||||||||||||
| BALANCE AT SEPTEMBER 30, 2022 | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Dividends declared | — | — | — | ( | — | — | |||||||||||||||||||||||||||||
| Issuance of stock under employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
| Award of non-vested shares | ( | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||
| B to A conversion | — | — | ( | — | — | ||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Unrealized gain (loss) on available-for-sale securities, net of tax | — | — | — | — | ( | — | |||||||||||||||||||||||||||||
| Change in pension plans, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Non-vested stock forfeitures | ( | — | — | — | ( | ||||||||||||||||||||||||||||||
| Purchase of treasury stock at cost | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
| BALANCE AT SEPTEMBER 29, 2023 | ( | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | |||||||||||||||||||||||||||||
| Dividends declared | — | — | — | ( | — | — | |||||||||||||||||||||||||||||
| Issuance of stock under employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
| Award of non-vested shares | ( | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Unrealized gain (loss) on available-for-sale securities, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Change in pension plans, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Non-vested stock forfeitures | ( | — | — | — | ( | ||||||||||||||||||||||||||||||
| Purchase of treasury stock at cost | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
| BALANCE AT SEPTEMBER 27, 2024 | ( | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | |||||||||||||||||||||||||||||
| Dividends declared | — | — | — | ( | — | — | |||||||||||||||||||||||||||||
| Issuance of stock under employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||
| Award of non-vested shares | ( | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||
| B to A conversion | — | — | ( | — | — | ||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Unrealized gain (loss) on available-for-sale securities, net of tax | — | — | — | — | ( | — | |||||||||||||||||||||||||||||
| Change in pension plans, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Non-vested stock forfeitures | ( | — | — | — | ( | ||||||||||||||||||||||||||||||
| Purchase of treasury stock at cost | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||
| BALANCE AT OCTOBER 3, 2025 | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of the Consolidated Financial Statements.
F-9
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended | |||||||||||||||||
| (thousands) | October 3 2025 | September 27 2024 | September 29 2023 | ||||||||||||||
| CASH PROVIDED BY OPERATING ACTIVITIES | |||||||||||||||||
| Net (loss) income | $ | ( | $ | ( | $ | ||||||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation | |||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||
| Amortization of deferred financing costs | |||||||||||||||||
| Loss (gain) on sale of productive assets | ( | ( | |||||||||||||||
| Impairment losses | |||||||||||||||||
| Stock based compensation | |||||||||||||||||
| Provision for credit losses | |||||||||||||||||
| Provision for inventory reserves | |||||||||||||||||
| Deferred income taxes | ( | ( | |||||||||||||||
| Change in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable, net | ( | ( | |||||||||||||||
| Inventories, net | ( | ||||||||||||||||
| Accounts payable and accrued liabilities | ( | ( | |||||||||||||||
| Other current assets | ( | ( | |||||||||||||||
| Other non-current assets | ( | ||||||||||||||||
| Other long-term liabilities | ( | ||||||||||||||||
| Other, net | ( | ( | |||||||||||||||
| CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES | |||||||||||||||||
| Payments for purchase of business | ( | ||||||||||||||||
| Purchase of short-term investments | ( | ( | |||||||||||||||
| Proceeds from maturities of short-term investments | |||||||||||||||||
| Capital expenditures | ( | ( | ( | ||||||||||||||
| Proceeds from sale of productive assets | |||||||||||||||||
| ( | ( | ||||||||||||||||
| CASH USED FOR FINANCING ACTIVITIES | |||||||||||||||||
| Debt issuance costs paid | ( | ||||||||||||||||
| Common stock transactions | |||||||||||||||||
| Dividends paid | ( | ( | ( | ||||||||||||||
| Purchases of treasury stock | ( | ( | ( | ||||||||||||||
| ( | ( | ( | |||||||||||||||
| Effect of foreign currency rate changes on cash | |||||||||||||||||
| Increase (decrease) in cash and cash equivalents | ( | ||||||||||||||||
| CASH AND CASH EQUIVALENTS | |||||||||||||||||
| Beginning of period | |||||||||||||||||
| End of period | $ | $ | $ | ||||||||||||||
| Supplemental Disclosure: | |||||||||||||||||
| Accrued dividends | $ | $ | $ | ||||||||||||||
| Non-cash treasury activity | |||||||||||||||||
| Cash (received) paid for taxes | ( | ||||||||||||||||
| Cash paid for interest | |||||||||||||||||
The accompanying notes are an integral part of the Consolidated Financial Statements.
F-10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 3, 2025
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Johnson Outdoors Inc. (the “Company”) is an integrated, global outdoor recreation products company engaged in the innovative design, manufacture and marketing of brand name camping, diving, watercraft and marine electronics products.
Principles of Consolidation
The consolidated financial statements include the accounts of Johnson Outdoors Inc. and all majority owned subsidiaries and are stated in conformity with U.S. generally accepted accounting principles. Intercompany accounts and transactions have been eliminated upon consolidation.
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and operating results and the disclosure of commitments and contingent liabilities. Actual results could differ significantly from those estimates.
Fiscal Year
The Company’s fiscal year ends on the Friday nearest September 30. The fiscal year ended October 3, 2025 (hereinafter 2025) comprised 53 weeks and the fiscal years ended September 27, 2024 (hereinafter 2024) and September 29, 2023 (hereinafter 2023) each comprised 52 weeks.
Cash, Cash Equivalents and Marketable Securities
The Company considers all short-term investments in interest bearing accounts and all securities and other instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents are stated at cost which approximates market value.
The Company maintains cash in bank accounts in excess of insured limits. The Company has not experienced any losses and does not believe that significant credit risk exists as a result of this practice.
As of October 3, 2025, the Company held approximately $69,015 of cash and cash equivalents in bank accounts in foreign jurisdictions.
The Company has classified all marketable securities as available-for-sale which requires the securities to be reported at estimated fair value, with unrealized gains and losses, net of tax, reported as a separate component of accumulated other comprehensive income in the accompanying Consolidated Statements of Shareholders' Equity. Amortization of premium or discount is reported as Interest income in the accompanying Consolidated Statements of Operations.
| Amortized Cost | Fair Value | Gross unrealized gains | Gross unrealized losses | ||||||||||||||||||||
| Fixed rate US Government Bonds | $ | $ | $ | $ | |||||||||||||||||||
| Fixed rate Canadian Government Bonds | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
F-11
Proceeds from the maturities of available-for-sale securities were $16,316 , $27,025 , and $0 during the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. During the year ended September 27, 2024, $2,218 of investments were purchased with proceeds from maturities. There were no other sales or purchases of available-for-sale securities for the years ended October 3, 2025, September 27, 2024 and September 29, 2023. There were no
At September 27, 2024 contractual maturities were all within one year from the period end and therefore were classified as Short-Term Investments on the Consolidated Balance Sheets. See Note 4 "Fair Value Measurements" for further discussion.
Accounts Receivable
Contractual accounts receivable was $51,686 and $44,192 , with an allowance for credit losses of $1,232 and $3,543 , as of October 3, 2025 and September 27, 2024, respectively. See Note 15 "Valuation and Qualifying Accounts" for activity related to the allowance for credit losses during the year.
Inventories
Inventories at the end of the respective fiscal years consisted of the following:
| October 3 2025 | September 27 2024 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Finished goods | |||||||||||
| $ | $ | ||||||||||
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation of property, plant and equipment is determined by straight-line methods over the following estimated useful lives:
| Property improvements | |||||
| Buildings and improvements | |||||
| Furniture and fixtures, equipment and computer software | |||||
Upon retirement or disposition of any of the foregoing types of assets, cost and the related accumulated depreciation are removed from the applicable account and any resulting gain or loss is recognized in the statements of operations.
Property, plant and equipment at the end of the respective years consisted of the following:
F-12
| 2025 | 2024 | ||||||||||
| Property improvements | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Furniture and fixtures, equipment and computer software | |||||||||||
| Less accumulated depreciation | |||||||||||
| $ | $ | ||||||||||
Depreciation expense for the Company was $20,044 , $19,269 , and $16,005 for the fiscal years ended October 3, 2025, September 27, 2024, and September 29, 2023, respectively.
Goodwill
The Company applies a fair value-based impairment test to the carrying value of goodwill on an annual basis as of the last day of the eleventh month of the Company’s fiscal year and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. The Company can elect to perform a quantitative or qualitative test of impairment.
The Company performed a quantitative impairment assessment for goodwill for fiscal years 2025, 2024 and 2023. In conducting its analysis, the Company uses the income approach, through the use of a discounted cash flow model, to compare the reporting unit’s carrying value to its indicated fair value. The discounted cash flow model used to estimate the fair value of a reporting unit requires considerable management judgment to determine the key assumptions and is considered a Level 3 (unobservable) fair value determination in the fair value hierarchy (see Note 4 below).
During the fourth quarter of fiscal 2024, the Company's annual goodwill impairment test indicated the carrying value of the Fishing reporting unit exceeded its estimated fair value as of the measurement date of August 30, 2024. As a result, the Company recognized a goodwill impairment charge in the fourth quarter of fiscal 2024 of $11,173 , which was recorded in "Goodwill Impairment" in the accompanying Consolidated Statements of Operations in the Fishing segment, thereby reducing the carrying value of this goodwill to $0 . This non-cash impairment was primarily driven by reduced cash flow projections in the Fishing reporting unit, prompted by ongoing market challenges and competitive pressure.
The changes in the carrying amount and the composition of the Company's goodwill for fiscal 2025 and 2024 were as follows:
| Fishing | Camping & Watercraft | Diving | Total | ||||||||||||||||||||||||||
| Balance at September 29, 2023 | |||||||||||||||||||||||||||||
| Goodwill | $ | $ | $ | $ | |||||||||||||||||||||||||
| Accumulated impairment losses | ( | ( | ( | ( | |||||||||||||||||||||||||
| Currency translation | |||||||||||||||||||||||||||||
| Impairment loss | ( | ( | |||||||||||||||||||||||||||
| Balance at September 27, 2024 | |||||||||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||||||||
| Accumulated impairment losses | ( | ( | ( | ( | |||||||||||||||||||||||||
| Acquisition | |||||||||||||||||||||||||||||
| Currency translation | |||||||||||||||||||||||||||||
| Balance at October 3, 2025 | |||||||||||||||||||||||||||||
| Goodwill | |||||||||||||||||||||||||||||
| Accumulated impairment losses | ( | ( | ( | ( | |||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||
See Note 17 "Acquisitions" for further discussion regarding the acquisition of goodwill during the year ended October 3, 2025.
F-13
Other Intangible Assets
Indefinite-lived intangible assets are also tested for impairment annually and, if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. There were no
Intangible assets at the end of the last two years consisted of the following:
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Gross Intangible | Accumulated Amortization | Net | Gross Intangible | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||
| Amortized other intangible assets: | |||||||||||||||||||||||||||||||||||
| Patents and trademarks | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Other amortizable intangibles | ( | ( | |||||||||||||||||||||||||||||||||
| Non-amortized trademarks | |||||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Impairment of Long-Lived Assets
The Company reviews long-lived assets for impairment whenever events or changes in business circumstances, such as unplanned negative cash flow, indicate that the carrying amount of these assets may not be fully recoverable. In such an event, the carrying amount of the asset group is compared to the future undiscounted cash flows expected to be generated by the asset group to determine if impairment exists on these assets. If impairment is determined to exist, any related impairment loss is calculated based on the difference between the fair value and the carrying value on these assets. During the fourth quarter of fiscal 2024, the Company determined that indicators of potential impairment of long-lived assets were present in the Watercraft and Fishing segments, and, as a result, the Company performed an analysis of future undiscounted cash flows, which exceeded the carrying value of the respective asset groups. Therefore, it was determined there was no impairment of any long-lived assets during fiscal 2024. During the fourth quarters of fiscal 2025 and 2023, the Company determined it was not necessary to perform an impairment analysis, as there were no events or changes in business circumstances that indicated that the carrying amount of the assets may not be fully recoverable. Accordingly, there was no
Warranties
| Balance at September 30, 2022 | $ | ||||
| Expense accruals for warranties issued during the period | |||||
| Less current period warranty claims paid | ( | ||||
| Balance at September 29, 2023 | $ | ||||
| Expense accruals for warranties issued during the period | |||||
| Less current period warranty claims paid | ( | ||||
| Balance at September 27, 2024 | $ | ||||
| Expense accruals for warranties issued during the period | |||||
| Less current period warranty claims paid | ( | ||||
| Balance at October 3, 2025 | $ | ||||
F-14
Accumulated Other Comprehensive Income
The components of Accumulated other comprehensive income ("AOCI") on the accompanying Consolidated Balance Sheets as of the end of fiscal year 2025, 2024 and 2023 were as follows:
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Pre-Tax Amount | Tax Effect | Net of Tax Effect | Pre-Tax Amount | Tax Effect | Net of Tax Effect | Pre-Tax Amount | Tax Effect | Net of Tax Effect | |||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Unrealized loss on available-for-sale securities | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Unamortized loss on pension plans | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated other comprehensive income | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
The reclassifications out of AOCI for the years ended October 3, 2025, September 27, 2024, and September 29, 2023 were as follows:
| 2025 | 2024 | 2023 | Statement of Operations Presentation | |||||||||||||||||||||||
| Unamortized loss on defined benefit pension plans | ||||||||||||||||||||||||||
| Amortization of loss | $ | $ | $ | Cost of sales / Operating expense | ||||||||||||||||||||||
| Tax effects | ( | ( | ( | Income tax expense | ||||||||||||||||||||||
| Total reclassifications for the period | $ | $ | $ | |||||||||||||||||||||||
The changes in AOCI by component, net of tax, for the year ended October 3, 2025 were as follows:
| Foreign Currency Translation Adjustment | Unrealized gain (loss) on available-for-sale securities | Unamortized Loss on Defined Benefit Pension Plans | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
| Balance at September 27, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||
| Other comprehensive income before reclassifications | ( | ||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | |||||||||||||||||||||||
| Tax effects | ( | ||||||||||||||||||||||
| Balance at October 3, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||
The changes in AOCI by component, net of tax, for the year ended September 27, 2024 were as follows:
F-15
| Foreign Currency Translation Adjustment | Unrealized gain (loss) on available-for-sale securities | Unamortized Loss on Defined Benefit Pension Plans | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
| Balance at September 29, 2023 | $ | $ | ( | $ | ( | $ | |||||||||||||||||
| Other comprehensive income before reclassifications | |||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | |||||||||||||||||||||||
| Tax effects | ( | ( | ( | ||||||||||||||||||||
| Balance at September 27, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||
Earnings per Share (“EPS”)
Net income or loss per share of Class A common stock and Class B common stock is computed using the two-class method. Grants of restricted stock (whether vested or unvested) which receive non-forfeitable dividends are required to be included as part of the basic weighted average share calculation under the two-class method.
Holders of Class A common stock are entitled to cash dividends equal to 110 % of all dividends declared and paid on each share of Class B common stock. The Company grants shares of unvested restricted stock in the form of Class A shares, which carry the same distribution rights as the Class A common stock described above. As such, the undistributed earnings for each period are allocated to each class of common stock based on the proportionate share of the amount of cash dividends that each such class is entitled to receive.
Basic EPS
Basic net income or loss per share is computed by dividing net income or loss allocated to Class A common stock and Class B common stock by the weighted-average number of shares of Class A common stock and Class B common stock outstanding, respectively. In periods with cumulative year to date net income and undistributed income, the undistributed income for each period is allocated to each class of common stock based on the proportionate share of the amount of cash dividends that each such class is entitled to receive. In periods where there is a cumulative year to date net loss or no undistributed income because distributions through dividends exceed net income, Class B shares are treated as anti-dilutive and, therefore, net losses are allocated equally on a per share basis among all participating securities.
For the years ended October 3, 2025 and September 27, 2024, basic net loss per share for Class A and Class B shares was the same because there were no
Diluted EPS
Diluted net income per share is computed by dividing allocated net income by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options, restricted stock units and non-vested restricted stock. Anti-dilutive stock options, restricted stock units and non-vested stock are excluded from the calculation of diluted EPS. The computation of diluted net income per share of Class A common stock assumes that Class B common stock is converted into Class A common stock. Therefore, diluted net income per share is the same for both Class A and Class B common shares. In periods where the Company reports a net loss or no undistributed income because distributions through dividends exceed net income, the effect of anti-dilutive stock options, restricted stock units and non-vested stock is excluded and diluted loss per share is equal to basic loss per share.
For the years ended October 3, 2025 and September 27, 2024, the effect of non-vested restricted stock units is excluded from the diluted loss per share calculation as their inclusion would have been anti-dilutive. For the year ended September 29, 2023, diluted net income per share reflects the effect of dilutive stock options and restricted stock units and assumes the conversion of Class B common stock into Class A common stock.
Shares of non-vested stock that could potentially dilute earnings per share in the future which were not included in the fully diluted computation because they would have been anti-dilutive totaled 84,167 , 67,285 and 63,506 shares for the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. Stock units that could potentially dilute earnings per share in the future and which were not included in the fully diluted computation because they would have been anti-dilutive totaled 93,214 , 70,715 and 49,531 shares for the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively.
F-16
The following table sets forth a reconciliation of net income to dilutive earnings used in the diluted earnings per common share calculations and the computation of basic and diluted earnings per common share:
| 2025 | 2024 | 2023 | |||||||||||||||
Net (loss) income | $ | ( | $ | ( | $ | ||||||||||||
Less: Undistributed loss (earnings) reallocated to non-vested shareholders | ( | ||||||||||||||||
Dilutive (loss) earnings | $ | ( | $ | ( | $ | ||||||||||||
| Weighted average common shares – Basic: | |||||||||||||||||
| Class A | |||||||||||||||||
| Class B | |||||||||||||||||
Dilutive restricted stock units | |||||||||||||||||
| Weighted average common shares - Dilutive | |||||||||||||||||
Net (loss) income per common share – Basic: | |||||||||||||||||
| Class A | $ | ( | $ | ( | $ | ||||||||||||
| Class B | $ | ( | $ | ( | $ | ||||||||||||
Net (loss) income per common share – Diluted: | |||||||||||||||||
| Class A | $ | ( | $ | ( | $ | ||||||||||||
| Class B | $ | ( | $ | ( | $ | ||||||||||||
Stock-Based Compensation
Stock-based compensation cost is recorded for all awards of non-vested stock and restricted stock units based on their grant-date fair value. Stock-based compensation expense is recognized on a straight-line basis over the vesting period of each award. See Note 10 of these Notes to Consolidated Financial Statements for information regarding the Company’s stock-based incentive plans, including non-vested stock, restricted stock units and employee stock purchase plans.
Income Taxes
The Company provides for income taxes currently payable and deferred income taxes resulting from temporary differences between financial statement income/loss and taxable income/loss. Accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. Deferred income tax assets and liabilities are determined based on the difference between the amounts reported in the financial statements and the tax basis of assets and liabilities, using enacted tax rates in effect in the years in which the differences are expected to reverse. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. A valuation allowance is established if it is more likely than not that some portion or all of a deferred income tax asset will not be realized. See Note 6 of these Notes to Consolidated Financial Statements for further discussion.
Employee Benefits
The Company and certain of its subsidiaries have various retirement and profit sharing plans. The Company does not have any significant foreign retirement plans. Retirement costs are funded at least annually. See Note 7 of these Notes to Consolidated Financial Statements for additional discussion.
Foreign Operations and Related Derivative Financial Instruments
The functional currencies of the Company’s foreign operations are the local currencies. Accordingly, assets and liabilities of foreign operations are translated into U.S. dollars at the rate of exchange existing at the end of the year. Results of operations are translated at monthly average exchange rates. Adjustments resulting from the translation of foreign currency financial statements are classified as “Accumulated other comprehensive income (loss),” a separate component of Shareholders’ equity.
F-17
Because the Company operates internationally, it has exposure to market risk from movements in foreign currency exchange rates. Approximately 13 % of the Company’s revenues for the year ended October 3, 2025 were denominated in currencies other than the U.S. dollar. Approximately 6 % were denominated in euros and approximately 5 % were denominated in Canadian dollars, with the remaining 2 % denominated in various other foreign currencies. The Company may mitigate the impact on its operating results of a portion of the fluctuations in certain foreign currencies through the purchase of foreign currency swaps, forward contracts and options to hedge known commitments denominated in foreign currencies or borrowings in foreign currencies. The Company did not use foreign currency forward contracts in 2025, 2024 or 2023. The Company does not enter into foreign exchange contracts for trading or speculative purposes.
Advertising & Promotions
The Company expenses substantially all costs related to the production of advertising the first time the advertising takes place. Cooperative promotional arrangements are accrued as related revenue is earned.
Advertising and promotions expense in 2025, 2024 and 2023 totaled $34,890 , $44,732 and $35,503 , respectively. These charges are included in “Marketing and selling expenses.” Capitalized advertising costs, included in Other current assets, totaled $488 and $413 at October 3, 2025 and September 27, 2024, respectively, and primarily included catalogs and costs of advertising which have not yet run for the first time.
Shipping and Handling Costs
Research and Development
Fair Values
The carrying amounts of cash, cash equivalents, short-term investments, accounts receivable, and accounts payable approximated fair value at October 3, 2025 and September 27, 2024 due to the short maturities of these instruments. During 2025, 2024 and 2023, the Company held investments in equity and debt securities that were carried at fair value related to its deferred compensation liability which was also carried at the same fair value. When indicators of impairment are present, the Company may be required to value certain long-lived assets such as property, plant, and equipment, and other intangibles at fair value.
Valuation Techniques
Rabbi Trust Assets
Rabbi trust assets, used to fund amounts the Company owes to certain officers and other employees under the Company’s non-qualified deferred compensation plan, are included in “Other assets,” and are classified as trading securities. These assets are comprised of marketable debt and equity securities that are marked to fair value based on unadjusted quoted prices in active markets.
Marketable Securities
Marketable securities, which are included in "Short-term Investments" and "Investments," based on maturity date, are classified as available-for-sale securities. These assets are comprised of marketable debt securities, with fair values determined using significant other observable inputs, which include quoted prices in markets that are not active, quoted prices of similar securities, recently executed transactions, broker quotations, and other inputs that are observable.
Goodwill and Other Intangible Assets
In assessing the recoverability of the Company’s goodwill and other intangible assets, the Company estimates the future discounted cash flows of the business segments to which the goodwill relates. When estimated future discounted cash flows are
F-18
less than the carrying value of the net assets and related goodwill, an impairment charge is recognized based on the excess of the carrying amount over the fair value. In determining estimated future cash flows, the Company makes assumptions regarding anticipated financial position, future earnings and other factors to determine the fair value of the respective assets.
See Note 4 of these Notes to Consolidated Financial Statements for disclosures regarding fair value measurements.
New Accounting Pronouncements
Recently issued accounting pronouncements
In November 2023, the Financial Account Standards Board (FASB), issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 is intended to improve the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The amendments in this ASU do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments to this standard apply to all public entities that are required to report segment information in accordance with Topic 280, Segment Reporting and are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this guidance for the year ending October 3, 2025 and subsequent interim periods. The adoption of this standard did not impact the Company’s results of operations or financial position. See Note 13 Segments of Business for the new disclosures required by the standard.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses: Measurement of Credit Losses for
Accounts Receivable and Contract Assets (Topic 326). The update permits entities to elect a practical expedient for estimating
expected credit losses on current trade receivables and current contract assets by assuming that conditions existing at the
balance sheet date will remain unchanged over the life of those assets. The updated standard is effective for fiscal years
beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted. The
Company is currently assessing the impact of the amendment to this standard on its consolidated financial statements.
In November 2024, the FASB, issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. ASU 2024-03 is intended to improve disclosures about a public business entity's expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions. In January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) Clarifying the Effective Date, which is intended to clarify the effective date of ASU No. 2024-03. As clarified in ASU 2025-01, the new guidance is effective for annual reporting periods beginning after December 15, 2026 with early adoption permitted. While we anticipate that the adoption of this standard will require additional disclosures, the Company is currently assessing the impact of the amendment to this standard on its consolidated financial statements.
In December 2023, the FASB, issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for the Company in fiscal 2026 on a prospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures, but this standard update will not have an impact on the Company's results of operations or financial position.
2 INDEBTEDNESS
The Company had no
Revolvers
The Company and certain of its subsidiaries have entered into an unsecured revolving credit facility with PNC Bank, National Association and Associated Bank, N.A. ("the Lending Group"). This credit facility consists of a $75 million Revolving Credit
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Facility among the Company, certain of the Company's subsidiaries, PNC Bank National Association, as lender and as administrative agent, and the other lender named therein (the "Credit Agreement" or "Revolver"). The Revolver provides for borrowing of up to an aggregate principal amount not to exceed $75,000 with a $50,000 accordion feature that gives the Company the option to increase the maximum financing availability (i.e., an aggregate borrowing amount of $125,000 ) subject to the conditions of the Credit Agreement and subject to the approval of the lenders. On July 15, 2021, the Company entered into a First Amendment to this credit facility that extended its expiration date from November 15, 2022, to July 15, 2026. Other key provisions of the credit facility remained as outlined above and the description herein is qualified in its entirety by the terms and conditions of the original Debt Agreement (a copy of which was filed as Exhibit 99.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on November 20, 2017) and the Amendment (a copy of which was filed as Exhibit 10.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on July 16, 2021).
On January 29, 2025, the Company entered into a Second Amendment to this credit facility that reduced the Revolver to $50,000 (but maintained the accordion feature) and modified the terms of the Credit Agreement as disclosed below for the period from the amendment date until the earlier of (1) the Company’s compliance with both a 3.00 x maximum leverage ratio and a 3.50 x minimum interest coverage ratio for the trailing twelve month period or (2) delivery of the Company’s fiscal 2025 financial statements and compliance certificate (the “Second Amendment Period”):
•suspension of application of the maximum leverage and minimum interest coverage ratios during the Second Amendment Period;
•the Company and its subsidiaries must maintain a $50,000 minimum cash balance;
•acquisition, dividends, repurchases and distributions permitted, provided the Company and its subsidiaries maintain a $50,000 minimum cash balance;
•monthly financial reporting if the facility availability is less than or equal to 95 %; and
•the granting of a security interest in the Company’s personal property assets if the facility availability is less than or equal to 95 %.
Other key provisions of the credit facility remained as outlined herein and the description herein is qualified in its entirety by the terms and conditions of the original Credit Agreement (a copy of which was filed as Exhibit 99.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on November 20, 2017), the First Amendment, (a copy of which was filed as Exhibit 10.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on July 16, 2021), and the aforementioned Second Amendment (a copy of which was filed as Exhibit 10.1 to the quarterly report on Form 10-Q dated and filed with the Securities and Exchange Commission on February 3, 2025).
The interest rate on the Revolver is based on the Secured Overnight Financing Rate ("SOFR") plus an applicable margin, which margin resets each quarter. The applicable margin ranges from 1.00 % to 1.75 % and is dependent on the Company's leverage ratio for the trailing twelve month period. The interest rates on the Revolver were approximately 5.2 % at October 3, 2025 and 6.0 % at September 27, 2024.
The Credit Agreement restricts the Company's ability to incur additional debt, includes maximum leverage ratio and minimum interest coverage ratio covenants and is unsecured.
Subsequent to year-end, effective as of December 9, 2025, the Company entered into a Second Amended and Restated Credit Agreement with its lenders. A description of the terms of the new revolving credit facility is set forth under Item 9B of the Company’s Form 10-K for the fiscal year ending October 3, 2025.
Other Borrowings
The Company utilizes letters of credit primarily as security for the payment of future claims under its workers’ compensation insurance which totaled $67 and $67 at October 3, 2025 and September 27, 2024, respectively. The Company had no
Under the Company’s Credit Agreement, a change in control of the Company would constitute an event of default. A change in control would be deemed to have occurred if, among other events described in the terms of the Credit Agreement, a person or group other than the Company’s Chief Executive Officer, Helen P. Johnson-Leipold, members of her family and related entities (hereinafter the Johnson Family) became or obtained rights as a beneficial owner (as interpreted under the Securities Exchange Act of 1934) of a certain minimum percentage of the outstanding capital stock of the Company.
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3 RESERVED
4 FAIR VALUE MEASUREMENTS
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy has been established based on three levels of inputs, of which the first two are considered observable and the last unobservable.
•Level 1 - Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.
•Level 2 - Inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available pricing sources for comparable instruments.
•Level 3 - Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own assumptions of the data that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.
The carrying value of accounts receivable and accounts payable approximate fair value because of the short-term maturity of those instruments.
The following table summarizes the Company’s financial assets measured at fair value as of October 3, 2025:
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Rabbi trust assets | $ | $ | $ | $ | |||||||||||||||||||
| Marketable securities | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The following table summarizes the Company’s financial assets measured at fair value as of September 27, 2024:
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Rabbi trust assets | $ | $ | $ | $ | |||||||||||||||||||
| Marketable securities | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Rabbi trust assets are classified as trading securities and are comprised of marketable debt and equity securities that are marked to fair value based on unadjusted quoted prices in active markets. The rabbi trust assets are owed by the Company to certain officers and other employees under the Company’s non-qualified deferred compensation plan. These assets are included in "Other assets" in the Company's Consolidated Balance Sheets, and the mark-to-market adjustments on the assets are recorded in “Other income, net” in the accompanying Consolidated Statements of Operations. The offsetting deferred compensation liability is also reported at fair value and is included in “Deferred compensation liability” in the Company’s Consolidated Balance Sheets. Changes in the liability are recorded in "Administrative management, finance and information systems" expense in the accompanying Consolidated Statements of Operations.
Marketable securities are classified as available-for-sale, with fair values determined using significant other observable inputs, which include quoted prices in markets that are not active, quoted prices of similar securities, recently executed transactions, broker quotations, and other inputs that are observable.
The effect of changes in the fair value of financial instruments on the Consolidated Statements of Operations for the years ended October 3, 2025, September 27, 2024 and September 29, 2023 was:
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| Location of income recognized in Statement of Operations | 2025 | 2024 | 2023 | ||||||||||||||||||||
| Rabbi trust assets | Other (income) expense, net | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Certain assets and liabilities are measured at fair value on a non-recurring basis in periods subsequent to their initial recognition. No
5 LEASES
The Company determines if an arrangement is a lease at inception. The Company leases certain facilities and machinery and equipment under long-term, non-cancelable operating leases. As an ongoing accounting policy election under Topic 842, the Company excludes short-term leases (terms of 12 months or less) from the balance sheet presentation and accounts for non-lease and lease components in a contract as a single lease component for most asset classes. All leases in which the Company is the lessee are classified as operating leases, and the Company does not have any finance leases or sublease agreements. Additionally, the Company does not have any leases in which it is the lessor.
As of October 3, 2025, the Company had approximately 200 leases, with remaining terms ranging from less than one year to 16 years. Some of the leases contain variable payment terms, such as payments based on fluctuations in the Consumer Price Index (CPI). Variable lease payments are expensed in the period in which the obligation for those payments was incurred. Some leases also contain options to extend or terminate the lease. To the extent the Company is reasonably certain to exercise these options, they have been considered in the calculation of the right-of-use ("ROU") assets and lease liabilities. Under current lease agreements, there are no residual value guarantees or restrictive lease covenants. In calculating the ROU assets and lease liabilities, several assumptions and judgments were made by the Company, including whether a contract is or contains a lease under the new definition, and the determination of the discount rate, which is assumed to be the incremental borrowing rate. The incremental borrowing rate is derived from information available to the Company at the lease commencement date based on lease length and location.
As of October 3, 2025, the components of lease expense recognized in the accompanying Consolidated Statements of Operations were as follows:
| Year ended | Year ended | Year ended | ||||||||||||||||||
| October 3, 2025 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||
| Lease Cost | ||||||||||||||||||||
| Operating lease costs | $ | $ | $ | |||||||||||||||||
| Short-term lease costs | ||||||||||||||||||||
| Variable leases costs | ||||||||||||||||||||
| Total lease cost | $ | $ | $ | |||||||||||||||||
Included in the amounts in the table above was rent expense to related parties of $1,278 , $1,255 and $1,255 , for the years ended October 3, 2025 September 27, 2024, and September 29, 2023, respectively.
As of October 3, 2025 and September 27, 2024, the Company did not have any finance leases. While the Company extended or renewed various existing leases during the year, there were no significant new leases entered into during the year ended October 3, 2025. As of October 3, 2025, the Company did not have any significant operating lease commitments that have not yet commenced.
Supplemental balance sheet, cash flow, and other information related to operating leases was as follows:
F-22
| Year ended | Year ended | |||||||||||||||||||
| October 3, 2025 | September 27, 2024 | |||||||||||||||||||
| Operating leases: | ||||||||||||||||||||
| Operating lease ROU assets | $ | $ | ||||||||||||||||||
| Current operating leases liabilities | ||||||||||||||||||||
| Non-current operating lease liabilities | ||||||||||||||||||||
| Total operating lease liabilities | $ | $ | ||||||||||||||||||
| Weighted average remaining lease term (in years) | ||||||||||||||||||||
| Weighted average discount rate | % | % | ||||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | $ | ||||||||||||||||||
| ROU assets obtained in exchange for lease liabilities | $ | $ | ||||||||||||||||||
Future minimum rental commitments under non-cancelable operating leases with an initial lease term in excess of one year at October 3, 2025 were as follows:
| Year | Related parties included in total | Total | |||||||||
| 2026 | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| Thereafter | |||||||||||
| Total undiscounted lease payments | |||||||||||
| Less: Imputed interest | ( | ( | |||||||||
| Total net lease liability | $ | $ | |||||||||
6 INCOME TAXES
The U.S. and foreign income before income taxes for the respective years consisted of the following:
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | ( | $ | ( | $ | ||||||||||||
| Foreign | |||||||||||||||||
| $ | ( | $ | ( | $ | |||||||||||||
Income tax expense for the respective years consisted of the following:
F-23
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | $ | $ | ||||||||||||||
| State | |||||||||||||||||
| Foreign | |||||||||||||||||
| Deferred | ( | ( | |||||||||||||||
| $ | $ | ( | $ | ||||||||||||||
The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at the end of the respective years are presented below:
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Inventories | $ | $ | |||||||||
| Compensation | |||||||||||
Lease liabilities | |||||||||||
| Tax credit carryforwards | |||||||||||
| Net operating loss carryforwards | |||||||||||
| Research and Experimental Expenditures | |||||||||||
| Other | |||||||||||
| Total gross deferred tax assets | |||||||||||
| Less valuation allowance | |||||||||||
| Deferred tax assets | |||||||||||
| Deferred tax liabilities: | |||||||||||
| Goodwill and other intangibles | |||||||||||
Right of Use assets | |||||||||||
| Depreciation and amortization | |||||||||||
| Foreign statutory reserves | |||||||||||
| Net deferred tax assets | $ | $ | |||||||||
The net deferred tax assets recorded in the accompanying Consolidated Balance Sheets as of the years ended October 3, 2025 and September 27, 2024 were as follows:
| 2025 | 2024 | ||||||||||
| Non-current assets | $ | $ | |||||||||
| Non-current liabilities | |||||||||||
| Net deferred tax assets | $ | $ | |||||||||
The significant differences between the statutory federal tax rate and the effective income tax rates for the Company for the respective years shown below were as follows:
F-24
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Statutory U.S. federal income tax rate | % | % | % | |||||||||||||||||
| State income tax, net of federal benefit | % | % | % | |||||||||||||||||
| Uncertain tax positions, net of settlements | % | % | ( | % | ||||||||||||||||
| Foreign-derived intangible income ("FDII") deduction | % | % | ( | % | ||||||||||||||||
| Foreign tax rate differences | ( | % | ( | % | % | |||||||||||||||
| Compensation | ( | % | ( | % | % | |||||||||||||||
| Changes in estimates related to prior years tax return filing | % | ( | % | ( | % | |||||||||||||||
| Goodwill impairment | % | ( | % | % | ||||||||||||||||
| Deferred tax asset - valuation allowance | ( | % | % | % | ||||||||||||||||
| Tax Credits | % | % | ( | % | ||||||||||||||||
| Other | ( | % | ( | % | % | |||||||||||||||
| ( | % | % | % | |||||||||||||||||
The Company considered both positive and negative evidence in evaluating the need for a valuation allowance relating to the deferred tax assets of the U.S. tax jurisdiction. Based on projections for the U.S. tax jurisdictions the Company determined that it was more likely than not that certain deferred tax assets will not be realized and a valuation allowance balance of $25,880 was reported against the net deferred tax assets for the U.S.
The Company’s net operating loss carryforwards and their expirations as of October 3, 2025 were as follows:
| State | Foreign | Total | |||||||||||||||
| Year of expiration | |||||||||||||||||
| 2026-2030 | $ | $ | $ | ||||||||||||||
| 2031-2035 | |||||||||||||||||
| 2036-2040 | |||||||||||||||||
| 2041-2045 | |||||||||||||||||
| Indefinite | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
The Company has tax credit carryforwards as follows:
| State | Federal | Total | |||||||||||||||
| Year of expiration | |||||||||||||||||
| 2026-2030 | $ | $ | $ | ||||||||||||||
| 2031-2035 | |||||||||||||||||
| 2036-2040 | |||||||||||||||||
| 2041-2045 | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
| 2025 | 2024 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| Gross increases - tax positions in prior period | |||||||||||
| Gross decreases - tax positions in prior period | |||||||||||
| Gross increases - tax positions in current period | |||||||||||
| Settlements | |||||||||||
| Lapse of statute of limitations | ( | ( | |||||||||
| Ending balance | $ | $ | |||||||||
F-25
The total accrued interest and penalties with respect to income taxes was $2,022 and $2,014 for the years ended October 3, 2025 and September 27, 2024, respectively. The Company’s liability for unrecognized tax benefits as of October 3, 2025 was $5,842 , and if recognized, $4,934 of such amount would have an effective tax rate impact.
In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. Interest and penalties of $8 , $101 and $47 were recorded as a component of income tax expense in the accompanying Consolidated Statements of Operations during fiscal years 2025, 2024 and 2023, respectively.
The Company’s policy is to remit earnings from foreign subsidiaries only to the extent the remittance does not result in an incremental U.S. tax liability. The Company does not currently provide for the additional U.S. and foreign income taxes which would become payable upon remission of undistributed earnings of foreign subsidiaries. If all undistributed earnings were remitted, an additional income tax provision of approximately $6.1 million would have been necessary as of October 3, 2025.
The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The amount of unrecognized tax benefits recognized within the next twelve months may decrease due to expiration of the statute of limitations for certain years in various jurisdictions. The Company is under examination in Germany for fiscal years 2018, 2019, 2020, and 2021 with anticipated completion next fiscal year with no material adjustments. It is possible in the future that other jurisdictions may open an audit prior to the statute expiring that may result in adjustments to the Company’s tax filings. At this time, an estimate of the range of the reasonably possible change cannot be made.
The following tax years remain subject to examination by the Company's respective major tax jurisdictions:
| Jurisdiction | Fiscal Years | ||||
| United States | 2022-2025 | ||||
| Canada | 2021-2025 | ||||
| France | 2021-2025 | ||||
| Germany | 2019-2025 | ||||
| Italy | 2023-2025 | ||||
| Switzerland | 2015-2025 | ||||
7 EMPLOYEE BENEFITS
A majority of the Company’s full-time employees are covered by defined contribution programs. Expenses attributable to the defined contribution programs were approximately $2,136 , $2,187 and $2,190 for 2025, 2024 and 2023, respectively.
The Company also has a non-qualified deferred compensation plan that provides certain officers and employees the ability to defer a portion of their compensation until a later date. The deferred amounts and earnings thereon are payable to participants, or designated beneficiaries, at specified future dates upon retirement, death or termination of employment from the Company. The deferred compensation liability, which is reported at fair value equal to the related rabbi trust assets, and is classified as “Deferred compensation liability” on our accompanying Consolidated Balance Sheets, was approximately $30,681 and $29,092 as of October 3, 2025 and September 27, 2024, respectively. See “Note 4 Fair Value Measurements” for additional information.
8 PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of preferred stock in various classes and series, of which there are no ne currently issued and no ne outstanding.
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9 COMMON STOCK
The number of authorized and outstanding shares of each class of the Company’s common stock at the end of the respective years was as follows:
| 2025 | 2024 | ||||||||||
Class A, $ | |||||||||||
| Authorized | |||||||||||
| Outstanding | |||||||||||
Class B, $ | |||||||||||
| Authorized | |||||||||||
| Outstanding | |||||||||||
Holders of Class A common stock are entitled to elect 25 %, or the next highest whole number, of the members of the Company’s Board of Directors and holders of Class B common stock are entitled to elect the remaining directors. With respect to matters other than the election of directors or any matters for which class voting is required by law, holders of Class A common stock are entitled to one vote per share while holders of Class B common stock are entitled to ten votes per share. If any dividends (other than dividends paid in shares of the Company’s stock) are paid by the Company on its common stock, a dividend would be paid on each share of Class A common stock equal to 110 % of the amount paid on each share of Class B common stock. Each share of Class B common stock is convertible at any time into one share of Class A common stock. During 2025 and 2024 there were 1,550 and 0 shares of Class B common stock converted into Class A common stock, respectively.
10 STOCK-BASED COMPENSATION AND STOCK OWNERSHIP PLANS
The Company’s current stock ownership plans provide for issuance of options to acquire shares of Class A common stock by key executives and non-employee directors. Current plans also allow for issuance of shares of restricted stock, restricted stock units or stock appreciation rights in lieu of options.
Under the Company’s 2023 Non-Employee Director Stock Ownership Plan and the 2020 Long-Term Incentive Plan (the only plans where shares currently remain available for future equity incentive awards) there were a total of 284,109 shares of the Company’s Class A common stock available for grant to key executives and non-employee directors at October 3, 2025. Share awards previously made under the Company's 2010 Long-Term Stock Incentive Plan and 2012 Non-Employee Director Stock Ownership Plan, which no longer allow for additional share grants, also remain outstanding.
The Company recognized additional tax expense of $207 and $351 , and $95 for 2025, 2024, and 2023, respectively, from the vesting of restricted stock and restricted stock units. These amounts were recorded as a component of income tax (benefit) expense. The Company recognizes forfeitures of non-vested equity awards as incurred.
Non-Vested Stock
All outstanding shares of non-vested stock awarded by the Company have been granted at their fair market value on the date of grant and vest within five years after the grant date. The fair value at date of grant is based on the number of shares granted and the average of the Company’s high and low Class A common stock price on the date of grant or, if the Company’s shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock price on the last preceding date on which the Company’s shares traded.
A summary of non-vested stock activity for the two year period ended October 3, 2025 related to the Company’s stock ownership plans is as follows:
F-27
| Shares | Weighted Average Grant Price | ||||||||||
| Non-vested stock at September 29, 2023 | $ | ||||||||||
| Non-vested stock grants | |||||||||||
| Non-vested stock vested | ( | ||||||||||
| Restricted stock forfeited | ( | ||||||||||
| Non-vested stock at September 27, 2024 | |||||||||||
| Non-vested stock grants | |||||||||||
| Non-vested stock vested | ( | ||||||||||
| Restricted stock forfeited | ( | ||||||||||
| Non-vested stock October 3, 2025 | |||||||||||
Non-vested stock grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of shares by tendering a portion of the vested shares back to the Company. Shares tendered back to the Company were 2,417 and 7,744 during 2025 and 2024, respectively. The fair value of restricted stock vested during 2025, 2024 and 2023 was approximately $803 , $1,562 and $909 , respectively.
Stock compensation expense, net of forfeitures, related to non-vested stock was $1,739 , $1,690 and $1,612 during 2025, 2024 and 2023, respectively. The tax benefit recognized during 2025, 2024 and 2023 related to stock based compensation was $422 , $410 and $390 , respectively. Unrecognized compensation cost related to non-vested stock as of October 3, 2025 was $1,646 , which amount will be amortized to expense through November 2027 or adjusted for changes in future estimated or actual forfeitures.
Restricted Stock Units
All restricted stock units awarded by the Company during fiscal 2025 and in prior years have been granted at their fair market value on the date of grant. The fair value at date of grant is based on the number of units granted and the average of the Company’s high and low Class A common stock trading price on the date of grant or, if the Company’s shares did not trade on the date of grant, the average of the Company’s high and low Class A common stock trading price on the last preceding date on which the Company’s shares traded. The vesting period for RSUs is generally one year from the date of grant for RSUs granted to directors and three years from the date of the grant for RSUs granted to employees.
A summary of RSU activity follows:
| Number of RSUs | Weighted Average Grant Price | ||||||||||
| RSUs at September 29, 2023 | $ | ||||||||||
| RSUs granted | |||||||||||
| RSUs vested | ( | ||||||||||
| RSUs forfeited | ( | ||||||||||
| RSUs at September 27, 2024 | |||||||||||
| RSUs granted | |||||||||||
RSUs vested and canceled due to performance targets not being met | ( | ||||||||||
| RSUs forfeited | ( | ||||||||||
| RSUs at October 3, 2025 | |||||||||||
RSU grantees may elect to reimburse the Company for withholding taxes due as a result of the vesting of units and issuance of unrestricted shares of Class A common stock by tendering a portion of such unrestricted shares back to the Company. Shares tendered back to the Company were 0 and 2,331 during 2025 and 2024, respectively. The fair value of restricted stock units vested during 2025, 2024 and 2023 was approximately $0 , $1,171 and $2,247 , respectively.
Stock compensation (benefit) expense, net of forfeitures, related to restricted stock units was $(324 ), $(503 ) and $732 for the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. The tax expense recognized during 2025 and 2024 related to restricted stock unit based compensation was $28 and $43 , respectively, and a benefit of $462 was
F-28
recognized in 2023. Unrecognized compensation cost related to non-vested restricted stock units as of October 3, 2025 was $482 .
For the fiscal years covered herein, compensation expense related to units earned by certain employees is based upon the attainment of certain financial goals related to cumulative net sales and cumulative operating profit over a three-year performance period. Awards are only paid if at least 80 % of the target levels are met and maximum payouts are made if 120 % of more of target levels are achieved. The payouts for achievement at the minimum threshold levels of performance are equal to 50 % of the target award amount. The payouts for achievement at maximum levels of performance are equal to 200 % of the target award amount for awards made with respect to the fiscal 2025 - 2027 performance period and 150 % for awards made with respect to earlier performance periods. To the extent earned, awards are issued in shares of Company common stock after the end of the three year performance period.
Employees' Stock Purchase Plan
The 2009 Employees’ Stock Purchase Plan (the “Purchase Plan”) formerly provided for the issuance of shares of Class A common stock at a purchase price of not less than 85 % of the fair market value of such shares on the date of grant or at the end of the offering period, whichever is lower. The Company terminated the Purchase Plan effective as of May 9, 2025.
The Company issued 6,203 , 4,937 and 5,401 shares of Class A common stock under the Purchase Plan during the years 2025, 2024 and 2023, respectively, and recognized expense of $80 , $105 and $102 in 2025, 2024 and 2023, respectively.
11 RELATED PARTY TRANSACTIONS
The Company conducts transactions with certain related parties including organizations controlled by the Johnson Family. These transactions include product purchases, aviation services, office rental, and facility fees. Total costs of these transactions were $1,782 , $1,537 and $1,473 for 2025, 2024 and 2023, respectively. Amounts due to/from related parties were immaterial at October 3, 2025 and September 27, 2024.
12 REVENUES
Revenue recognition
Revenue is recognized when performance obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our goods at a point in time based on shipping terms and transfer of title. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. The amount of consideration received can vary, primarily because of customer incentive or rebate arrangements. The Company estimates variable consideration based on the expected value of total consideration to which customers are likely to be entitled based on historical experience and projected market expectations. Included in the estimate is an assessment as to whether any variable consideration is constrained. Revenue estimates are adjusted at the earlier of a change in the expected value of consideration or when the consideration becomes fixed. For all contracts with customers, the Company has not adjusted the promised amount of consideration for the effects of a significant financing component as the period between the transfer of the promised goods and the customer's payment is expected to be one year or less . Sales are made on normal and customary short-term credit terms, generally ranging from 30 to 90 days, or upon delivery of point of sale transactions. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue.
The Company enters into contractual arrangements with customers in the form of individual customer orders which specify the goods, quantity, pricing, and associated order terms. The Company does not have contracts which are satisfied over time. Due to the nature of these contracts, no significant judgment exists in relation to the identification of the customer contract, satisfaction of the performance obligation, or transaction price. The Company expenses incremental costs of obtaining a contract due to the short-term nature of the contracts.
Estimated costs of returns, allowances and discounts, based on historic experience, are accrued as a reduction to sales when revenue is recognized. The Company provides customers the right to return eligible products under certain circumstances. The right to returns asset is included in Other Current Assets and the accrued returns liability is included in Other Current Liabilities on the accompanying Consolidated Balance Sheets. At October 3, 2025, the right to returns asset was $981 and the accrued returns liability was $2,595 . At September 27, 2024, the right to returns asset was $1,718 and the accrued returns liability was $4,052 . The Company also offers assurance-type warranties relating to its products sold to end customers that continue to be accounted for under ASC 460 Guarantees.
F-29
The Company generally accounts for shipping and handling activities as a fulfillment activity, consistent with the timing of revenue recognition; that is, when a customer takes control of the transferred goods. In the event that a customer were to take control of a product upon or after shipment, the Company has made an accounting policy election to treat such shipping and handling activities as a fulfillment cost. Shipping and handling fees billed to customers are included in "Net Sales," and shipping and handling costs are recognized within "Marketing and selling expenses" in the same period the related revenue is recognized.
The Company has a wide variety of seasonal, outdoor recreation products used primarily for fishing from a boat, diving, paddling, hiking and camping, that are sold to a variety of customers in multiple end markets. While there are multiple products sold, the nature of products are similar in terms of the nature of the revenue recognition policies.
See Note 13 of these Notes to Consolidated Financial Statements for required disclosures of disaggregated revenue.
13 SEGMENTS OF BUSINESS
The Company conducts its worldwide operations through separate business segments, each of which represent major product lines. Operations are conducted in the U.S. and various foreign countries, primarily in Europe, Canada and the Pacific Basin. During the years ended October 3, 2025, September 27, 2024, and September 29, 2023, combined sales to one customer of the Company's Fishing, Camping and Watercraft Recreation segments represented approximately $119,540 , $113,509 , and $101,392 respectively, of the Company's consolidated revenues.
The Company has historically reported "Camping" and "Watercraft Recreation" segments separately. Starting in the first fiscal quarter of 2025, the Company combined these two segments into one segment, "Camping & Watercraft Recreation," consistent with the manner in which its chief operating decision maker ("CODM") assesses performance and makes resource allocations. The operating segment change was for financial reporting purposes only and did not impact or result in changes to operations of the business segments, nor did it impact the Company's consolidated financial statements, but it did impact our previous segment footnote disclosure and the table below, including the corresponding items of segment information disclosed in the prior year.
The Company sold the Military and Commercial Tent product lines of its Camping & Watercraft Recreation business segment to a third party in an asset sale for a purchase price of $14,990 during the second quarter of fiscal 2023, resulting in a gain on sale, net of final working capital true-up, of approximately $6,560 , which was recorded in Other (income) expense, net in the Company’s accompanying Consolidated Statements of Operations. The sale did not include the Eureka! brand name or the Eureka! consumer/recreational Camping business line.
During fiscal 2024 and 2025, the Company also exited the Eureka! brand of the Camping & Watercraft Recreation segment, which included liquidating all remaining consumer inventory of Eureka! branded products and winding down operations. Discontinuing the Eureka! branded product line allows the Company to focus solely on the Jetboil product line, which we believe has a strong position in the outdoor cooking market. The Company incurred expenses of approximately $4,800 in fiscal 2023 related to the wind down of the Eureka! branded business, which included accruing exit costs and increasing inventory reserves, as well as incurring a contribution expense for a $2,000 donation of Eureka! inventory to a nonprofit organization. The related costs in fiscal 2025 and 2024 were insignificant. These costs are recorded in Costs of Sales and Operating Expenses in the Consolidated Statements of Operations.
The Company’s Chief Executive Officer, who has been identified as the CODM, primarily uses operating profit as the measure of profit or loss to assess segment performance and allocate resources. Operating profit represents net sales less cost of goods sold and operating expenses. Net Sales are directly attributed to each segment. Segment operating expenses include operating expenses directly attributable to the segment, as well as certain shared corporate administration and other costs which are allocated to the segments in a reasonable manner considering the specific facts and circumstances of the expenses being allocated. The CODM evaluates segment profitability based on operating profit (loss) because it provides key insights to operational leverage and other key operational metrics for each segment. Additionally, segment operating profit (loss) is used in the annual budgeting and forecasting process, and budget-to-actual and forecast-to-actual variances are considered when determining how resources should be allocated to each segment.
Net sales and operating profit include both sales to customers, as reported in the Company’s accompanying Consolidated Statements of Operations, and inter-unit transfers, which are priced to recover costs plus an appropriate profit margin. Total assets represent assets that are used in the Company’s operations in each business segment at the end of the years presented. The accounting policies of the Company’s reportable segments are the same as those described in Note 1. Summary of Significant Accounting Policies.
F-30
A summary of the Company’s operations by business segment is presented below:
| Twelve Months Ended October 3, 2025 | Fishing | Camping & Watercraft Recreation | Diving | Other/Corporate | Total | ||||||||||||||||||||||||
| Unaffiliated customers | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interunit transfers | ( | — | |||||||||||||||||||||||||||
| Net Sales | ( | ||||||||||||||||||||||||||||
| Cost of goods sold | ( | ||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||
| Marketing and selling expense | |||||||||||||||||||||||||||||
| Administrative management, finance and information systems expense | |||||||||||||||||||||||||||||
| Goodwill impairment | |||||||||||||||||||||||||||||
| Research and development expense | |||||||||||||||||||||||||||||
| Operating profit (loss) | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||
| Depreciation and amortization expense | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Goodwill, net | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total assets (end of period) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Twelve Months Ended September 27, 2024 | Fishing | Camping & Watercraft Recreation | Diving | Other/Corporate | Total | ||||||||||||||||||||||||
| Unaffiliated customers | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interunit transfers | ( | — | |||||||||||||||||||||||||||
| Net Sales | |||||||||||||||||||||||||||||
| Cost of goods sold | ( | ||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||
| Marketing and selling expense | |||||||||||||||||||||||||||||
| Administrative management, finance and information systems expense | |||||||||||||||||||||||||||||
| Goodwill impairment | |||||||||||||||||||||||||||||
| Research and development expense | |||||||||||||||||||||||||||||
| Operating profit (loss) | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Depreciation and amortization expense | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Goodwill, net | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total assets (end of period) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
F-31
| Twelve Months Ended September 29, 2023 | Fishing | Camping & Watercraft Recreation | Diving | Other/Corporate | Total | ||||||||||||||||||||||||
| Unaffiliated customers | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interunit transfers | ( | — | |||||||||||||||||||||||||||
| Net Sales | ( | ||||||||||||||||||||||||||||
| Cost of goods sold | ( | ||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||
| Marketing and selling expense | |||||||||||||||||||||||||||||
| Administrative management, finance and information systems expense | |||||||||||||||||||||||||||||
| Goodwill impairment | |||||||||||||||||||||||||||||
| Research and development expense | |||||||||||||||||||||||||||||
| Operating profit (loss) | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||
| Depreciation and amortization expense | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Goodwill, net | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total assets (end of period) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
F-32
The Company attributes revenue to individual countries based on the customer's location, not the shipping point or manufacturing site. A summary of the Company’s operations by geographic area is presented below:
| 2025 | 2024 | 2023 | |||||||||||||||
| Net sales: | |||||||||||||||||
| United States: | |||||||||||||||||
| Unaffiliated customers | $ | $ | $ | ||||||||||||||
| Interunit transfers | |||||||||||||||||
| Europe: | |||||||||||||||||
| Unaffiliated customers | |||||||||||||||||
| Interunit transfers | |||||||||||||||||
| Canada: | |||||||||||||||||
| Unaffiliated customers | |||||||||||||||||
| Interunit transfers | |||||||||||||||||
| Other: | |||||||||||||||||
| Unaffiliated customers | |||||||||||||||||
| Interunit transfers | |||||||||||||||||
| Eliminations | ( | ( | ( | ||||||||||||||
| $ | $ | $ | |||||||||||||||
| Total assets: | |||||||||||||||||
| United States | $ | $ | |||||||||||||||
| Europe | |||||||||||||||||
Canada | |||||||||||||||||
Other | |||||||||||||||||
| $ | $ | ||||||||||||||||
Long-term assets (1): | |||||||||||||||||
| United States | $ | $ | |||||||||||||||
| Europe | |||||||||||||||||
Canada | |||||||||||||||||
Other | |||||||||||||||||
| $ | $ | ||||||||||||||||
(1)Long term assets consist of net property, plant and equipment, right of use assets, net intangible assets, goodwill and other assets excluding deferred income taxes.
14 CONTINGENCIES
The Company is subject to various legal actions and proceedings in the normal course of business, including those related to commercial disputes, product liability, intellectual property and environmental matters. The Company is insured against loss for certain of these matters. Although litigation is subject to many uncertainties and the ultimate exposure with respect to these matters cannot be ascertained, management does not believe the final outcome of any pending litigation will have a material adverse effect on the financial condition, results of operations, liquidity or cash flows of the Company.
F-33
15 VALUATION AND QUALIFYING ACCOUNTS
The following summarizes changes to valuation and qualifying accounts for 2025, 2024 and 2023:
| Balance at Beginning of Year | Additions (Deductions) Charged to Costs and Expenses | Less Deductions | Balance at End of Year | ||||||||||||||||||||
| Year Ended October 3, 2025 | |||||||||||||||||||||||
Allowance for credit losses | $ | $ | $ | $ | |||||||||||||||||||
| Reserves for inventory valuation | ( | ||||||||||||||||||||||
| Valuation of deferred tax assets | |||||||||||||||||||||||
| Reserves for sales returns | |||||||||||||||||||||||
| Year ended September 27, 2024 | |||||||||||||||||||||||
Allowance for credit losses | $ | $ | $ | $ | |||||||||||||||||||
| Reserves for inventory valuation | |||||||||||||||||||||||
| Valuation of deferred tax assets | |||||||||||||||||||||||
| Reserves for sales returns | |||||||||||||||||||||||
| Year ended September 29, 2023 | |||||||||||||||||||||||
Allowance for credit losses | $ | $ | $ | $ | |||||||||||||||||||
| Reserves for inventory valuation | |||||||||||||||||||||||
| Valuation of deferred tax assets | |||||||||||||||||||||||
| Reserves for sales returns | |||||||||||||||||||||||
16 QUARTERLY FINANCIAL SUMMARY (UNAUDITED)
The following summarizes quarterly operating results for the years presented below:
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||||||||||||||||||||||||||
| (thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating profit (loss) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
| Net income (loss) per common share - Basic: | |||||||||||||||||||||||||||||||||||||||||||||||
| Class A | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
| Class B | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
| Net income (loss) per common share - Diluted: | |||||||||||||||||||||||||||||||||||||||||||||||
| Class A | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
| Class B | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
Due to changes in stock prices during the year and the timing of issuance of shares, the cumulative total of quarterly net income (loss) per share amounts may not equal the net income (loss) per share for the entire year.
17 ACQUISITIONS
F-34
On October 25, 2024, the Company acquired all the outstanding common stock of Endless Summer Technologies Proprietary, Limited ("EST") and related patents and other assets used in EST's business and operations in a purchase transaction with EST's sole shareholder (the "Seller"). EST, based in Durban, South Africa, has been a long term supplier of products to the Company and it specializes in the design, development and manufacturing of scuba equipment through unique application of existing, new and emerging technologies. The EST acquisition is included in the Company's Diving segment, and is expected to provide new innovative products, unlock synergies and enhance operating efficiencies for the Diving segment.
The approximately $12,197 acquisition cost was funded with existing cash. Approximately $1,650 of the purchase price was paid into segregated escrow accounts which were set aside to fund (1) any potential downward purchase price adjustment tied to cash, debt and net working capital levels as of the closing or (2) potential indemnity claims that may be made by the Company against the Seller in connection with the inaccuracy of certain representations and warranties made by the Seller or related to the breach or nonperformance of certain other actions, agreements or conditions related to the acquisition, for a period of 24 months from the acquisition date. The Company cannot estimate the probability or likelihood of bringing such an indemnity claim against the Seller or any related costs at this time. The remaining escrow balance, if any, net of any indemnity claim then pending, will be released to the Seller once the 24 month period has lapsed.
The Company finalized the purchase accounting during the fourth quarter of fiscal 2025, and there were no material adjustments made during the measurement period. The following table summarizes the fair values of the assets acquired and liabilities assumed, and the resulting goodwill acquired at the date of acquisition:
| Recognized amounts of identifiable assets acquired and liabilities assumed | |||||
| Accounts receivable | $ | ||||
| Inventories | |||||
| Other current assets | |||||
| Property, plant and equipment | |||||
| Identifiable intangible assets | |||||
| Deferred tax asset | |||||
| Less, accounts payable and accruals | ( | ||||
| Less, long term liabilities | ( | ||||
| Total identifiable net assets | |||||
| Goodwill | |||||
| Net assets acquired | $ | ||||
Pro forma financial information has not been presented because such amounts are not material to the unaudited condensed consolidated financial statements.
Transaction costs incurred for the acquisition to date were approximately $635 , of which approximately $135 was recognized during the year ended October 3, 2025, and which are included in Administrative management, finance and information systems expenses in the accompanying Condensed Consolidated Statements of Operations.
F-35
Exhibit 10.20
$50,000,000 REVOLVING CREDIT FACILITY
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
by and among
JOHNSON OUTDOORS INC.,
JOHNSON OUTDOORS WATERCRAFT INC.,
JOHNSON OUTDOORS MARINE ELECTRONICS, INC.,
JOHNSON OUTDOORS DIVING LLC,
UNDER SEA INDUSTRIES, INC., and
JOHNSON OUTDOORS GEAR, INC.,
as Borrowers
and
THE GUARANTORS PARTY HERETO
and
THE LENDERS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swing Loan Lender and Issuing Lender
and
PNC CAPITAL MARKETS LLC, as Sole Lead Arranger and Sole Bookrunner
Dated as of December 9, 2025
TABLE OF CONTENTS
| Page | ||||
|
CERTAIN DEFINITIONS
|
1
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|||
|
1.1
|
Certain Definitions.
|
1
|
||
|
1.2
|
Construction.
|
31
|
||
|
1.3
|
Accounting Principles; Changes in GAAP.
|
32
|
||
|
1.4
|
Benchmark Replacement Notification; Rates
|
33
|
||
|
1.5
|
Conforming Changes Relating to the Term SOFR Rate.
|
33
|
||
|
2.
|
REVOLVING CREDIT AND SWING LOAN FACILITIES
|
33
|
||
|
2.1
|
Revolving Credit Commitments.
|
33
|
||
|
2.1.1
|
Revolving Credit Loans.
|
33
|
||
|
2.1.2
|
Swing Loan Commitment.
|
34
|
||
|
2.2
|
Nature of Lenders' Obligations with Respect to Revolving Credit Loans.
|
34
|
||
|
2.3
|
Commitment Fees.
|
34
|
||
|
2.4
|
Termination or Reduction of Revolving Credit Commitments.
|
35
|
||
|
2.5
|
Revolving Credit Loan Requests; Swing Loan Requests.
|
35
|
||
|
2.5.1
|
Revolving Credit Loan Requests.
|
35
|
||
|
2.5.2
|
Swing Loan Requests.
|
36
|
||
|
2.6
|
Making Revolving Credit Loans and Swing Loans; Presumptions by the Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay Swing Loans.
|
36
|
||
|
2.6.1
|
Making Revolving Credit Loans.
|
36
|
||
|
2.6.2
|
Presumptions by the Administrative Agent.
|
36
|
||
|
2.6.3
|
Making Swing Loans.
|
37
|
||
|
2.6.4
|
Repayment of Revolving Credit Loans.
|
37
|
||
|
2.6.5
|
Borrowings to Repay Swing Loans.
|
37
|
||
|
2.6.6
|
Swing Loans Under Cash Management Agreements.
|
38
|
||
|
2.7
|
Notes.
|
38
|
||
|
2.8
|
Use of Proceeds.
|
39
|
||
|
2.9
|
Letter of Credit Subfacility.
|
39
|
||
|
2.9.1
|
Issuance of Letters of Credit.
|
39
|
||
|
2.9.2
|
Letter of Credit Fees.
|
40
|
||
|
2.9.3
|
Disbursements, Reimbursement.
|
41
|
||
|
2.9.4
|
Repayment of Participation Advances.
|
42
|
||
|
2.9.5
|
Documentation.
|
42
|
||
|
2.9.6
|
Determinations to Honor Drawing Requests.
|
43
|
||
|
2.9.7
|
Nature of Participation and Reimbursement Obligations.
|
43
|
||
|
2.9.8
|
Indemnity.
|
44
|
||
|
2.9.9
|
Liability for Acts and Omissions.
|
45
|
||
|
2.9.10
|
Issuing Lender Reporting Requirements.
|
46
|
||
|
2.10
|
Defaulting Lenders.
|
46
|
||
|
2.10.1
|
Defaulting Lender Adjustments.
|
46
|
||
|
2.10.2
|
Defaulting Lender Cure.
|
48
|
||
|
2.10.3
|
New Swing Loans/Letters of Credit.
|
48
|
||
(i)
|
2.11
|
Increase in Commitments and Added Term Loans.
|
49 | ||
|
2.12
|
Springing Borrowing Base.
|
51
|
||
|
3.
|
RESERVED
|
51
|
||
|
4.
|
INTEREST RATES
|
51
|
||
|
4.1
|
Interest Rate Options.
|
51
|
||
|
4.1.1
|
Revolving Credit Interest Rate Options; Swing Line Interest Rate.
|
51
|
||
|
4.1.2
|
Rate Quotations.
|
52
|
||
|
4.2
|
Interest Periods.
|
52
|
||
|
4.2.1
|
Amount of Borrowing Tranche.
|
52
|
||
|
4.2.2
|
Renewals.
|
52
|
||
|
4.3
|
Interest After Default.
|
52
|
||
|
4.3.1
|
Letter of Credit Fees, Interest Rate.
|
52
|
||
|
4.3.2
|
Other Obligations.
|
52
|
||
|
4.3.3
|
Acknowledgment.
|
53
|
||
|
4.4
|
Rate Unascertainable; Increased Costs; Illegality; Benchmark Replacement Setting.
|
53
|
||
|
4.4.1
|
Unascertainable; Increased Costs.
|
53
|
||
|
4.4.2
|
Illegality.
|
53
|
||
|
4.4.3
|
Administrative Agent's and Lender's Rights.
|
53
|
||
|
4.4.4
|
Benchmark Replacement Setting.
|
54
|
||
|
4.5
|
Selection of Interest Rate Options.
|
59
|
||
|
5.
|
PAYMENTS
|
59
|
||
|
5.1
|
Payments.
|
59
|
||
|
5.2
|
Pro Rata Treatment of Lenders.
|
59
|
||
|
5.3
|
Sharing of Payments by Lenders.
|
60
|
||
|
5.4
|
Administrative Agent’s Clawback
|
60
|
||
|
5.4.1
|
Funding by Lenders; Presumption by Administrative Agent.
|
60
|
||
|
5.4.2
|
Payments by Borrowers; Presumptions by Administrative Agent.
|
61
|
||
|
5.5
|
Interest Payment Dates.
|
61
|
||
|
5.6
|
Voluntary Prepayments.
|
61
|
||
|
5.7
|
Mandatory Prepayments.
|
62
|
||
|
5.8
|
Increased Costs.
|
62
|
||
|
5.8.1
|
Increased Costs Generally.
|
62
|
||
|
5.8.2
|
Capital Requirements.
|
63
|
||
|
5.8.3
|
Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing of New Loans.
|
63
|
||
|
5.8.4
|
Delay in Requests.
|
64
|
||
|
5.9
|
Taxes.
|
64
|
||
|
5.9.1
|
Issuing Lender.
|
64
|
||
|
5.9.2
|
Payments Free of Taxes.
|
64
|
||
|
5.9.3
|
Payment of Other Taxes by the Loan Parties.
|
64
|
||
|
5.9.4
|
Indemnification by the Loan Parties.
|
64
|
||
|
5.9.5
|
Indemnification by the Lenders.
|
65
|
||
|
5.9.6
|
Evidence of Payments.
|
65
|
||
|
5.9.7
|
Status of Lenders.
|
65
|
||
(ii)
| 5.9.8 |
Treatment of Certain Refunds.
|
67
|
||
|
5.9.9
|
Survival.
|
67
|
||
|
5.10
|
Indemnity.
|
68
|
||
|
5.11
|
Settlement Date Procedures.
|
68
|
||
|
5.12
|
Cash Collateral.
|
69
|
||
|
5.13
|
Replacement of a Lender.
|
70
|
||
|
5.14
|
Designation of a Different Lending Office.
|
71
|
||
|
6.
|
REPRESENTATIONS AND WARRANTIES
|
71
|
||
|
6.1
|
Representations and Warranties.
|
71
|
||
|
6.1.1
|
Organization and Qualification; Power and Authority; Compliance With Laws; Title to Properties; Event of Default.
|
71
|
||
|
6.1.2
|
Subsidiaries and Owners; Investment Companies.
|
72
|
||
|
6.1.3
|
Validity and Binding Effect.
|
72
|
||
|
6.1.4
|
No Conflict; Material Agreements; Consents.
|
72
|
||
|
6.1.5
|
Litigation.
|
72
|
||
|
6.1.6
|
Financial Statements.
|
73
|
||
|
6.1.7
|
Margin Stock.
|
73
|
||
|
6.1.8
|
Full Disclosure.
|
74
|
||
|
6.1.9
|
Taxes.
|
74
|
||
|
6.1.10
|
Patents, Trademarks, Copyrights, Licenses, Etc.
|
74
|
||
|
6.1.11
|
Liens in the Collateral.
|
74
|
||
|
6.1.12
|
Insurance.
|
74
|
||
|
6.1.13
|
ERISA Compliance.
|
75
|
||
|
6.1.14
|
Environmental Matters.
|
75
|
||
|
6.1.15
|
Solvency.
|
76
|
||
|
6.1.16
|
Sanctions; International Trade, Anti-Money Laundering and Anti-Corruption Laws.
|
76
|
||
|
6.1.17
|
Certificate of Beneficial Ownership.
|
76
|
||
|
6.1.18
|
Labor Matters.
|
76
|
||
|
6.2
|
Updates to Schedules.
|
76
|
||
|
7.
|
CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
|
77
|
||
|
7.1
|
First Loans and Letters of Credit.
|
77
|
||
|
7.1.1
|
Deliveries.
|
77
|
||
|
7.1.2
|
Payment of Fees.
|
78
|
||
|
7.2
|
Each Loan or Letter of Credit.
|
78
|
||
|
8.
|
COVENANTS
|
79
|
||
|
8.1
|
Affirmative Covenants.
|
79
|
||
|
8.1.1
|
Preservation of Existence, Etc.
|
79
|
||
|
8.1.2
|
Payment of Liabilities, Including Taxes, Etc.
|
79
|
||
|
8.1.3
|
Maintenance of Insurance.
|
80 | ||
|
8.1.4
|
Maintenance of Properties and Leases.
|
80
|
||
|
8.1.5
|
Visitation Rights.
|
80
|
||
|
8.1.6
|
Keeping of Records and Books of Account.
|
80
|
||
|
8.1.7
|
Compliance with Laws; Use of Proceeds.
|
81
|
||
(iii)
|
8.1.8
|
Further Assurances.
|
81
|
||
|
8.1.9
|
Sanctions; International Trade, Anti-Money Laundering, and Anti-Corruption Laws.
|
81
|
||
|
8.1.10
|
Keepwell.
|
81
|
||
|
8.1.11
|
Certificate of Beneficial Ownership and Other Additional Information.
|
82
|
||
|
8.2
|
Negative Covenants.
|
82
|
||
|
8.2.1
|
Indebtedness.
|
82
|
||
|
8.2.2
|
Liens; Lien Covenants.
|
83
|
||
|
8.2.3
|
Guaranties.
|
83
|
||
|
8.2.4
|
Loans and Restricted Investments in Foreign Subsidiaries.
|
83
|
||
|
8.2.5
|
Dividends, Stock Repurchases and Related Distributions.
|
83
|
||
|
8.2.6
|
Liquidations, Mergers, Consolidations, Acquisitions.
|
83
|
||
|
8.2.7
|
Dispositions of Assets or Subsidiaries.
|
84
|
||
|
8.2.8
|
Affiliate Transactions.
|
85
|
||
|
8.2.9
|
Subsidiaries, Partnerships and Joint Ventures.
|
85
|
||
|
8.2.10
|
Continuation of or Change in Business.
|
85
|
||
|
8.2.11
|
Fiscal Year.
|
85
|
||
|
8.2.12
|
[Reserved].
|
85
|
||
|
8.2.13
|
Changes in Organizational Documents.
|
86
|
||
|
8.2.14
|
Maximum Net Leverage Ratio.
|
86
|
||
|
8.2.15
|
Minimum Interest Coverage Ratio.
|
86
|
||
|
8.2.16
|
Negative Pledge.
|
86
|
||
|
8.2.17
|
Sanctions; International Trade, Anti-Money Laundering and other Anti-Corruption Laws.
|
86
|
||
|
8.3
|
Reporting Requirements.
|
87
|
||
|
8.3.1
|
Quarterly Financial Statements.
|
87
|
||
|
8.3.2
|
Annual Financial Statements.
|
87
|
||
|
8.3.3
|
Certificate of Borrowers.
|
87
|
||
|
8.3.4
|
Notices.
|
87
|
||
|
8.3.5
|
Borrowing Base Certificates; Schedules of Accounts, Inventory and Payables.
|
88
|
||
|
8.3.6
|
Field Exams; Appraisals.
|
89
|
||
|
8.3.7
|
Posting Information.
|
89
|
||
|
9.
|
DEFAULT
|
89
|
||
|
9.1
|
Events of Default.
|
89
|
||
|
9.1.1
|
Payments Under Loan Documents.
|
89
|
||
|
9.1.2
|
Breach of Warranty.
|
89
|
||
|
9.1.3
|
Sanctions; International Trade, Anti-Money Laundering and Anti-Corruption Laws.
|
90 | ||
|
9.1.4
|
Breach of Negative Covenants, Visitation Rights or Anti-Corruption Laws, Anti-Money Laundering Laws and International Trade Laws.
|
90 | ||
|
9.1.5
|
Breach of Other Covenants.
|
90
|
||
|
9.1.6
|
Defaults in Other Agreements or Indebtedness.
|
90
|
||
|
9.1.7
|
Final Judgments or Orders.
|
90
|
||
|
9.1.8
|
Loan Document Unenforceable.
|
90
|
||
|
9.1.9
|
Uninsured Losses; Proceedings Against Assets.
|
90
|
||
|
9.1.10
|
Events Relating to Pension Plans and Multiemployer Plans.
|
91
|
||
(iv)
|
9.1.11
|
Change of Control.
|
91
|
||
|
9.1.12
|
Relief Proceedings.
|
91
|
||
|
9.2
|
Consequences of Event of Default.
|
91
|
||
|
9.2.1
|
Events of Default Generally.
|
91
|
||
|
9.2.2
|
Bankruptcy, Insolvency or Reorganization Proceedings.
|
91
|
||
|
9.2.3
|
Set-off.
|
92
|
||
|
9.2.4
|
Enforcement of Rights and Remedies.
|
92
|
||
|
9.2.5
|
Application of Proceeds.
|
93
|
||
|
|
||||
|
10.
|
THE ADMINISTRATIVE AGENT
|
94
|
||
|
10.1
|
Appointment and Authority.
|
94
|
||
|
10.2
|
Rights as a Lender.
|
95
|
||
|
10.3
|
Exculpatory Provisions.
|
95
|
||
|
10.4
|
Reliance by Administrative Agent.
|
96
|
||
|
10.5
|
Delegation of Duties.
|
96
|
||
|
10.6
|
Resignation of Administrative Agent.
|
97
|
||
|
10.7
|
Non-Reliance on Administrative Agent and Other Lenders.
|
98
|
||
|
10.8
|
No Other Duties, etc.
|
98
|
||
|
10.9
|
Administrative Agent’s Fee.
|
99
|
||
|
10.10
|
Collateral and Guaranty Matters.
|
99
|
||
|
10.11
|
No Reliance on Administrative Agent’s Customer Identification Program.
|
99
|
||
|
10.12
|
Certain ERISA Matters.
|
99
|
||
|
10.13
|
Erroneous Payments
|
101
|
||
|
10.14
|
Lender Provided Interest Rate Hedges, Lender Provided Foreign Currency Hedges and Other Lender Provided Financial Service Products.
|
103
|
||
|
10.15
|
Administrative Agent May File Proofs of Claim.
|
104
|
||
|
11.
|
MISCELLANEOUS
|
104
|
||
|
11.1
|
Modifications, Amendments or Waivers.
|
104
|
||
|
11.1.1
|
Increase of Commitment.
|
105
|
||
|
11.1.2
|
Extension of Payment; Reduction of Principal, Interest or Fees; Modification of Terms of Payment.
|
105
|
||
|
11.1.3
|
Release of Collateral or Guarantor; Subordination of Obligations or Collateral.
|
105
|
||
|
11.1.4
|
Miscellaneous.
|
105
|
||
|
11.2
|
No Implied Waivers; Cumulative Remedies.
|
106
|
||
|
11.3
|
Expenses; Indemnity; Damage Waiver.
|
107
|
||
|
11.3.1
|
Costs and Expenses.
|
107
|
||
|
11.3.2
|
Indemnification by the Borrowers.
|
107
|
||
|
11.3.3
|
Reimbursement by Lenders.
|
108
|
||
|
11.3.4
|
Waiver of Consequential Damages, Etc.
|
108
|
||
|
11.3.5
|
Payments.
|
108
|
||
|
11.3.6
|
Survival.
|
108
|
||
|
11.4
|
Holidays.
|
108
|
||
|
11.5
|
Notices; Effectiveness; Electronic Communication.
|
109
|
||
|
11.5.1
|
Notices Generally.
|
109
|
||
|
11.5.2
|
Electronic Communications.
|
109
|
||
|
11.5.3
|
Change of Address, Etc.
|
110
|
||
(v)
|
11.5.4
|
Platform.
|
110
|
||
|
11.6
|
Severability.
|
110
|
||
|
11.7
|
Duration; Survival.
|
110
|
||
|
11.8
|
Successors and Assigns.
|
111
|
||
|
11.8.1
|
Successors and Assigns Generally.
|
111
|
||
|
11.8.2
|
Assignments by Lenders.
|
111
|
||
|
11.8.3
|
Register.
|
113
|
||
|
11.8.4
|
Participations.
|
113
|
||
|
11.8.5
|
Certain Pledges; Successors and Assigns Generally.
|
114
|
||
|
11.8.6
|
Cashless Settlement.
|
115
|
||
|
11.8.7
|
Arrangers/Bookrunners.
|
115
|
||
|
11.9
|
Confidentiality.
|
115
|
||
|
11.9.1
|
General.
|
115
|
||
|
11.9.2
|
Sharing Information With Affiliates of the Lenders
|
116
|
||
|
11.10
|
Counterparts; Integration; Effectiveness; Electronic Execution.
|
116
|
||
|
11.10.1
|
Counterparts; Integration; Effectiveness.
|
116
|
||
|
11.10.2
|
Electronic Execution.
|
116
|
||
|
11.11
|
CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
|
117
|
||
|
11.11.1
|
Governing Law.
|
117
|
||
|
11.11.2
|
SUBMISSION TO JURISDICTION.
|
117
|
||
|
11.11.3
|
WAIVER OF VENUE.
|
117
|
||
|
11.11.4
|
SERVICE OF PROCESS.
|
118
|
||
|
11.11.5
|
WAIVER OF JURY TRIAL.
|
118
|
||
|
11.12
|
USA PATRIOT Act Notice.
|
118
|
||
|
11.13
|
Borrower Agent.
|
118
|
||
|
11.14
|
Joint and Several Obligations of Borrowers.
|
118
|
||
|
11.15
|
Acknowledgement and Consent to Bail-In of Affected Financial Institutions
|
121
|
||
|
11.16
|
Acknowledgement Regarding any Supported QFCs.
|
121
|
||
|
11.17
|
Amendment and Restatement, No Novation
|
122
|
||
|
11.18
|
No Fiduciary Duty.
|
123
|
||
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
|
SCHEDULE 1.1(A)
|
-
|
PRICING GRID
|
|
SCHEDULE 1.1(B)
|
-
|
COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES
|
|
SCHEDULE 1.1(P)
|
-
|
PERMITTED LIENS
|
|
SCHEDULE 1.1(Q)(1)
|
QUALIFIED ACCOUNTS
|
|
|
SCHEDULE 1.1(Q)(2)
|
QUALIFIED INVENTORY
|
|
|
SCHEDULE 2.9.1
|
-
|
EXISTING LETTERS OF CREDIT
|
|
SCHEDULE 6.1.1
|
-
|
QUALIFICATIONS TO DO BUSINESS
|
|
SCHEDULE 6.1.2
|
-
|
SUBSIDIARIES
|
|
SCHEDULE 8.2.1
|
-
|
PERMITTED INDEBTEDNESS
|
|
SCHEDULE 8.2.4
|
-
|
RESTRICTED INVESTMENTS IN FOREIGN SUBSIDIARIES
|
(vi)
EXHIBITS
|
EXHIBIT 1.1(A)
|
-
|
ASSIGNMENT AND ASSUMPTION AGREEMENT
|
|
EXHIBIT 1.1(B)
|
-
|
BORROWER JOINDER
|
|
EXHIBIT 1.1(G)(1)
|
-
|
GUARANTOR JOINDER
|
|
EXHIBIT 1.1(G)(2)
|
-
|
GUARANTY AGREEMENT
|
|
EXHIBIT 1.1(I)
|
-
|
INTERCOMPANY SUBORDINATION AGREEMENT
|
|
EXHIBIT 1.1(N)(1)
|
-
|
REVOLVING CREDIT NOTE
|
|
EXHIBIT 1.1(N)(2)
|
-
|
SWING LOAN NOTE
|
|
EXHIBIT 2.5.1
|
-
|
LOAN REQUEST
|
|
EXHIBIT 2.5.2
|
-
|
SWING LOAN REQUEST
|
|
EXHIBIT 2.11
|
-
|
LENDER JOINDER
|
|
EXHIBIT 5.9.7(A)
|
-
|
U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
|
|
EXHIBIT 5.9.7(B)
|
-
|
U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
|
|
EXHIBIT 5.9.7(C)
|
-
|
U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
|
|
EXHIBIT 5.9.7(D)
|
-
|
U.S. TAX COMPLIANCE CERTIFICATE (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
|
|
EXHIBIT 8.3.3
|
-
|
QUARTERLY COMPLIANCE CERTIFICATE
|
(vii)
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (as hereafter further amended, restated, amended and restated, modified or supplemented, the “Agreement”)
is dated as of December 9, 2025, and is made by and among JOHNSON OUTDOORS INC., a Wisconsin corporation, JOHNSON OUTDOORS WATERCRAFT INC., a Delaware corporation,
JOHNSON OUTDOORS MARINE ELECTRONICS, INC., an Alabama corporation, JOHNSON OUTDOORS DIVING LLC, a Delaware limited liability
company, UNDER SEA INDUSTRIES, INC., a Delaware corporation, and JOHNSON OUTDOORS GEAR, INC., a Delaware corporation (each a “Borrower”
and collectively “Borrowers”), each of the other BORROWERS from time to time party hereto, each of the GUARANTORS (as hereinafter defined) from time to time party hereto, the LENDERS (as hereinafter
defined), and PNC BANK, NATIONAL ASSOCIATION, in its capacity the Administrative Agent (as hereinafter defined), Swing Loan Lender (as hereinafter defined) and Issuing Lender (as hereinafter defined).
WHEREAS, the Borrowers, the Lenders and the Administrative Agent, are parties to that certain Amended and Restated Credit Agreement dated as of November 15, 2017, by and among the Borrowers, the
Administrative Agent and the Lenders party thereto, as amended pursuant to that certain First Amendment to Amended and Restated Credit Agreement by and among the Borrowers, the Administrative Agent and the Lenders, dated as of July 15, 2021, as
amended pursuant to that certain LIBOR Index Replacement and Conforming Changes Notice and Amendment Letter dated as of June 14, 2023, which was delivered by Administrative Agent to Borrower Agent, and as amended pursuant to that certain Second
Amendment to Amended and Restated Credit Agreement by and among the Borrowers, the Administrative Agent and the Lenders, dated January 29, 2025 (as amended, the “Existing Credit Agreement”), pursuant to
which the lenders thereunder have made available to the Borrowers a revolving credit facility in an aggregate principal amount not to exceed $50,000,000; and
WHEREAS, the Borrowers have requested that the Revolving Credit Commitment (as defined in the Existing Credit Agreement) be extended, and that certain other amendments be made to the Existing
Credit Agreement. Subject to the terms and conditions hereof, the parties agree that, effective as of the date hereof, the Existing Credit Agreement shall for the convenience of such parties be amended and restated in its entirety as set forth
below.
NOW, THEREFORE, in consideration of their mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the parties hereto covenant and agree as follows:
1.1 Certain Definitions. In addition to words and terms defined elsewhere in this Agreement, the following words and terms shall have the
following meanings, respectively, unless the context hereof clearly requires otherwise:
Account shall mean any account, contract right, general intangible, chattel paper, instrument or document representing any right to payment
for goods sold or services rendered, whether or not earned by performance and whether or not evidenced by a contract, instrument or document, which is now owned or hereafter acquired by a Loan Party. All Accounts, whether Qualified Accounts or
not, shall be subject to the Lenders’ prior security interest.
Account Debtor shall mean any Person who is or who may become obligated to a Loan Party under, with respect to, or on account of, an
Account.
Added Term Loans shall have the meaning assigned to that term in Section 2.11 [Increase in Commitments and Added Term Loans].
Administrative Agent shall mean PNC Bank, National Association, and its successors and assigns, in its capacity as administrative agent
hereunder.
Administrative Agent’s Fee shall have the meaning specified in Section 10.9 [Administrative Agent’s Fee].
Administrative Agent’s Letter shall have the meaning specified in Section 10.9 [Administrative Agent’s Fee].
Administrative Questionnaire shall mean an administrative questionnaire in a form supplied by the Administrative Agent.
Affected Financial Institution shall mean (a) any EEA Financial Institution or (b) any UK Financial Institution.
Affiliate as to any Person shall mean any other Person (i) which directly or indirectly controls, is controlled by, or is under common
control with such Person, (ii) which beneficially owns or holds 5% or more of any class of the voting or other equity interests of such Person, or (iii) 5% or more of any class of voting interests or other equity interests of which is
beneficially owned or held, directly or indirectly, by such Person. For purposes of this definition, "control" of a Person means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise.
Anti-Corruption Laws shall mean (a) the U.S. Foreign Corrupt Practices Act of 1977, as amended; (b) the U.K. Bribery Act 2010, as amended;
and (c) any other applicable Law relating to anti-bribery or anti-corruption in any jurisdiction in which any Loan Party is located or doing business.
Anti-Money Laundering Laws shall mean (a) the Bank Secrecy Act and the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, each as amended; (b) the U.K. Proceeds of Crime Act 2002, the Money Laundering Regulations 2017 and the Terrorist Asset-Freezing Act 2010, each as amended; and (c) any
other applicable Law relating to anti-money laundering and countering the financing of terrorism and related financial record keeping and reporting requirements in any jurisdiction in which any Loan Party is located or doing business.
2
Applicable Commitment Fee Rate shall mean the percentage rate per annum based on the Net Leverage Ratio then in effect according to the
pricing grid on Schedule 1.1(A) below the heading “Commitment Fee.”
Applicable Letter of Credit Fee Rate shall mean the percentage rate per annum based on the Net Leverage Ratio then in effect according to
the pricing grid on Schedule 1.1(A) below the heading “Letter of Credit Fee.”
Applicable Margin shall mean, as applicable:
(i) the percentage spread to be added to the Base Rate applicable to Revolving Credit Loans under the Base Rate Option based on the Net Leverage Ratio then in effect according to the
pricing grid on Schedule 1.1(A) below the heading “Revolving Credit Base Rate Spread”, or
(ii) the percentage spread to be added to the Term SOFR Rate applicable to Revolving Credit Loans under the Term SOFR Rate Option based on the Net Leverage Ratio then in effect according
to the pricing grid on Schedule 1.1(A) below the heading “Revolving Credit Term SOFR Rate Spread”.
Approved Fund shall mean any Fund that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
Affiliate of an entity that administers or manages a Lender.
Assignment and Assumption Agreement shall mean an assignment and assumption agreement entered into by a Lender and an assignee permitted
under Section 11.8 [Successors and Assigns], in substantially the form of Exhibit 1.1(A).
Authorized Officer shall mean, with respect to any Loan Party, the Chief Executive Officer, President, Chief Financial Officer, Director of
Global Tax and Treasury or Assistant Treasurer of such Loan Party, any manager or the members (as applicable) in the case of any Loan Party which is a limited liability company, or such other individuals, designated by written notice to the
Administrative Agent from the Borrowers, authorized to execute notices, reports and other documents on behalf of such Loan Party required hereunder. The Borrowers may amend such list of individuals from time to time by giving written notice of
such amendment to the Administrative Agent.
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).
3
Base Rate shall mean, for any day, a fluctuating per annum rate of interest equal to the highest of (i) the Overnight Bank Funding Rate, plus 0.5%, (ii) the Prime Rate, and (iii) the Daily Simple SOFR, plus 100 basis points (1.0%), so long as Daily Simple SOFR is offered, ascertainable and not
unlawful; provided, however, if the Base Rate as determined above would be less than zero, then such rate shall be deemed to be zero. Any change in the Base Rate (or any component thereof) shall take effect at the opening of business on the
day such change occurs without notice to the Borrowers. Notwithstanding anything to the contrary contained herein, in the case of any event specified in Section 4.4.1 [Unascertainable; Increased Costs] or Section 4.4.2 [Illegality], to the
extent any such determination affects the calculation of the Base Rate, the definition hereof shall be calculated without reference to clause (iii) until the circumstances giving rise to such event no longer exist.
Base Rate Loan shall mean a Loan that bears interest based on the Base Rate.
Base Rate Option shall mean the option of the Borrowers to have Loans bear interest at the rate and under the terms set forth in Section
4.1.1(i) [Revolving Credit Base Rate Option].
Benchmark Replacement shall have the meaning specified in Section 4.4.4 [Benchmark Replacement Setting].
Beneficial Owner shall mean, for each Borrower, each of the following: (a) each individual, if any, who, directly or indirectly, owns 25%
or more of such Borrower’s Equity Interests; and (b) a single individual with significant responsibility to control, manage, or direct such Borrower.
Benefit Plan shall mean any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b)
a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such
“employee benefit plan” or “plan”.
Borrower or Borrowers shall have the meaning specified in the introductory paragraph.
Borrower Agent shall have the meaning specified in Section 11.13 [Borrower Agent].
Borrower Joinder shall mean a joinder by a Person as a Borrower under the Loan Documents in the form of Exhibit 1.1(B).
Borrowers Equity Interests shall have the meaning specified in Section 6.1.2 [Subsidiaries and Owners; Investment Companies].
4
Borrowing Base shall mean at any time the sum of (a) 80% of Qualified Accounts (“Accounts Portion”), plus (b) 50% of Qualified
Inventory (“Inventory Portion”), plus (c) any reserves established by the Administrative Agent in its Permitted Discretion.
Borrowing Date shall mean, with respect to any Loan, the date of the making, renewal or conversion thereof, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Loans outstanding as follows: (i) any Loans to which a Term SOFR Rate Option applies
which become subject to the same Interest Rate Option under the same Loan Request by the Borrowers and which have the same Interest Period shall constitute one Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies shall
constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to
be closed for business in Pittsburgh, Pennsylvania (or, if otherwise, the Lending Office of the Administrative Agent); provided that, for purposes of any direct or indirect calculation or determination of, or when used in connection with any
interest rate settings, fundings, disbursements, settlements, payments, or other dealings with respect to SOFR, the term “Business Day” means any such day that is also a U.S. Government Securities Business Day.
Capital Expenditures shall mean for any period, with respect to any Person, the aggregate of all expenditures by such Person for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) which are required to be capitalized under GAAP on a
consolidated balance sheet of such Person.
Capital Stock shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.
Cash Collateralize shall mean, to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the
Issuing Lender or the Lenders, as collateral for Letter of Credit Obligations or obligations of Lenders to fund participations in respect of Letter of Credit Obligations, cash or deposit account balances or, if the Administrative Agent and each
applicable Issuing Lender shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and each applicable Issuing Lender. “Cash Collateral”
shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
Cash Management Agreements shall have the meaning specified in Section 2.6.6 [Swing Loans Under Cash Management Agreements].
Cash Management Bank shall mean any Person that, at the time it enters into an Other Lender Provided Financial Service Product, is a Lender
or an Affiliate of a Lender, in its capacity as a party to such Other Lender Provided Financial Service Product.
5
CEA shall mean the Commodity Exchange Act (7 U.S.C.§1 et seq.), as amended from time to time, and any successor statute.
Certificate of Beneficial Ownership means, for each Borrower, a certificate in form and substance acceptable to the Administrative Agent (as
amended or modified by the Administrative Agent from time to time in its sole discretion), certifying, among other things, the Beneficial Owner of such Borrower.
CFTC shall mean the Commodity Futures Trading Commission.
Change in Law shall mean the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any
Law, (ii) any change in any Law or in the administration, interpretation, implementation or application thereof by any Official Body or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force
of Law) by any Official Body; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or
directives thereunder or issued in connection therewith (whether or not having the force of Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the
Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of Law), in each case pursuant to Basel III, shall in each case be deemed to
be a Change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.
Change of Control shall mean (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than the Johnson Family, shall become, or obtain rights (whether by
means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more than 40% of the Capital Stock of the Company; (b) the Company shall
cease to own, free and clear of all Liens or other encumbrances, directly or indirectly, 99% or more of the outstanding voting Borrowers Equity Interests or Subsidiary Equity Interests on a fully diluted basis; or (c) any merger, consolidation
or sale of substantially all of the property or assets of any Loan Party except as permitted by Section 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions].
CIP Regulations shall have the meaning specified in Section 10.11 [No Reliance on Administrative Agent's Customer Identification Program].
Class, when used in reference to any Loan, refers to whether such Loan, or the advances comprising such Loans, are Revolving Credit Loans or Swing Loans and, when used in reference to any
Lender, refers to whether such Lender has any (a) outstanding Revolving Credit Loans or Revolving Credit Commitments, (b) outstanding Swing Loans or Swing Loan Commitments or (c) if applicable, outstanding Added Term Loans or New Tranche of Term
Loan Commitments pursuant to Section 2.11 [Increase in Commitments and Added Term Loans].
Closing Date shall mean December 9, 2025.
6
Code shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute
of similar import, and the rules and regulations thereunder, as from time to time in effect.
Collateral shall mean the personal and/or real property of any Person granted as collateral to secure the Obligations for the benefit of the
Secured Parties.
Collateral Documents means the Security Agreement and any other agreement, document or instrument granting a Lien in Collateral for the
benefit of the Secured Parties.
Commitment shall mean as to any Lender, its Revolving Credit Commitment, and, in the case of the Swing Loan Lender, its Swing Loan
Commitment (but not the aggregate of its Revolving Credit Commitment and its Swing Loan Commitment), and Commitments shall mean the aggregate of the Revolving Credit Commitments and Swing Loan Commitment of all of the Lenders.
Commitment Fee shall have the meaning specified in Section 2.3 [Commitment Fees].
Communications shall have the meaning specified in Section 11.5.4 [Platform].
Company shall mean Johnson Outdoors Inc., a Wisconsin corporation.
Compliance Authority shall mean (a) any Official Body of the United States (including the U.S. Department of the Treasury, OFAC, and the
U.S. Department of State), the European Union, the United Kingdom, or Canada; (b) the United Nations Security Council; and (c) any other Official Body with jurisdiction over the parties to this Agreement.
Compliance Certificate shall have the meaning specified in Section 8.3.3 [Certificate of Borrowers].
Conforming Changes shall mean, with respect to the Term SOFR Rate or any Benchmark Replacement in relation thereto, any technical,
administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” the definition of “U.S. Government Securities Business Day,” 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 breakage provisions, and other
technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of the Term SOFR Rate or such Benchmark Replacement and to permit the administration thereof
by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent
determines that no market practice for the administration of the Term SOFR Rate or the Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the
administration of this Agreement and the other Loan Documents).
7
Connection Income Taxes shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are
franchise Taxes or branch profits Taxes.
Consolidated EBITDA for any period of determination shall mean (i) the sum of, without duplication, net income, depreciation, amortization,
other non-cash charges to net income, interest expense and income tax expense, non-cash stock compensation expenses and non-cash pension expenses, and other non-recurring expenses and charges agreed to by the Administrative Agent, minus (ii) non-cash credits to net income, in each case of the Loan Parties and their Subsidiaries for such period determined and consolidated in accordance with GAAP. Notwithstanding the foregoing, to the
extent a Permitted Acquisition has been consummated during such period, pro forma Consolidated EBITDA attributable to such Permitted Acquisition shall be included in Consolidated EBITDA.
Covered Entity shall mean (a) each Borrower
and each Borrower’s Subsidiaries; (b) each Guarantor and any Person who has pledged (or will pledge) Collateral under any Loan Document; and (c) each Person that, directly or indirectly, controls (as such term is defined by any Compliance
Authority) a Person described in clauses (a) and (b) above.
Covered Property shall mean any property: (a) required to be reported as blocked property under 31 C.F.R. § 501.603, as amended; (b) owned,
directly or indirectly, by, or due to or from, a Sanctioned Person subject to blocking or comprehensive Sanctions; (c) in which a Sanctioned Person subject to blocking or comprehensive Sanctions otherwise holds any interest; (d) located or
originated in, or otherwise subject to restrictions due to its ties to, a Sanctioned Jurisdiction; or (e) that otherwise could cause any actual or potential violation by the Lenders or the Administrative Agent of any applicable International
Trade Law if the Lenders or the Administrative Agent were to obtain an encumbrance on, lien on, pledge, or security interest in such property, or provide services in consideration of such property.
“Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), the interest rate per annum determined by the Administrative Agent (rounded upwards, at the Administrative Agent’s
discretion, to the nearest 1/100th of 1%) equal to SOFR for the day (the “SOFR Determination Date”) that is 2 Business Days prior to (i) such SOFR Rate Day if such SOFR Rate Day is a Business Day or (ii) the Business Day immediately
preceding such SOFR Rate Day if such SOFR Rate Day is not a Business Day, in each case, as such SOFR is published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the
Federal Reserve Bank of New York, at http://www.newyorkfed.org, or any successor source identified by the Federal Reserve Bank of New York or its successor administrator for the secured overnight financing rate from time to time. If Daily Simple
SOFR as determined above would be less than the SOFR Floor, then Daily Simple SOFR shall be deemed to be the SOFR Floor. If SOFR for any SOFR Determination Date has not been published or replaced with a Benchmark Replacement by 5:00 p.m.
(Pittsburgh, Pennsylvania time) on the second Business Day immediately following such SOFR Determination Date, then SOFR for such SOFR Determination Date will be SOFR for the first Business Day preceding such SOFR Determination Date for which
SOFR was published in accordance with the definition of “SOFR”; provided that SOFR determined pursuant to this sentence shall be used for purposes of calculating Daily Simple SOFR for no more than 3 consecutive SOFR Rate Days. If and when Daily
Simple SOFR as determined above changes, any applicable rate of interest based on Daily Simple SOFR will change automatically without notice to the Borrower, effective on the date of any such change.
8
Debtor Relief Laws shall mean the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
Defaulting Lender shall mean, subject to Section 2.10.2 [Defaulting Lender Cure], any Lender that (a) has failed to (i) fund all or any
portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s
determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the
Administrative Agent, the Issuing Lender, the Swing Loan Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Loans) within two (2) Business
Days of the date when due, (b) has notified the Borrower, the Administrative Agent, the Issuing Lender or the Swing Loan Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement
to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition
precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the
Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed
for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation
or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of
any equity interest in that Lender or any direct or indirect parent company thereof by an Official Body so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United
States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Official Body) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by
the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to
Section 2.10.2 [Defaulting Lender Cure]) upon delivery of written notice of such determination to the Borrower, the Issuing Lender, the Swing Loan Lender and each Lender.
9
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean, in each case, the lawful currency of the United States of America.
Drawing Date shall have the meaning specified in Section 2.9.3.1 [Disbursements, Reimbursement].
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 of the member states 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.
Effective Date shall mean the date indicated in a document or agreement to be the date on which such document or agreement becomes
effective, or, if there is no such indication, the date of execution of such document or agreement.
Effective Federal Funds Rate shall mean for any day the rate per annum (based on a year of 360 days and actual days elapsed and rounded
upward to the nearest 1/100 of 1% announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Effective Federal
Funds Rate” as of the date of this Agreement; provided that if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Effective Federal Funds Rate” for such day shall be the Effective Federal Funds
Rate for the last day on which such rate was announced. Notwithstanding the foregoing, if the Effective Federal Funds Rate as determined under any method above would be less than zero percent (0.00%), such rate shall be deemed to be zero
percent (0.00%) for purposes of this Agreement.
Eligible Contract Participant shall mean an “eligible contract participant” as defined in the CEA and regulations thereunder.
Eligibility Date shall mean, with respect to
each Loan Party and each Swap, the date on which this Agreement or any other Loan Document becomes effective with respect to such Swap (for the avoidance of doubt, the Eligibility Date shall be the Effective Date of such Swap if this Agreement
or any other Loan Document is then in effect with respect to such Loan Party, and otherwise it shall be the Effective Date of this Agreement and/or such other Loan Document(s) to which such Loan Party is a party).
10
Environmental Laws shall mean all applicable federal, state, local, tribal, territorial and foreign Laws (including
common law), constitutions, statutes, treaties, regulations, rules, ordinances and codes and any consent decrees, settlement agreements, judgments, orders, directives, policies or programs issued by or entered into with an Official Body
pertaining or relating to: (i) pollution or pollution control; (ii) protection of human health from exposure to regulated substances; (iii) protection of the environment
and/or natural resources; (iv) employee safety in the workplace; (v) the presence, use, management, generation, manufacture, processing, extraction, treatment, recycling, refining, reclamation, labeling, packaging, sale, transport, storage,
collection, distribution, disposal or release or threat of release of regulated substances; (vi) the presence of contamination; (vii) the protection of endangered or threatened species; and (viii) the protection of environmentally sensitive
areas.
Equity Interests shall have the meaning specified in Section 6.1.2 [Subsidiaries and Owners; Investment Companies].
ERISA shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.
ERISA Event shall mean (a) with respect to a Pension Plan, a reportable event under Section 4043 of ERISA as to which event (after taking
into account notice waivers provided for in the regulations) there is a duty to give notice to the PBGC; (b) a withdrawal by Borrowers or any member of the ERISA Group from a Pension Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by Borrowers or any member of
the ERISA Group from a Multiemployer Plan, notification that a Multiemployer Plan is in reorganization, or occurrence of an event described in Section 4041A(a) of ERISA that results in the termination of a Multiemployer Plan; (d) the filing of
a notice of intent to terminate a Pension Plan, the treatment of a Pension Plan amendment as a termination under Section 4041(e) of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan; (e) an event or condition
which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) the determination that any Pension Plan or Multiemployer Plan is considered
an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430.431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (g) the imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon Borrowers or any member of the ERISA Group.
ERISA Group shall mean, at any time, the Borrowers and all members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which, together with the Borrowers, are treated as a single employer under Section 414 of the Code or Section 4001(b)(1) of ERISA.
Erroneous Payment has the meaning assigned to it in Section 10.13(a).
11
Erroneous Payment Deficiency Assignment has the meaning assigned to it in Section 10.13(d).
Erroneous Payment Impacted Class has the meaning assigned to it in Section 10.13(d).
Erroneous Payment Return Deficiency has the meaning assigned to it in Section 10.13(d).
Erroneous Payment Subrogation Rights has the meaning assigned to it in Section 10.13(d).
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.
Event of Default shall mean any of the events described in Section 9.1 [Events of Default] and referred to therein as an “Event of Default.”
Excluded Hedge Liability or Liabilities shall
mean, with respect to each Loan Party, each of its Swap Obligations if, and only to the extent that, all or any portion of this Agreement or any other Loan Document that relates to such Swap Obligation is or becomes illegal under the CEA, or
any rule, regulation or order of the CFTC, solely by virtue of such Loan Party’s failure to qualify as an Eligible Contract Participant on the Eligibility Date for such Swap. Notwithstanding anything to the contrary contained in the foregoing
or in any other provision of this Agreement or any other Loan Document, the foregoing is subject to the following provisos: (a) if a Swap Obligation arises under a master agreement governing more than one Swap, this definition shall apply only
to the portion of such Swap Obligation that is attributable to Swaps for which such guaranty or security interest is or becomes illegal under the CEA, or any rule, regulations or order of the CFTC, solely as a result of the failure by such Loan
Party for any reason to qualify as an Eligible Contract Participant on the Eligibility Date for such Swap, (b) if a guarantee of a Swap Obligation would cause such obligation to be an Excluded Hedge Liability but the grant of a security
interest would not cause such obligation to be an Excluded Hedge Liability, such Swap Obligation shall constitute an Excluded Hedge Liability for purposes of the guaranty but not for purposes of the grant of the security interest, and (c) if
there is more than one Loan Party executing this Agreement or the other Loan Documents and a Swap Obligation would be an Excluded Hedge Liability with respect to one or more of such Persons, but not all of them, the definition of Excluded Hedge
Liability or Liabilities with respect to each such Person shall only be deemed applicable to (i) the particular Swap Obligations that constitute Excluded Hedge Liabilities with respect to such Person, and (ii) the particular Person with respect
to which such Swap Obligations constitute Excluded Hedge Liabilities.
12
Excluded Taxes shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a
payment to a Recipient, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result of such Recipient being organized under the Laws of, or having its
principal office or, in the case of any Lender, its applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) in the case of a Lender, U.S.
federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (a) such Lender acquires such interest in
such Loan or Commitment (other than pursuant to an assignment request by the Borrowers under Section 5.13 [Replacement of a Lender]) or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section
5.9.7 [Status of Lenders], amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (iii) Taxes
attributable to such Recipient’s failure to comply with Section 5.9.7 [Status of Lenders], and (iv) any U.S. federal withholding Taxes imposed under FATCA (except to the extent imposed due to the
failure of the Borrowers to provide documentation or information to the IRS).
Existing Credit Agreement shall have the meaning specified in the recitals.
Existing Letters of Credit shall mean those letters of credit existing on the Closing Date and identified on Schedule 2.9.1.
Expiration Date shall mean, with respect to the Revolving Credit Commitments, December 9, 2029.
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), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
Foreign Currency Hedge shall mean any foreign exchange transaction, including spot and forward foreign currency purchases and sales, listed
or over-the-counter options on foreign currencies, non-deliverable forwards and options, foreign currency swap agreements, currency exchange rate price hedging arrangements, and any other similar transaction providing for the purchase of one
currency in exchange for the sale of another currency.
Foreign Currency Hedge Liabilities shall have the meaning assigned in the definition of Lender Provided Foreign Currency Hedge.
Foreign Lender shall mean (i) if all the Borrowers are U.S. Persons, a Lender that is not a U.S. Person, and (ii) if any of the Borrowers is
not a U.S. Person, a Lender that is resident or organized under the Laws of a jurisdiction other than that in which the Borrowers is resident for tax purposes.
Foreign Subsidiary means any Subsidiary of the Borrowers that is organized under the Laws of a jurisdiction other than the
United States, a State thereof or the District of Columbia.
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Fronting Exposure shall mean, at any time there is a Defaulting Lender, (a) with respect to the Issuing Lender, such Defaulting Lender’s
Ratable Share of the outstanding Letter of Credit Obligations with respect to Letters of Credit issued by such Issuing Lender other than Letter of Credit Obligations as to which such Defaulting Lender’s participation obligation has been
reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to any Swingline Loan Lender, such Defaulting Lender’s Ratable Share of outstanding Swingline Loans made by such Swingline Loan Lender
other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.
Fund shall mean any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing
in commercial loans, bonds and similar extensions of credit in the ordinary course of its activities.
GAAP shall mean generally accepted accounting principles as are in effect from time to time, subject to the provisions of Section 1.3
[Accounting Principles; Changes in GAAP], and applied on a consistent basis both as to classification of items and amounts.
Guarantor shall mean each of the parties to this Agreement which is designated as a “Guarantor” on the signature page hereof and each other
Person which joins this Agreement as a Guarantor after the date hereof.
Guarantor Joinder shall mean a joinder by a Person as a Guarantor under the Loan Documents in the form of Exhibit 1.1(G)(1).
Guaranty of any Person shall mean any obligation of such Person guaranteeing or in effect guaranteeing any liability or obligation of any
other Person in any manner, whether directly or indirectly, including any agreement to indemnify or hold harmless any other Person, any performance bond or other suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the ordinary course of business.
Guaranty Agreement shall mean the Continuing Agreement of Guaranty and Suretyship in substantially the form of Exhibit 1.1(G)(2)
executed and delivered by each of the Guarantors to the Administrative Agent for the benefit of the Lenders.
Hedge Bank shall mean any Person that, at the time it enters into a Lender Provided Foreign Currency Hedge or Lender Provided Interest Rate
Hedge, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Lender Provided Foreign Currency Hedge or Lender Provided Interest Rate Hedge.
Hedge Liabilities shall mean collectively, the Foreign Currency Hedge Liabilities and the Interest Rate Hedge Liabilities.
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Hedge Termination Value shall mean, in respect of any one or more interest rate hedges, commodity hedges and/or foreign currency hedges,
after taking into account the effect of any legally enforceable netting agreement relating to such interest rate hedges, commodity hedges and/or foreign currency hedges, (a) for any date on or after the date such interest rate hedges, commodity
hedges and/or foreign currency hedges 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 clause (a), the amount(s) determined as the
mark-to-market value(s) for such interest rate hedges, commodity hedges and/or foreign currency hedges, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such interest
rate hedges, commodity hedges and/or foreign currency hedges (which may include an interest rate hedge bank, a commodity hedge bank or foreign currency hedge bank, as applicable).
Increasing Lender shall have the meaning assigned to that term in Section 2.11 [Increase in Commitments and Added Term Loans].
Indebtedness shall mean, as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money, (ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit
facility, (iii) reimbursement obligations (contingent or otherwise) under any letter of credit agreement, (iv) obligations under any currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management
device, (v) any other transaction (including forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or
capital requirements (but not including trade payables and accrued expenses incurred in the ordinary course of business which are not represented by a promissory note or other evidence of indebtedness and which are not more than sixty (60) days
past due), or (vi) any Guaranty of Indebtedness for borrowed money.
Indemnified Taxes shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any
obligation of any Loan Party under any Loan Document, and (ii) to the extent not otherwise described in the preceding clause (i), Other Taxes.
Indemnitee shall have the meaning specified in Section 11.3.2 [Indemnification by the Borrowers].
Information shall mean all information received from the Loan Parties or any of their Subsidiaries relating to the Loan Parties or any of
such Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the Issuing Lender on a non‑confidential basis prior to disclosure by the Loan Parties or any
of their Subsidiaries, provided that, in the case of information received from the Loan Parties or any of their Subsidiaries after the date of this Agreement, such information shall be deemed to be confidential unless (i) it is also
filed with the Securities and Exchange Commission, (ii) it becomes or is generally known to the trade or public other than as a result of disclosure by the Administrative Agent, any Lender or the Issuing Lender; (iii) it was disclosed to the
Administrative Agent, any Lender or the Issuing Lender by a third party who, to the best knowledge of the Administrative Agent, any Lender or the Issuing Lender was not bound by a confidentiality agreement with the Company, (iv) the
Administrative Agent, any Lender or the Issuing Lender had an independent right to such information, or (v) such information is independently developed by the Administrative Agent, any Lender or the Issuing Lender or their respective agents
without reliance upon the Loan Parties’ proprietary Information.
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Insolvency Proceeding shall mean, with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any
court or any other Official Body under any bankruptcy, insolvency, reorganization or other similar Law now or hereafter in effect, or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Loan Party or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or
other, similar arrangement in respect of such Person’s creditors generally or any substantial portion of its creditors; undertaken under any Law.
Intercompany Subordination Agreement shall mean a Subordination Agreement among the Loan Parties in the form attached hereto as Exhibit
1.1(I).
Interest Coverage Ratio shall mean, as of any date of determination, the ratio of Consolidated EBITDA to interest expense of the Loan
Parties and their Subsidiaries, (i) for the four fiscal quarters then ending if such date is a fiscal quarter end or (ii) for the four fiscal quarters most recently ended if such date is not a fiscal quarter end.
Interest Period shall mean the period of time selected by the Borrowers in connection with (and to apply to) any election permitted
hereunder by the Borrowers to have Revolving Credit Loans bear interest under the Term SOFR Rate Option. Subject to the last sentence of this definition, such period shall be one (1), three (3) or six (6) Months, in each case, subject to the
availability thereof. Such Interest Period shall commence on the effective date of such Term SOFR Rate Option, which shall be (i) the Borrowing Date if the Borrowers are requesting new Loans, or (ii) the date of renewal of or conversion to the
Term SOFR Rate Option if the Borrowers are renewing or converting to the Term SOFR Rate Option applicable to outstanding Loans. Notwithstanding the second sentence hereof: (A) any Interest Period which would otherwise end on a date which is
not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (B) the Borrowers shall not
select, convert to or renew an Interest Period for any portion of the Loans that would end after the Expiration Date, and (C) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest Period) shall end of the last Business Day of the last calendar month of such Interest Period.
Interest Rate Hedge shall mean an interest rate exchange, collar, cap, swap, floor, adjustable strike cap, adjustable strike corridor,
cross-currency swap or similar agreements entered into by any Loan Party in order to provide protection to, or minimize the impact upon, such Loan Party of increasing floating rates of interest applicable to Indebtedness.
Interest Rate Hedge Liabilities shall have the meaning assigned in the definition of Lender Provided Interest Rate Hedge.
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Interest Rate Option shall mean any Term SOFR Rate Option or Base Rate Option.
International Trade Laws shall mean all Laws relating to export controls, trade embargoes, customs, and anti-boycott measures.
Inventory shall mean any and all goods, merchandise and other personal property, including, without limitation, goods in transit,
wheresoever located and whether now owned or hereafter acquired by any Loan Party which are or may at any time be held as raw materials, finished goods, work‑in‑process, supplies or materials used or consumed in the such Loan Party’s business
or held for sale or lease, including, without limitation, (a) all such property the sale or other disposition of which has given rise to Accounts and which has been returned to or repossessed or stopped in transit by such Loan Party, and (b)
all packing, shipping and advertising materials relating to all or any such property. All Inventory, whether Qualified Inventory or not, shall be subject to the Lenders’ prior security interest.
IRS shall mean the United States Internal Revenue Service.
ISP shall mean the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as
may be in effect at the applicable time).
Issuing Lender shall mean (a) PNC, in its individual capacity as issuer of Letters of Credit hereunder, and any other Lender that Borrowers,
Administrative Agent and such other Lender may agree may from time to time issue Letters of Credit hereunder, and (b) with respect to the Existing Letters of Credit, PNC, in its capacity as issuer thereof.
Johnson Family shall mean at any time, collectively, the estate of Samuel C. Johnson, the widow of Samuel C. Johnson and the children and
grandchildren of Samuel C. Johnson, the executor or administrator of the estate or other legal representative of any such Person, all trusts for the benefit of the foregoing or their heirs or any one or more of them, and all partnerships,
corporations or other entities directly or indirectly controlled by the foregoing or any one or more of them.
Joint Venture shall mean a corporation, partnership, limited liability company or other entity in which both a Loan Party and any Person
other than the Loan Parties (and their wholly-owned Subsidiaries) holds, directly or indirectly, an equity interest.
Law shall mean any law(s) (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling,
order, executive order, injunction, writ, decree, bond, judgment, authorization or approval, lien or award, or any settlement arrangement, by agreement, consent or otherwise, of any Official Body, foreign or domestic.
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Lender Provided Foreign Currency Hedge shall mean a Foreign Currency Hedge which is entered into between any Loan Party and any Hedge Bank
that: (a) is documented in a standard International Swaps and Derivatives Association Master Agreement or another reasonable and customary manner, (b) provides for the method of calculating the reimbursable amount of the provider’s credit
exposure in a reasonable and customary manner, and (c) is entered into for hedging (rather than speculative) purposes. The liabilities owing to the Hedge Bank providing any Lender Provided Foreign Currency Hedge (the “Foreign Currency Hedge Liabilities”) by any Loan Party that is party to such Lender Provided Foreign Currency Hedge shall, for purposes of this Agreement and all other Loan Documents be “Obligations” of such Person and of each
other Loan Party, be guaranteed obligations under the Guaranty Agreement and secured obligations under any other Loan Document, as applicable, and otherwise treated as Obligations for purposes of the other Loan Documents, except to the extent
constituting Excluded Hedge Liabilities of such Person. The Liens securing the Foreign Currency Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the other Loan Documents, subject to
the express provisions of Section 9.2.4 [Application of Proceeds].
Lender Provided Interest Rate Hedge shall mean an Interest Rate Hedge which is entered into between any Loan Party and any Hedge Bank that:
(a) is documented in a standard International Swaps and Derivatives Association Master Agreement or another reasonable and customary manner, (b) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in
a reasonable and customary manner, and (c) is entered into for hedging (rather than speculative) purposes. The liabilities owing to the Hedge Bank providing any Lender Provided Interest Rate Hedge (the “Interest
Rate Hedge Liabilities”) by any Loan Party that is party to such Lender Provided Interest Rate Hedge shall, for purposes of this Agreement and all other Loan Documents be “Obligations” of such Person and of each other Loan Party, be
guaranteed obligations under any Guaranty Agreement and secured obligations under any other Loan Document, as applicable, and otherwise treated as Obligations for purposes of the other Loan Documents, except to the extent constituting Excluded
Hedge Liabilities of such Person. The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the other Loan Documents, subject to the express provisions of
Section 9.2.4 [Application of Proceeds].
Lenders shall mean the financial institutions named on Schedule 1.1(B) and their respective successors and assigns as permitted
hereunder, each of which is referred to herein as a Lender. For the purpose of any Loan Document which provides for the granting of a security interest or other Lien to the Lenders or to the Administrative Agent for the benefit of the Secured
Parties as security for the Obligations, “Lenders” shall include any Affiliate of a Lender to which such Obligation is owed. Unless the context requires otherwise, the term “Lenders” includes the Swing Loan Lender, but not the Issuing Lender.
Lending Office shall mean, as to the Administrative Agent, the Issuing Lender or any Lender, the office or offices of such Person described
as such in such Lender’s Administrative Questionnaire, or such other office or offices as such Person may from time to time notify the Borrower and the Administrative Agent.
Letter of Credit shall have the meaning specified in Section 2.9.1 [Issuance of Letters of Credit]. As of the Closing Date, each of the
Existing Letters of Credit shall constitute for all purposes of this Agreement and the other Loan Documents, a Letter of Credit issue and outstanding hereunder.
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Letter of Credit Borrowing shall have the meaning specified in Section 2.9.3.3 [Disbursements, Reimbursement].
Letter of Credit Fee shall have the meaning specified in Section 2.9.2 [Letter of Credit Fees].
Letter of Credit Obligation shall mean, as of any date of determination, the aggregate amount available to be drawn under all outstanding
Letters of Credit on such date (if any Letter of Credit shall increase in amount automatically in the future, such aggregate amount available to be drawn shall currently give effect to any such future increase) plus the aggregate Reimbursement Obligations and Letter of Credit Borrowings on such date.
Letter of Credit Sublimit shall have the meaning specified in Section 2.9.1.1 [Issuance of Letters of Credit].
Lien shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed
financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).
LLC Division shall mean, in the event a Borrower or Guarantor is a limited liability company, (a) the division of any such Borrower or
Guarantor into two or more newly formed limited liability companies (whether or not such Borrower or Guarantor is a surviving entity following any such division) pursuant to Section 18-217 of the Delaware Limited Liability Company Act or any
similar provision under any similar act governing limited liability companies organized under the Laws of any other State or Commonwealth or of the District of Columbia, or (b) the adoption of a plan contemplating, or the filing of any
certificate with any applicable Official Body that results or may result in, any such division.
Loan Documents shall mean this Agreement, the Administrative Agent’s Letter, the Collateral Documents, the Guaranty Agreement, the
Intercompany Subordination Agreement, the Notes, and any other instruments, certificates or documents delivered in connection herewith or therewith.
Loan Parties shall mean the Borrowers and the Guarantors.
Loan Request shall have the meaning specified in Section 2.5 [Revolving Credit Loan Requests; Swing Loan Requests].
Loans shall mean collectively and Loan shall mean separately all Revolving Credit Loans and Swing Loans or any Revolving Credit Loan
or Swing Loan.
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Material Adverse Change shall mean any set of circumstances or events which (a) has or could reasonably be expected to have a material
adverse effect upon the validity or enforceability of this Agreement or any other Loan Document, (b) is or could reasonably be expected to be material and adverse to the business, properties, assets, financial condition or results of operations
of the Loan Parties taken as a whole, (c) impairs materially or could reasonably be expected to impair materially the ability of the Loan Parties taken as a whole to duly and punctually pay or perform any of the Obligations, or (d) impairs
materially or could reasonably be expected to impair materially the ability of the Administrative Agent or any of the Lenders, to the extent permitted, to enforce their legal remedies pursuant to this Agreement or any other Loan Document.
Minimum Collateral Amount means, at any time, Cash Collateral consisting of cash or deposit account balances, an amount equal to 105% of (a)
the Fronting Exposure of the Issuing Lender with respect to Letters of Credit issued and outstanding at such time, or (b) the Issuing Lender’s Fronting Exposure with respect to any Defaulting Lender with respect to Letters of Credit issued and
outstanding at such time, as applicable.
Month, with respect to an Interest Period under the Term SOFR Rate Option, shall mean the interval between the days in consecutive calendar
months numerically corresponding to the first day of such Interest Period. If any Term SOFR Rate Interest Period begins on a day of a calendar month for which there is no numerically corresponding day in the month in which such Interest Period
is to end, the final month of such Interest Period shall be deemed to end on the last Business Day of such final month.
Multiemployer Plan shall mean any employee pension benefit plan which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA and to which the Borrowers or any member of the ERISA Group is then making or accruing an obligation to make contributions or, within the preceding five (5) plan years, has made or had an obligation to make such contributions, or to which
the Borrowers or any member of the ERISA Group has any liability (contingent or otherwise).
New Lender shall have the meaning assigned to that term in Section 2.11 [Increase in Commitments and Added Term Loans].
New Tranche of Term Loan Commitments shall have the meaning assigned to that term in Section 2.11 [Increase in Commitments and Added Term
Loans].
Net Leverage Ratio shall mean, as of any date of determination, the ratio of (A) Net Total Consolidated Indebtedness of the Loan Parties and
their Subsidiaries on such date to (B) Consolidated EBITDA (i) for the four fiscal quarters then ending if such date is a fiscal quarter end or (ii) for the four fiscal quarters most recently ended if such date is not a fiscal quarter end.
Net Total Consolidated Indebtedness shall mean Total Consolidated Indebtedness minus the lesser of (i) $25,000,000, and (ii) Unrestricted
Cash.
Non-Consenting Lender shall have the meaning specified in Section 11.1 [Modifications, Amendments or Waivers].
Non-Defaulting Lender shall mean, at any time, each Lender that is not a Defaulting Lender at such time.
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Non-Qualifying Party shall mean any Loan Party that fails for any reason to qualify as an Eligible Contract Participant on the Effective
Date of the applicable Swap.
Notes shall mean collectively, and Note shall mean separately, the promissory notes in the form of Exhibit 1.1(N)(1)
evidencing the Revolving Credit Loans and in the form of Exhibit 1.1(N)(2) evidencing the Swing Loans.
NYFRB shall mean the Federal Reserve Bank of New York.
Obligation shall mean any obligation or liability of any of the Loan Parties, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become due, under or in connection with (i) this Agreement, the Notes, the Letters of Credit, the Administrative Agent’s Letter or
any other Loan Document whether to the Administrative Agent, any of the Lenders or their Affiliates or other persons provided for under such Loan Documents, (ii) any Lender Provided Interest Rate Hedge, (iii) any Lender Provided Foreign
Currency Hedge, and (iv) any Other Lender Provided Financial Service Products. Notwithstanding anything to the contrary contained in the foregoing, the Obligations shall not include any Excluded Hedge Liabilities.
OFAC shall mean the Office of Foreign Assets Control of the United States Department of the Treasury.
Official Body shall mean the government of the United States of America or any other nation, or of any political subdivision of such
government, whether federal, state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers
or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and 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).
Order shall have the meaning specified in Section 2.9.9 [Liability for Acts and Omissions].
Ordinary Course Hedge Payments shall mean all fees, premiums, scheduled payments and other ordinary course payments, including any payment
in relation to adjustments due to Taxes on any of the foregoing, arising under any Lender Provided Interest Rate Hedge or Lender Provided Foreign Currency Hedge and calculated in accordance with the terms
therein, but (for the avoidance of doubt) excluding any payment for the Hedge Termination Value arising under any Lender Provided Interest Rate Hedge or Lender Provided Foreign Currency Hedge.
Other Connection Taxes shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such
Recipient (or an agent or affiliate thereof) and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments
under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
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Other Lender Provided Financial Service Products shall mean agreements or other arrangements entered into between any Loan Party and any
Cash Management Bank that provides any of the following products or services to any of the Loan Parties: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, or (f) cash management,
including controlled disbursement, overdraft lines, accounts or services.
Other Taxes shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 5.13 [Replacement of a Lender]).
Overnight Bank Funding Rate shall mean, for any day, the rate comprised of both overnight federal funds and overnight eurocurrency
borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB, as set forth on its public website from time to time, and as published on the next succeeding Business Day as the
overnight bank funding rate by the NYFRB (or by such other recognized electronic source (such as Bloomberg) selected by the Administrative Agent for the purpose of displaying such rate); provided, that if such day is not a Business Day, the
Overnight Bank Funding Rate for such day shall be such rate on the immediately preceding Business Day; provided, further, that if such rate shall at any time, for any reason, no longer exist, a comparable replacement rate determined by the
Administrative Agent at such time (which determination shall be conclusive absent manifest error). If the Overnight Bank Funding Rate determined as above would be less than zero, then such rate shall be deemed to be zero. The rate of interest
charged shall be adjusted as of each Business Day based on changes in the Overnight Bank Funding Rate without notice to the Borrowers.
Participant has the meaning specified in Section 11.8.4 [Participations].
Participant Register shall have the meaning specified in Section 11.8.4 [Participations].
Participation Advance shall have the meaning specified in Section 2.9.3.3 [Disbursements, Reimbursement].
Payment Date shall mean the first day of each calendar quarter after the date hereof and on the Expiration Date or upon acceleration of the
Notes.
Payment In Full and Paid in Full shall mean the indefeasible payment in full in cash of the Loans and other Obligations hereunder,
termination of the Commitments and expiration or termination of all Letters of Credit.
PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.
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Pension Plan shall mean at any time an “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA) (including a
“multiple employer plan” as described in Sections 4063 and 4064 of ERISA, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 or Section 430 of the Code and either
(i) is sponsored, maintained or contributed to by any member of the ERISA Group for employees of any member of the ERISA Group, (ii) has at any time within the preceding five years been sponsored, maintained or contributed to by any entity
which was at such time a member of the ERISA Group for employees of any entity which was at such time a member of the ERISA Group, or in the case of a “multiple employer” or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five (5) plan years, or (iii) to which the Borrowers or any member of the ERISA Group may have any liability (contingent or otherwise).
Permitted Acquisition shall have the meaning in Section 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions].
Permitted Discretion shall mean a determination made in good faith and in the exercise of reasonable (from the perspective of a secured
lender) business judgment.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges, incurred in the ordinary course of business and which are not yet due and payable;
(ii) Pledges or deposits made in the ordinary course of business to secure payment of workmen's compensation, or to participate in any fund in connection with workmen's compensation,
unemployment insurance, old-age pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen, carriers, or other like Liens, securing obligations incurred in the ordinary course of business that are not yet due and payable and
Liens of landlords securing obligations to pay lease payments that are not yet due and payable or in default;
(iv) Good-faith pledges or deposits made in the ordinary course of business to secure performance of bids, tenders, contracts (other than for the repayment of borrowed money or as security
for Hedge Liabilities or margining related to commodities hedges) or leases, not in excess of the aggregate amount due thereunder, or to secure statutory obligations, or surety, appeal, indemnity, performance or other similar bonds required in
the ordinary course of business;
(v) Encumbrances consisting of zoning restrictions, easements or other restrictions on the use of real property, none of which materially impairs the use of such property or the value
thereof, and none of which is violated in any material respect by existing or proposed structures or land use;
(vi) Liens, security interests and mortgages in favor of the Administrative Agent for the benefit of the Lenders and their Affiliates securing the Obligations (including any Lender Provided
Interest Rate Hedge, any Lender Provided Foreign Currency Hedge, and Other Lender Provided Financial Service Products);
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(vii) Any Lien existing on the date of this Agreement and described on Schedule 1.1(P), provided that the principal amount secured thereby is not hereafter increased, and no
additional assets become subject to such Lien;
(viii) Purchase Money Security Interests and capitalized leases provided that (i) the aggregate amount of loans and deferred payments secured by such Purchase Money Security
Interests and capitalized leases shall not exceed $10,000,000 in the aggregate (excluding for the purpose of this computation any loans or deferred payments secured by Liens described on Schedule 1.1(P)), and (ii) such Liens shall be
limited to the assets acquired with such purchase money financing or leased pursuant to such capital lease; and
(ix) Liens on equipment or other capital assets of a Loan Party in connection with Indebtedness permitted under Section 8.2.1(vii) hereof;
(x) The following, if the validity or amount thereof is being contested in good faith by appropriate and lawful proceedings diligently conducted so long as levy and execution thereon have
been stayed and continue to be stayed and in each case they do not, in the aggregate, materially impair the ability of any Loan Party to perform its Obligations hereunder or under the other Loan Documents:
(1) claims or Liens for taxes, assessments or charges due and payable and subject to interest or penalty; provided that the applicable Loan Party maintains such reserves or other
appropriate provisions as shall be required by GAAP and pays all such taxes, assessments or charges forthwith upon the commencement of proceedings to foreclose any such Lien;
(2) claims, Liens or encumbrances upon, and defects of title to, real or personal property, including any attachment of personal or real property or other legal process prior to
adjudication of a dispute on the merits; or
(3) claims or Liens of mechanics, materialmen, warehousemen, carriers, or other statutory nonconsensual Liens; and
(4) Liens resulting from final judgments or orders not constituting an Event of Default described in Section 9.1.7 [Final Judgments or Orders].
Person shall mean any natural person, corporation, partnership, limited liability company, association, trust, joint venture, Official Body,
or other entity.
Platform shall mean Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.
PNC shall mean PNC Bank, National Association, its successors and assigns.
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Potential Default shall mean any event or condition which with notice or passage of time, or both, would constitute an Event of Default.
Prime Rate shall mean the interest rate per annum announced from time to time by the Administrative Agent at its Principal Office as its
then prime rate, which rate may not be the lowest or most favorable rate then being charged to commercial borrowers or others by the Administrative Agent and may not be tied to any external rate of interest or index. Any change in the Prime
Rate shall take effect at the opening of business on the day such change is announced.
Principal Office shall mean the main banking office of the Administrative Agent in Pittsburgh, Pennsylvania.
PTE shall mean a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
Purchase Money Security Interest shall mean Liens upon tangible personal property securing loans to any Loan Party or deferred payments by
such Loan Party for the purchase of such tangible personal property.
Qualified Accounts shall mean any Accounts which meet the requirements specified on Schedule 1.1(Q)(1).
Qualified ECP Loan Party shall mean each Loan Party that on the Eligibility Date is (a) a corporation, partnership, proprietorship,
organization, trust, or other entity other than a “commodity pool” as defined in Section 1a(10) of the CEA and CFTC regulations thereunder that has total assets exceeding $10,000,000, or (b) an Eligible Contract Participant that can cause
another person to qualify as an Eligible Contract Participant on the Eligibility Date under Section 1a(18)(A)(v)(II) of the CEA by entering into or otherwise providing a “letter of credit or keepwell, support, or other agreement” for purposes
of Section 1a(18)(A)(v)(II) of the CEA.
Qualified Inventory shall mean any Inventory which meets the requirements specified on Schedule 1.1(Q)(2).
Ratable Share shall mean:
(i) with respect to a Lender’s obligation to make Revolving Credit Loans, participate in Letters of Credit and other Letter of Credit Obligations, participate in Swing Loans, and receive
payments, interest, and fees related thereto, the proportion that such Lender’s Revolving Credit Commitment bears to the Revolving Credit Commitments of all of the Lenders, provided that if the Revolving Credit Commitments have terminated
or expired, the Ratable Shares for purposes of this clause shall be determined based upon the Revolving Credit Commitments most recently in effect, giving effect to any assignments.
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(ii) with respect to all other matters as to a particular Lender, the percentage obtained by dividing (i) such Lender’s Revolving Credit Commitment, by (ii) the sum of the aggregate amount
of the Revolving Credit Commitments of all Lenders; provided however that if the Revolving Credit Commitments have terminated or expired, the computation in this clause shall be determined based upon the Revolving Credit Commitments most
recently in effect, giving effect to any assignments, and not on the current amount of the Revolving Credit Commitments and provided further in the case of Section 2.10 [Defaulting Lenders] when a Defaulting Lender shall exist, “Ratable
Share” shall mean the percentage of the aggregate Commitments (disregarding any Defaulting Lender's Commitment) represented by such Lender's Commitment.
Recipient shall mean (i) the Administrative Agent, (ii) any Lender and (iii) the Issuing Lender, as applicable.
Reimbursement Obligation shall have the meaning specified in Section 2.9.3.1 [Disbursements, Reimbursement].
Related Parties shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents
and advisors of such Person and of such Person’s Affiliates.
Relief Proceeding shall mean any proceeding seeking a decree or order for relief in respect of any Loan Party or Subsidiary of a Loan Party
in a voluntary or involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator,
conservator (or similar official) of any Loan Party or Subsidiary of a Loan Party for any substantial part of its property, or for the winding-up or liquidation of its affairs, or an assignment for the benefit of its creditors.
Removal Effective Date shall mean as is specified in Section 10.6 [Resignation of Administrative Agent].
Required Lenders shall mean
(A) If there exists fewer than three (3) Lenders, all Lenders (other than any Defaulting Lender), and
(B) If there exist three (3) or more Lenders, Lenders (other than any Defaulting Lender) having more than 66 2/3% of the sum of the aggregate amount of the
Revolving Credit Commitments of the Lenders (excluding any Defaulting Lender) or, after the termination of the Revolving Credit Commitments, the outstanding Revolving Credit Loans and Ratable Share of Letter of Credit Obligations of the Lenders
(excluding any Defaulting Lender).
Required Share shall have the meaning assigned to such term in Section 5.11 [Settlement Date Procedures].
Resignation Effective Date shall mean as is specified in Section 10.6 [Resignation of Administrative Agent].
Resolution Authority means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
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Restricted Investments shall mean all of the following with respect to any of the Foreign Subsidiaries: (i) investments or contributions by
any of the Loan Parties directly or indirectly in or to the capital of or other payments to or for the benefit of such Foreign Subsidiary, (ii) loans by any of the Loan parties directly or indirectly to such Foreign Subsidiary, (iii) guaranties
by any of the Loan Parties directly or indirectly of the obligations of such Foreign Subsidiary, or (iv) other obligations, contingent or otherwise, of any of the Loan Parties to or for the benefit of such Foreign Subsidiary.
Revolving Credit Commitment shall mean, as to any Lender at any time, the amount initially set forth opposite its name on Schedule
1.1(B) in the column labeled "Amount of Commitment for Revolving Credit Loans", as such Commitment is thereafter assigned or modified and Revolving Credit Commitments shall mean the aggregate Revolving Credit Commitments of all of
the Lenders.
Revolving Credit Loans shall mean collectively and Revolving Credit Loan shall mean separately all Revolving Credit Loans or any
Revolving Credit Loan made by the Lenders or one of the Lenders to the Borrowers pursuant to Section 2.1 [Revolving Credit Commitments] or Section 2.9.3 [Disbursements, Reimbursement].
Revolving Facility Usage shall mean at any time the sum of the outstanding Revolving Credit Loans, the outstanding Swing Loans, and the
Letter of Credit Obligations.
Sanctioned Jurisdiction shall mean, at any time, any country, area, territory, or jurisdiction that is the subject or target of
comprehensive Sanctions (as of the date of this Agreement, Cuba, Iran, North Korea, and the Crimea, Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine), as well as the Kherson and Zaporizhzhia regions of Ukraine.
Sanctioned Person shall mean any Person that is (a) located in, organized under the Laws of, or ordinarily resident in a Sanctioned
Jurisdiction; (b) identified on any sanctions-related list maintained by any Compliance Authority; (c) owned 50% or more, in the aggregate, directly or indirectly by, controlled by, or acting for, on behalf of, or at the direction of, one or
more Persons described in clauses (a) or (b) above; or (d) otherwise the subject or target of Sanctions.
Sanctions shall mean Laws relating to economic or financial sanctions, sectoral sanctions, or secondary sanctions, administered, or enforced
from time to time by any Compliance Authority.
Schedule of Accounts shall mean a detailed aged trial balance of all then existing Accounts in form and substance satisfactory to
Administrative Agent, specifying in each case the names, addresses, face amount and dates of invoice(s) for each Account Debtor obligated on an Account so listed and, such other matters and information relating to the status of the Accounts
and/or the Account Debtors so scheduled as the Administrative Agent may from time to time reasonably request.
Schedule of Inventory shall mean a current schedule of Inventory in form and substance satisfactory to the Administrative Agent.
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Schedule of Payables shall mean a detailed listing of the Loan Parties’ existing accounts payable, specifying the names of each creditor and
the amount owed to such creditor and such matters and information relating to the status of the Loan Parties’ accounts payable so scheduled as the Administrative Agent may from time to time reasonably request.
Security Agreement shall mean the Security Agreement, dated of even date herewith, executed and delivered by each of the Loan Parties to the
Administrative Agent for the benefit of the Secured Parties.
Secured Parties shall mean, collectively, the Administrative Agent, the Lenders, the Issuing Lender[s], the Cash Management Banks, the Hedge
Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 10.5 [Delegation of Duties], and the other Persons the Obligations owing to which are or are purported to be secured by the Collateral
under the terms of the Collateral Documents.
Settlement Date shall mean the applicable Business Day on which the Administrative Agent elects to effect settlement pursuant Section 5.11
[Settlement Date Procedures].
SOFR shall mean, for any day, a rate 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).
SOFR Floor shall mean a rate of interest per annum equal to zero basis points (0.0%).
Solvent shall mean, with respect to any Person on any date of determination, taking into account any right of reimbursement, contribution or
similar right available to such Person from other Persons, that on such date (i) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (ii) the present
fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person’s ability to pay as such debts and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would
constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Springing Borrowing Base Trigger Event shall mean the Revolving Facility Usage is equal to or greater than fifty (50%) of the Revolving
Credit Commitments.
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Standard & Poor’s shall mean S&P Global Ratings Services, a division of S&P Global, Inc.
Statements shall have the meaning specified in Section 6.1.6(i) [Historical Statements].
Subsidiary of any Person at any time shall mean any corporation, trust, partnership, limited liability company or other business entity (i)
of which more than 50% of the outstanding voting securities or other interests normally entitled to vote for the election of one or more directors or trustees (regardless of any contingency which does or may suspend or dilute the voting rights)
is at such time owned directly or indirectly by such Person or one or more of such Person’s Subsidiaries, or (ii) which is controlled or capable of being controlled by such Person or one or more of such Person’s Subsidiaries.
Subsidiary Equity Interests shall have the meaning specified in Section 6.1.2 [Subsidiaries and Owners; Investment Companies].
Swap shall mean any “swap” as defined in Section 1a(47) of the CEA and regulations thereunder, other than (a) a swap entered into, or
subject to the rules of, a board of trade designated as a contract market under Section 5 of the CEA, or (b) a commodity option entered into pursuant to CFTC Regulation 32.3(a).
Swap Obligation shall mean any obligation to pay or perform under any agreement, contract or transaction that constitutes a Swap which is
also a Lender Provided Interest Rate Hedge, or a Lender Provided Foreign Currency Hedge.
Swing Loan Commitment shall have the meaning specified in Section 2.1.2 [Swing Loan Commitment].
Swing Loan Lender shall mean PNC, in its capacity as a lender of Swing Loans.
Swing Loan Note shall mean the Swing Loan Note of the Borrowers in the form of Exhibit 1.1(N)(2) evidencing the Swing Loans,
together with all amendments, extensions, renewals, replacements, refinancings or refundings thereof in whole or in part.
Swing Loan Request shall mean a request for Swing Loans made in accordance with Section 2.5.2 [Swing Loan Requests] hereof.
Swing Loans shall mean collectively and Swing Loan shall mean separately all Swing Loans or any Swing Loan made by the Swing Loan
Lender to the Borrowers pursuant to Section 2.1.2 [Swing Loan Commitment] hereof.
Taxes shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Official Body, including any interest, additions to tax or penalties applicable thereto.
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Term SOFR Administrator shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference
Rate selected by the Administrative Agent in its reasonable discretion).
Term SOFR Rate shall mean, with respect to any amount to which the Term SOFR Rate Option applies, for any Interest Period, the interest rate
per annum determined by the Administrative Agent (rounded upwards, at the Administrative Agent’s discretion, to the nearest 1/100th of 1%) equal to the Term SOFR Reference Rate for a tenor comparable to such Interest Period, as such rate is
published by the Term SOFR Administrator on the day (the “Term SOFR Determination Date”) that is two (2) Business Days prior to the first day of such Interest Period. If the Term SOFR Reference Rate for the applicable tenor has not been
published or replaced with a Benchmark Replacement by 5:00 p.m. (Pittsburgh, Pennsylvania time) on the Term SOFR Determination Date, then the Term SOFR Reference Rate shall be the Term SOFR Reference Rate for such tenor on the first Business
Day preceding such Term SOFR Determination Date for which such Term SOFR Reference Rate for such tenor was published in accordance herewith, so long as such first preceding Business Day is not more than three (3) Business Days prior to such
Term SOFR Determination Date. If the Term SOFR Rate, determined as provided above, would be less than the SOFR Floor, then the Term SOFR Rate shall be deemed to be the SOFR Floor. The Term SOFR Rate shall be adjusted automatically without
notice to the Borrower on and as of the first day of each Interest Period.
Term SOFR Rate Loan shall mean a Loan that bears interest based on the Term SOFR Rate.
Term SOFR Rate Option shall mean the option of the Borrower to have Loans bear interest at the rate and under the terms specified in Section
3.1.1(ii) [Revolving Credit Term SOFR Rate Option.
Term SOFR Reference Rate shall mean the forward-looking term rate based on SOFR.
Total Consolidated Indebtedness shall mean, as of any date of determination, the sum of total Indebtedness of the Loan Parties and their
Subsidiaries.
UCP shall mean the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600 (or such
later version thereof as may be in effect at the applicable time).
UK Financial Institution shall mean any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from 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 UK Financial Institution.
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Unrestricted Cash shall mean, as of any date of determination, all cash and cash equivalents of the Loan Parties, other than cash and cash
equivalents disclosed as restricted on the consolidated financial statements of the Loan Parties, in each case of the Loan Parties determined and combined and consolidated in accordance with GAAP.
USA PATRIOT Act shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.
U.S. Government Securities Business Day shall mean any day except for (a) a Saturday or Sunday or (b) 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.
U.S. Person shall mean any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
U.S. Tax Compliance Certificate shall have the meaning specified in Section 5.9.7 [Status of Lenders].
Withholding Agent shall mean any Loan Party and the Administrative Agent.
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.
1.2 Construction. Unless the context of this Agreement otherwise clearly requires, the following rules of construction
shall apply to this Agreement and each of the other Loan Documents: (i) references to the plural include the singular, the plural, the part and the whole and the words “include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”; (ii) the words “hereof,” “herein,” “hereunder,” “hereto” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document as a whole; (iii) article, section,
subsection, clause, schedule and exhibit references are to this Agreement or other Loan Document, as the case may be, unless otherwise specified; (iv) reference to any Person includes such Person's successors and assigns; (v) reference to any
agreement, including this Agreement and any other Loan Document together with the schedules and exhibits hereto or thereto, document or instrument means such agreement, document or instrument as amended, modified, replaced, substituted for,
superseded or restated; (vi) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding,” and “through” means “through and including”; (vii) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (viii) section headings herein and in each other Loan Document are
included for convenience and shall not affect the interpretation of this Agreement or such Loan Document, and (ix) unless otherwise specified, all references herein to times of day shall constitute references to Eastern Time.
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1.3 Accounting Principles; Changes in GAAP. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed
to such terms by GAAP; provided, however, that all accounting terms used in Section 8.2 [Negative Covenants] (and all defined terms used in the definition of any accounting term used in Section 8.2) shall have the meaning given to such terms (and
defined terms) under GAAP as in effect on the date hereof applied on a basis consistent with those used in preparing Statements referred to in Section 6.1.6(i) [Historical Statements]. Notwithstanding the foregoing, if the Borrowers notify the
Administrative Agent in writing that the Borrowers wish to amend any financial covenant in Section 8.2 of this Agreement, any related definition and/or the definition of the term Net Leverage Ratio for purposes of interest, Letter of Credit Fee
and Commitment Fee determinations or any negative covenant to eliminate the effect of any change in GAAP occurring after the Closing Date on the operation of such financial covenants and/or interest, Letter of Credit Fee or Commitment Fee
determinations (or if the Administrative Agent notifies the Borrowers in writing that the Required Lenders wish to amend any financial covenant in Section 8.2, any related definition and/or the definition of the term Net Leverage Ratio for
purposes of interest, Letter of Credit Fee and Commitment Fee determinations or any negative covenant to eliminate the effect of any such change in GAAP), then the Administrative Agent, the Lenders and the Borrowers shall negotiate in good faith
to amend such ratios or requirements to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, the Loan Parties' compliance with such covenants
and/or the definition of the term Net Leverage Ratio for purposes of interest, Letter of Credit Fee and Commitment Fee determinations 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 covenants or definitions are amended in a manner satisfactory to the Borrowers and the Required Lenders, and the Loan Parties shall provide to the Administrative Agent, when they deliver
their financial statements pursuant to Section 8.3.1 [Quarterly Financial Statements] and 8.3.2 [Annual Financial Statements] of this Agreement, such reconciliation statements as shall be reasonably requested by the Administrative Agent.
Notwithstanding the foregoing, leases shall continue to be classified and accounted for on a basis consistent with that reflected in the Statements for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto
(including, but not limited to, ASU No. 2016-02), unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.
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1.4 Benchmark Replacement Notification; Rates. Section 4.4.4 [Benchmark Replacement Setting] of this Agreement provides a mechanism for determining an alternative rate of interest
in the event that any Benchmark is no longer available or in certain other circumstances. The Administrative Agent does not warrant or accept any responsibility for and shall not have any liability with respect to, (a) the continuation of,
administration of, submission of or calculation of, or any other matter related to, any Benchmark or any component definition thereof or rates referred to in the definition thereof, or any alternative or successor rate thereto, or replacement
rate therefor (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, such Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. The Administrative Agent and its
affiliates or other related entities may engage in transactions that affect the calculation of any Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case,
in a manner adverse to the Borrower or any other person or entity. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain any Benchmark, any component definition thereof or rates referred to
in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the 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.
1.5 Conforming Changes Relating to the Term SOFR Rate. With respect to the Term SOFR Rate the Administrative 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; provided that, the Administrative Agent shall provide notice to the Borrower and the Lenders of each such amendment implementing such Conforming Changes reasonably
promptly after such amendment becomes effective.
2.1.1 Revolving Credit Loans. Subject to the terms and conditions hereof and relying upon the representations and warranties
herein set forth, each Lender severally agrees to make Revolving Credit Loans to the Borrowers at any time or from time to time on or after the date hereof to the Expiration Date; provided that after giving effect to each such Loan (i)
the aggregate amount of Revolving Credit Loans from such Lender shall not exceed such Lender’s Revolving Credit Commitment minus such Lender’s Ratable Share of the outstanding Swing Loans and Letter of
Credit Obligations and (ii) the Revolving Facility Usage shall not exceed the Revolving Credit Commitments. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrowers may borrow, repay and reborrow
pursuant to this Section 2.1.
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2.1.2 Swing Loan Commitment. Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, and in order to facilitate loans and repayments between
Settlement Dates, the Swing Loan Lender may, at its option, cancelable at any time for any reason whatsoever, make swing loans (the “Swing Loans”) to the Borrowers at any time or from time to time after the
date hereof to, but not including, the Expiration Date, in an aggregate principal amount up to but not in excess of $10,000,000.00 (the “Swing Loan Commitment”), provided that after giving effect to such
Swing Loan, (i) the aggregate amount of any Lender’s Revolving Credit Loans plus such Lender’s Ratable Share of the outstanding Swing Loans and Letter of Credit Obligations shall not exceed such Lender’s Revolving Credit Commitment, and (ii) the
Revolving Facility Usage shall not exceed the aggregate Revolving Credit Commitments of the Lenders. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrowers may borrow, repay and reborrow
pursuant to this Section 2.1.2.
2.2 Nature of Lenders' Obligations with Respect to Revolving Credit Loans. Each Lender
shall be obligated to participate in each request for Revolving Credit Loans pursuant to Section 2.5 [Revolving Credit Loan Requests; Swing Loan Requests] in accordance with its Ratable Share. The aggregate of each Lender’s Revolving Credit
Loans outstanding hereunder to the Borrowers at any time shall never exceed its Revolving Credit Commitment in effect at such time minus its Ratable Share of the outstanding Swing Loans and Letter of
Credit Obligations. The obligations of each Lender hereunder are several. The failure of any Lender to perform its obligations hereunder shall not affect the Obligations of the Borrowers to any other party nor shall any other party be liable
for the failure of such Lender to perform its obligations hereunder. The Lenders shall have no obligation to make Revolving Credit Loans hereunder on or after the Expiration Date.
2.3 Commitment Fees. Accruing for each day from the date
hereof until the Expiration Date (and without regard to whether the conditions to making Revolving Credit Loans are then met), the Borrowers agree to pay to the Administrative Agent for the account of each Lender according to its Ratable Share, a
nonrefundable commitment fee (the “Commitment Fee”) equal to the Applicable Commitment Fee Rate (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) multiplied
by the daily difference between the amount of (i) the Revolving Credit Commitments and (ii) the Revolving Facility Usage (provided however, that solely in connection with determining the share of each Lender in the Commitment Fee, the
Revolving Facility Usage with respect to the portion of the Commitment Fee allocated to PNC shall include the full amount of the outstanding Swing Loans, and with respect to the portion of the Commitment Fee allocated by the Administrative Agent
to all of the Lenders other than PNC, such portion of the Commitment Fee shall be calculated (according to each such Lender’s Ratable Share) as if the Revolving Facility Usage excludes the outstanding Swing Loans); provided, further,
that any Commitment Fee accrued with respect to the Revolving Credit Commitment of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Borrowers so
long as such Lender shall be a Defaulting Lender except to the extent that such Commitment Fee shall otherwise have been due and payable by the Borrowers prior to such time; and provided further that no Commitment Fee shall accrue
with respect to the Revolving Credit Commitment of a Defaulting Lender so long as such Lender shall be a Defaulting Lender. Subject to the proviso in the directly preceding sentence, all Commitment Fees shall be payable in arrears on each
Payment Date.
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2.4 Termination or Reduction of Revolving Credit Commitments. The Borrowers shall have the right, upon not less than three (3) Business Days’ notice
to the Administrative Agent, to terminate the Revolving Credit Commitments or, from time to time, to reduce the aggregate amount of the Revolving Credit Commitments (ratably among the Lenders in proportion to their Ratable Shares); provided
that no such termination or reduction of Revolving Credit Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Credit Loans made on the effective date thereof, the Revolving Facility Usage would
exceed the aggregate Revolving Credit Commitments of the Lenders and provided further that in the event the Revolving Credit Commitments are reduced to an aggregate amount less than the Letter of Credit Sublimit or the Swing Loan Commitment then
in effect, the Letter of Credit Sublimit and the Swing Loan Commitment, as applicable, shall be reduced by an amount such that none of the Letter of Credit Sublimit and the Swing Loan Commitment, as applicable, exceed the Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $5,000,000 or a whole multiple thereof and shall reduce permanently the Revolving Credit Commitments then in effect. Any such reduction or termination shall be accompanied by
prepayment of the Notes, together with outstanding Commitment Fees, and the full amount of interest accrued on the principal sum to be prepaid (and all amounts referred to in Section 5.10 [Indemnity] hereof) to the extent necessary to cause the
aggregate Revolving Facility Usage after giving effect to such prepayments to be equal to or less than the Revolving Credit Commitments as so reduced or terminated. Any notice to reduce the Revolving Credit Commitments under this Section 2.4
shall be irrevocable.
2.5.1 Revolving Credit Loan Requests.
Except as otherwise provided herein, the Borrowers may from time to time prior to the Expiration Date request the Lenders to make Revolving Credit Loans, or renew or convert the Interest Rate Option applicable to existing Revolving Credit Loans
pursuant to Section 4.2 [Interest Periods], by delivering to the Administrative Agent, not later than 1:00 p.m., (i) three (3) Business Days prior to the proposed Borrowing Date with respect to the making of Revolving Credit Loans to which the
Term SOFR Rate Option applies or the conversion to or the renewal of the Term SOFR Rate Option for any Loans; and (ii) the same Business Day of the proposed Borrowing Date with respect to the making of a Revolving Credit Loan to which the Base
Rate Option applies or the last day of the preceding Interest Period with respect to the conversion to the Base Rate Option for any Loan, a duly completed request therefor substantially in the form of Exhibit 2.5.1 or a request by
telephone immediately confirmed in writing by letter, facsimile or telex in such form (each, a “Loan Request”), it being understood that the Administrative Agent may rely on the authority of any individual
making such a telephonic request without the necessity of receipt of such written confirmation. Each Loan Request shall be irrevocable and shall specify the Interest Rate Option and the aggregate amount of the proposed Loans comprising each
Borrowing Tranche, and, if applicable, the Interest Period, which amounts shall be in (x) integral multiples of $500,000 and not less than $1,000,000 for each Borrowing Tranche under the Term SOFR Rate Option, and (y) integral multiples of
$100,000 and not less than $500,000 for each Borrowing Tranche under the Base Rate Option. In the case of a renewal of a Term SOFR Rate Option at the end of an Interest Period, the first day of the new Interest Period shall be the last day of
the preceding Interest Period, without duplication in payment of interest for such day.
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2.5.2 Swing Loan Requests. Except as
otherwise provided herein, the Borrowers may from time to time prior to the Expiration Date request the Swing Loan Lender to make Swing Loans by delivery to the Swing Loan Lender not later than 1:00 p.m. on the proposed Borrowing Date of a duly
completed request therefor substantially in the form of Exhibit 2.5.2 hereto or a request by telephone immediately confirmed in writing by letter, facsimile or telex (each, a “Swing Loan Request”),
it being understood that the Administrative Agent may rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation. Each Swing Loan Request shall be irrevocable and shall
specify the proposed Borrowing Date and the principal amount of such Swing Loan, which shall be not less than $100,000.
2.6 Making Revolving Credit Loans and Swing Loans; Presumptions by the Administrative Agent;
Repayment of Revolving Credit Loans; Borrowings to Repay Swing Loans.
2.6.1 Making Revolving Credit Loans. The Administrative Agent shall, promptly after receipt by
it of a Loan Request pursuant to Section 2.5 [Revolving Credit Loan Requests; Swing Loan Requests], notify the Lenders of its receipt of such Loan Request specifying the information provided by the Borrowers and the apportionment among the
Lenders of the requested Revolving Credit Loans as determined by the Administrative Agent in accordance with Section 2.2 [Nature of Lenders' Obligations with Respect to Revolving Credit Loans]. Each Lender shall remit its apportioned share (as
provided to it by the Administrative Agent) of the principal amount of each Revolving Credit Loan to the Administrative Agent such that the Administrative Agent is able to, and the Administrative Agent shall, to the extent the Lenders have made
funds available to it for such purpose and subject to Section 7.2 [Each Loan or Letter of Credit], fund such Revolving Credit Loans to the Borrowers in U.S. Dollars and immediately available funds at the Principal Office prior to 3:00 p.m., on
the applicable Borrowing Date; provided that if any Lender fails to remit such funds to the Administrative Agent in a timely manner, the Administrative Agent may elect in its sole discretion to fund with its own funds the Revolving Credit
Loans of such Lender on such Borrowing Date, and such Lender shall be subject to the repayment obligation in Section 2.6.2 [Presumptions by the Administrative Agent].
2.6.2 Presumptions by the Administrative Agent. Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed time of any Loan that such Lender will not make available to the Administrative Agent such Lender's share of such Loan, the Administrative Agent may assume that such Lender has made such share
available on such date in accordance with Section 2.6.1 [Making Revolving Credit Loans] and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Loan available to the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from
and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Effective Federal Funds Rate and
a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrowers, the interest rate applicable to Loans under the Base Rate Option. If
such Lender pays its share of the applicable Loan to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan. Any payment by the Borrowers shall be without prejudice to any claim the Borrowers may have against a
Lender that shall have failed to make such payment to the Administrative Agent.
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2.6.3 Making Swing Loans. So long as the Swing Loan Lender elects to make Swing Loans, the Swing Loan Lender shall, after
receipt by it of a Swing Loan Request pursuant to Section 2.5.2, [Swing Loan Requests] fund such Swing Loan to the Borrowers in U.S. Dollars and immediately available funds at the Principal Office prior to 4:00 p.m. on the Borrowing Date.
2.6.4 Repayment of Revolving Credit Loans. The Borrowers shall repay the outstanding principal amount of all Revolving
Credit Loans together with all outstanding interest thereon on the Expiration Date.
2.6.5.1 Upon the making of a Swing Loan (whether before or after the occurrence of a Potential Default or an Event of Default and regardless of whether a settlement has been requested with
respect to such Swing Loan), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from PNC, without recourse or warranty, an undivided interest and participation in such Swing
Loan in proportion to its Ratable Share. The Swing Loan Lender may, at its option, exercisable at any time for any reason whatsoever, demand repayment of any or all of the outstanding Swing Loans, and each Lender shall immediately either (i)
make a Revolving Credit Loan in an amount equal to such Lender's Ratable Share of the aggregate principal amount of the outstanding Swing Loans with respect to which repayment is demaneded, plus, if the
Swing Loan Lender so requests, accrued interest thereon, provided that no Lender shall be obligated in any event to make aggregate Revolving Credit Loans in excess of its Revolving Credit Commitment in effect at such time minus its Ratable Share of Letter of Credit Obligations and minus its Ratable Share of any Swing Loans not so being repaid, or (ii) during the continuance of an Insolvency Proceeding or Relief Proceeding with
respect to a Borrower, fund such Swing Loan participations by paying to the Swing Loan Lender such Lender’s Ratable Share of the outstanding Swing Loans. Revolving Credit Loans made pursuant to the preceding sentence shall bear interest at the
Base Rate Option and shall be deemed to have been properly requested in accordance with Section 2.5.1 [Revolving Credit Loan Requests] without regard to any of the requirements of that provision. The Swing Loan Lender shall provide notice to the
Lenders (which may be telephonic or written notice by letter, facsimile or telex) that such Revolving Credit Loans are to be made under this Section 2.6.5 and of the apportionment among the Lenders, and the Lenders shall be unconditionally
obligated to fund such Revolving Credit Loans (whether or not the conditions specified in Section 2.5.1 [Revolving Credit Loan Requests] are then satisfied) by the time the Swing Loan Lender so requests, which shall not be earlier than 3:00 p.m.
on the Business Day next after the date the Lenders receive such notice from the Swing Loan Lender.
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2.6.5.2 If any Lender fails to make available to the Administrative Agent for the account of PNC (as the Swing Loan Lender) any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.6.5 by the time specified in Section 2.6.5.1, the Swing Loan Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for
the period from the date such payment is required to the date on which such payment is immediately available to the Swing Loan Lender at a rate per annum equal to the greater of the Effective Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Loan Lender in connection with the foregoing. If such Lender pays such
amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Revolving Credit Loan with respect to such prepayment. A certificate of the Swing Loan Lender submitted to any Lender (through the Administrative
Agent) with respect to any amounts owing under this Section 2.6.5.2 shall be conclusive absent manifest error.
2.6.6 Swing Loans Under Cash Management Agreements. In addition to
making Swing Loans pursuant to the foregoing provisions of Section 2.6.3 [Making Swing Loans], without the requirement for a specific request from the Borrowers pursuant to Section 2.5.2 [Swing Loan Requests], the Swing Loan Lender may make Swing
Loans to the Borrowers in accordance with the provisions of the agreements between the Borrowers and such Swing Loan Lender relating to the Borrowers’ deposit, sweep and other accounts at such Swing Loan Lender and related arrangements and
agreements regarding the management and investment of the Borrowers’ cash assets as in effect from time to time (the “Cash Management Agreements”) to the extent of the daily aggregate net negative balance
in the Borrowers’ accounts which are subject to the provisions of the Cash Management Agreements. Swing Loans made pursuant to this Section 2.6.6 in accordance with the provisions of the Cash Management Agreements shall (i) be subject to the
limitations as to aggregate amount set forth in Section 2.1.2 [Swing Loan Commitment], (ii) not be subject to the limitations as to individual amount set forth in Section 2.5.2 [Swing Loan Requests], (iii) be payable by the Borrowers, both as to
principal and interest, at the rates and times set forth in the Cash Management Agreements (but in no event later than the Expiration Date), (iv) not be made at any time after such Swing Loan Lender has received written notice of the occurrence
of an Event of Default and so long as such shall continue to exist, or, unless consented to by the Required Lenders, a Potential Default and so long as such shall continue to exist, (v) if not repaid by the Borrowers in accordance with the
provisions of the Cash Management Agreements, be subject to each Lender's obligation pursuant to Section 2.6.5 [Borrowings to Repay Swing Loans], and (vi) except as provided in the foregoing subsections (i) through (v), be subject to all of the
terms and conditions of this Section 2.
2.7 Notes. The Obligation of the Borrowers to repay the aggregate unpaid principal amount of the Revolving Credit Loans
and Swing Loans made to it by each Lender, together with interest thereon, may (if requested by a particular Lender) be evidenced by a Note, dated the Closing Date payable to the order of such Lender in a face amount equal to the Revolving Credit
Commitment or the Swing Loan Commitment, as applicable, of such Lender.
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2.8 Use of Proceeds. The proceeds of the Loans shall be used (a) to refinance existing Indebtedness outstanding under
the Existing Credit Agreement, (b) to fund ongoing working capital needs and for Capital Expenditures and general corporate purposes, and (c) to finance Permitted Acquisitions.
2.9.1 Issuance of Letters of Credit. The Borrowers or any Loan
Party may at any time prior to the Expiration Date request the issuance of a letter of credit (each a “Letter of Credit”) for its own account or the account of another Loan Party, or the amendment or
extension of an existing Letter of Credit, by delivering or transmitting electronically, or having such other Loan Party deliver or transmit electronically to the Issuing Lender (with a copy to the Administrative Agent) a completed application
for letter of credit, or request for such amendment or extension, as applicable, in such form as the Issuing Lender may specify from time to time by no later than 10:00 a.m. at least five (5) Business Days, or such shorter period as may be agreed
to by the Issuing Lender, in advance of the proposed date of issuance, amendment or extension. The Borrowers or any Loan Party shall authorize and direct the Issuing Lender to name the Borrowers or any Loan Party as the “Applicant” or “Account
Party” of each Letter of Credit. Promptly after receipt of any letter of credit application, the Issuing Lender shall confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such
Letter of Credit application and if not, such Issuing Lender will provide the Administrative Agent with a copy thereof. All letters of credit which are identified on Schedule 2.9.1 hereto, which shall
consist of all letters of credit outstanding on the Closing Date under the Existing Credit Agreement, shall be deemed to have been issued under this Agreement and shall constitute Letters of Credit hereunder.
2.9.1.1 Unless the Issuing Lender has received notice from any Lender, the Administrative Agent or any Loan Party, at least one (1) day prior to the requested date of issuance, amendment or
extension of the applicable Letter of Credit, that one or more applicable conditions in Section 7 [Conditions of Lending and Issuance of Letters of Credit] is not satisfied, then, subject to the terms and conditions hereof and in reliance on the
agreements of the other Lenders set forth in this Section 2.9, the Issuing Lender or any of the Issuing Lender’s Affiliates will issue the proposed Letter of Credit or agree to such amendment or extension, provided that each Letter of Credit
shall (A) have a maximum maturity of twelve (12) months from the date of issuance, and (B) in no event expire later than the Expiration Date and provided further that in no event shall (i) the Letter of Credit Obligations exceed, at any one time,
$10,000,000.00 (the “Letter of Credit Sublimit”) or (ii) the Revolving Facility Usage exceed, at any one time, the Revolving Credit Commitments in effect at such time. Each request by the Borrowers for the
issuance, amendment or extension of a Letter of Credit shall be deemed to be a representation by the Borrowers that it shall be in compliance with the preceding sentence and with Section 7 [Conditions of Lending and Issuance of Letters of Credit]
after giving effect to the requested issuance, amendment or extension of such Letter of Credit. Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to the beneficiary thereof, the applicable Issuing Lender
will also deliver to the Borrowers and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
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2.9.1.2 Notwithstanding Section 2.9.1.1, the Issuing Lender shall not be under any obligation to issue any Letter of Credit if (i) any order, judgment or decree of any Official Body or
arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender from issuing the Letter of Credit, or any Law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Official
Body with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the Issuing Lender with respect
to the Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or any such order, judgement or decree, or Law request of directive,
shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Lender in good faith deems material to it, (ii) the issuance of the Letter of Credit would violate one
or more policies of the Issuing Lender applicable to letters of credit generally, or (iii) any Lender is at that time a Defaulting Lender, unless the Issuing Lender has entered into arrangements, including the delivery of Cash Collateral,
satisfactory to the Issuing Lender (in its sole discretion) with the Borrower or such Lender to eliminate the Issuing Lender’s actual or potential Fronting Exposure (after giving effect to Section 2.10.1(iv) [Reallocation of Participations to
Reduce Fronting Exposure] with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other Letter of Credit Obligations as to which the Issuing Lender has actual or
potential Fronting Exposure, as it may elect in its sole discretion.
2.9.1.3 Unless otherwise agreed by an Issuing Lender when a Letter of Credit is issued or amended (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of
the ISP shall be stated therein to apply to each standby letter of credit, and (ii) the rules of the UCP shall be stated therein to apply to each commercial letter of credit. Notwithstanding the foregoing, no Issuing Lender shall be responsible
to the Borrower for, and such Issuing Lender’s rights and remedies against the Borrower shall not be impaired by, any action or inaction of such Issuing Lender required or permitted under any law, order, or practice that is required or permitted
to be applied to any Letter of Credit or this Agreement, including the Laws or any order of a jurisdiction where such Issuing Lender or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions,
opinions, practice statements, or official commentary of the International Chamber of Commerce Banking Commission, the Bankers Association for Finance and Trade (BAFT), or the Institute of International Banking Law & Practice, whether or not
any Letter of Credit chooses such Laws or practice rules.
2.9.2 Letter of Credit Fees. The Borrowers shall pay (i) to the Administrative Agent for the ratable account of the Lenders a fee (the “Letter of Credit Fee”) equal
to the Applicable Letter of Credit Fee Rate on the daily amount available to be drawn under each Letter of Credit, and (ii) to the Issuing Lender for its own account a fronting fee equal to 0.125% per annum on the daily amount available to be
drawn under each Letter of Credit. All Letter of Credit Fees and fronting fees shall be computed on the basis of a year of 360 days and actual days elapsed and shall be payable quarterly in arrears on each Payment Date following issuance of each
Letter of Credit. The Borrowers shall also pay to the Issuing Lender for the Issuing Lender’s sole account the Issuing Lender’s then in effect customary fees and administrative expenses payable with respect to the Letters of Credit as the
Issuing Lender may generally charge or incur from time to time in connection with the issuance, maintenance, amendment (if any), assignment or transfer (if any), negotiation, and administration of Letters
of Credit.
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2.9.3 Disbursements, Reimbursement. Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Lender a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender’s Ratable Share of the maximum amount
available to be drawn under such Letter of Credit and the amount of such drawing, respectively.
2.9.3.1 In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the Issuing Lender will promptly notify the
Borrowers and the Administrative Agent thereof. Provided that it shall have received such notice, the Borrowers shall reimburse (such obligation to reimburse the Issuing Lender shall sometimes be referred to as a “Reimbursement Obligation”) the Issuing Lender prior to 12:00 noon on each date that an amount is paid by the Issuing Lender under any Letter of Credit (each such date, a “Drawing Date”) by
paying to the Administrative Agent for the account of the Issuing Lender an amount equal to the amount so paid by the Issuing Lender. In the event the Borrowers fail to reimburse the Issuing Lender (through the Administrative Agent) for the full
amount of any drawing under any Letter of Credit by 12:00 noon on the Drawing Date, the Administrative Agent will promptly notify each Lender thereof, and the Borrowers shall be deemed to have requested that Revolving Credit Loans be made by the
Lenders under the Base Rate Option to be disbursed on the Drawing Date under such Letter of Credit, subject to the amount of the unutilized portion of the Revolving Credit Commitment and subject to the conditions set forth in Section 7.2 [Each
Loan or Letter of Credit] other than any notice requirements. Any notice given by the Administrative Agent or Issuing Lender pursuant to this Section 2.9.3.1 may be oral if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
2.9.3.2 Each Lender shall upon any notice pursuant to Section 2.9.3.1 make available to the Administrative Agent for the account of the Issuing Lender an amount in
immediately available funds equal to its Ratable Share of the amount of the drawing, whereupon the participating Lenders shall (subject to Section 2.9.3 [Disbursements; Reimbursement]) each be deemed to have (i) made a Revolving Credit Loan under
the Base Rate Option to the Borrowers in that amount, or (ii) during the continuance of an Insolvency Proceeding or Relief Proceeding with respect to any Borrower, funded its Ratable Share of the Reimbursement Obligations arising by reason of
such drawing. If any Lender so notified fails to make available to the Administrative Agent for the account of the Issuing Lender the amount of such Lender's Ratable Share of such amount by no later than 2:00 p.m. on the Drawing Date, then
interest shall accrue on such Lender's obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Effective Federal Funds Rate during the first three (3) days
following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to Revolving Credit Loans under the Base Rate Option on and after the fourth day following the Drawing Date. The Administrative Agent and the Issuing Lender
will promptly give notice (as described in Section 2.9.3.1 above) of the occurrence of the Drawing Date, but failure of the Administrative Agent or the Issuing Lender to give any such notice on the Drawing Date or in sufficient time to enable any
Lender to effect such payment on such date shall not relieve such Lender from its obligation under this Section 2.9.3.2.
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2.9.3.3 With respect to any unreimbursed drawing that is not converted into Revolving Credit Loans under the Base Rate Option to the Borrowers in whole or in part as contemplated by Section
2.9.3.1, because of the Borrowers' failure to satisfy the conditions set forth in Section 7.2 [Each Loan or Letter of Credit] other than any notice requirements, or for any other reason, the Borrowers shall be deemed to have incurred from the
Issuing Lender a borrowing (each a “Letter of Credit Borrowing”) in the amount of such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear
interest at the rate per annum applicable to the Revolving Credit Loans under the Base Rate Option. Each Lender's payment to the Administrative Agent for the account of the Issuing Lender pursuant to Section 2.9.3 [Disbursements, Reimbursement]
shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing (each a “Participation Advance”) from such Lender in satisfaction of its participation obligation under
this Section 2.9.3.
2.9.4.1 Upon (and only upon) receipt by the Administrative Agent for the account of the Issuing Lender of immediately available funds from the Borrowers (i) in reimbursement of any payment made
by the Issuing Lender under the Letter of Credit with respect to which any Lender has made a Participation Advance to the Administrative Agent, or (ii) in payment of interest on such a payment made by the Issuing Lender under such a Letter of
Credit, the Administrative Agent on behalf of the Issuing Lender will pay to each Lender, in the same funds as those received by the Administrative Agent, the amount of such Lender’s Ratable Share of such funds, except the Administrative Agent
shall retain for the account of the Issuing Lender the amount of the Ratable Share of such funds of any Lender that did not make a Participation Advance in respect of such payment by the Issuing Lender.
2.9.4.2 If the Administrative Agent is required at any time to return to any Loan Party, or to a trustee, receiver, liquidator, custodian, or any official in any Insolvency Proceeding, any
portion of any payment made by any Loan Party to the Administrative Agent for the account of the Issuing Lender pursuant to this Section in reimbursement of a payment made under any Letter of Credit or interest or fees thereon, each Lender shall,
on demand of the Administrative Agent, forthwith return to the Administrative Agent for the account of the Issuing Lender the amount of its Ratable Share of any amounts so returned by the Administrative Agent plus interest thereon from the date
such demand is made to the date such amounts are returned by such Lender to the Administrative Agent, at a rate per annum equal to the Effective Federal Funds Rate in effect from time to time.
2.9.5 Documentation. Each Loan Party agrees to be bound by the terms of the Issuing Lender’s application and agreement for
letters of credit and the Issuing Lender’s written regulations and customary practices relating to letters of credit, though such interpretation may be different from such Loan Party’s own. In the event of a conflict between such application or
agreement and this Agreement, this Agreement shall govern. It is understood and agreed that, except in the case of gross negligence or willful misconduct, the Issuing Lender shall not be liable for any error, negligence and/or mistakes, whether
of omission or commission, in following any Loan Party’s instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.
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2.9.6 Determinations to Honor Drawing Requests. In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary
thereof, the Issuing Lender shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such
Letter of Credit.
2.9.7 Nature of Participation and Reimbursement Obligations. Each Lender’s obligation in accordance with this Agreement to
make the Revolving Credit Loans or Participation Advances, as contemplated by Section 2.9.3 [Disbursements, Reimbursement], as a result of a drawing under a Letter of Credit, and the Obligations of the Borrowers to reimburse the Issuing Lender
upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.9 under all circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Issuing Lender or any of its Affiliates, the Borrowers or any other Person for
any reason whatsoever, or which any Loan Party may have against the Issuing Lender or any of its Affiliates, any Lender or any other Person for any reason whatsoever;
(ii) the failure of any Loan Party or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in Sections 2.1 [Revolving Credit
Commitments], 2.5 [Revolving Credit Loan Requests; Swing Loan Requests], 2.6 [Making Revolving Credit Loans and Swing Loans; Etc.] or 7.2 [Each Loan or Letter of Credit] or as otherwise set forth in this Agreement for the making of a Revolving
Credit Loan, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Advances under Section 2.9.3 [Disbursements, Reimbursement];
(iii) any lack of validity or enforceability of any Letter of Credit;
(iv) any claim of breach of warranty that might be made by any Loan Party or any Lender against any beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment,
counterclaim, crossclaim, defense or other right which any Loan Party or any Lender may have at any time against a beneficiary, successor beneficiary any transferee or assignee of any Letter of Credit or the proceeds thereof (or any Persons for
whom any such transferee may be acting), the Issuing Lender or its Affiliates or any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any
underlying transaction between any Loan Party and the beneficiary for which any Letter of Credit was procured);
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(v) the lack of power or authority of any signer of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy,
enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of
any property or provision of services relating to a Letter of Credit, in each case even if the Issuing Lender or any of its Affiliates has been notified thereof;
(vi) payment by the Issuing Lender or any of its Affiliates under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with
the terms of such Letter of Credit;
(vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of
Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;
(viii) any failure by the Issuing Lender or any of its Affiliates to issue any Letter of Credit in the form requested by any Loan Party, unless the Issuing Lender has received written
notice from such Loan Party of such failure within three Business Days after the Issuing Lender shall have furnished such Loan Party and the Administrative Agent a copy of such Letter of Credit and such error is material and no drawing has been
made thereon prior to receipt of such notice;
(ix) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of any Loan Party;
(x) any breach of this Agreement or any other Loan Document by any party thereto;
(xi) the occurrence or continuance of an Insolvency Proceeding with respect to any Loan Party;
(xii) the fact that an Event of Default or a Potential Default shall have occurred and be continuing;
(xiii) the fact that the Expiration Date shall have passed or this Agreement or the Commitments hereunder shall have been terminated; and
(xiv) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
2.9.8 Indemnity. The Borrowers hereby agree to protect, indemnify, pay and save harmless the Issuing Lender and any of its
Affiliates that has issued a Letter of Credit from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of
counsel and allocated costs of internal counsel) which the Issuing Lender or any of its Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (a) the gross
negligence or willful misconduct of the Issuing Lender as determined by a final non-appealable judgment of a court of competent jurisdiction or (b) the wrongful dishonor by Issuing Lender or any of its Affiliates of a proper demand for payment
made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future Official Body.
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2.9.9 Liability for Acts and Omissions. As between any Loan Party and the Issuing Lender, or the Issuing Lender’s Affiliates,
such Loan Party assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender shall not be
responsible for any of the following, including any losses or damages to any Loan Party or other Person or property relating therefrom: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any
party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if the Issuing Lender or its
Affiliates shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any
conditions required in order to draw upon such Letter of Credit or any other claim of any Loan Party against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Loan Party and any beneficiary of
any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary
of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Issuing Lender or its Affiliates, as applicable, including any act or omission of
any Official Body, and none of the above shall affect or impair, or prevent the vesting of, any of the Issuing Lender’s or its Affiliates rights or powers hereunder. Nothing in the preceding sentence shall relieve the Issuing Lender from
liability for the Issuing Lender’s gross negligence or willful misconduct in connection with actions or omissions described in such clauses (i) through (viii) of such sentence. Notwithstanding the foregoing, in no event shall the Issuing Lender
or its Affiliates be liable to any Loan Party for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including attorneys' fees), or for any damages resulting from any change in the value of any property
relating to a Letter of Credit.
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Without limiting the generality of the foregoing, the Issuing Lender and each of its Affiliates (i) may rely on any oral or other communication believed in good faith by the Issuing Lender or
such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit, (ii) may honor any presentation if the documents presented appear on their face substantially to comply with the terms and conditions of the
relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be
entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by the Issuing Lender or its Affiliate; (iv) may honor any drawing that is payable upon presentation of a statement
advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to
arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the Laws or practices of the place where such bank is located; and (vi) may settle or adjust
any claim or demand made on the Issuing Lender or its Affiliate in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “Order”) and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit
fail to conform in any way with such Letter of Credit.
In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by the Issuing Lender or its Affiliates under or in connection with the
Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith and without gross negligence (as determined by a court of competent jurisdiction in a final non-appealable judgment), shall
not put the Issuing Lender or its Affiliates under any resulting liability to the Borrowers or any Lender.
2.9.10 Issuing Lender Reporting Requirements. Each Issuing Lender shall, on the first Business Day of each month, provide to
Administrative Agent and Borrowers a schedule of the Letters of Credit issued by it, in form and substance satisfactory to Administrative Agent, showing the date of issuance of each Letter of Credit, the account party, the original face amount
(if any), and the expiration date of any Letter of Credit outstanding at any time during the preceding month, and any other information relating to such Letter of Credit that the Administrative Agent may request.
2.10.1 Defaulting Lender Adjustments. Notwithstanding any provision
of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then, until such time as such 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
specified in the definition of Required Lenders.
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(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether
voluntary or mandatory, at maturity, pursuant to Section 9 [Default] or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.2.3 [Set-off] shall be applied at such time or times as may be determined by
the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the
payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Lender or Swing Loan Lender hereunder; third, to Cash Collateralize the Issuing Lender’s Fronting Exposure with
respect to such Defaulting Lender in accordance with Section 5.12 [Cash Collateral]; fourth, as the Borrower may request (so long as no Potential Default or Event of Default exists), to the funding of any
Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the
Administrative Agent and the Borrowers, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash
Collateralize the Issuing Lender’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 5.12 [Cash Collateral]; sixth, to the payment of any amounts owing to the Lenders, the Issuing Lender or Swing Loan Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Lender or Swing Loan Lender
against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Potential Default or Event of Default exists, to the payment
of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the 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 (x) such payment is a payment of the principal amount of any Loans
or Letter of Credit Borrowing in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions specified in Section 7.2
[Each Loan or Letter of Credit] were satisfied or waived, such payment shall be applied solely to pay the Loans of, and Letter of Credit Borrowings owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of
any Loans of, or Letter of Credit Borrowing owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in Letter of Credit Obligations and Swing Loans are held by the Lenders pro rata in accordance with
the Commitments without giving effect to Section 2.10.1(iv) [Reallocation of Participations to Reduce Fronting Exposure]. 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 2.10.1(ii) [Defaulting Lender Waterfall] 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 Lender is a Defaulting Lender (and the Borrowers shall not be required to pay
any such fee that otherwise would have been required to have been paid to that Defaulting Lender).
(b) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Ratable
Share of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 5.12 [Cash Collateral].
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(c) With respect to any Commitment Fee or Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall (x) 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 Letter of Credit Obligations or Swing Loans that has been reallocated to such Non-Defaulting
Lender pursuant to clause (iv) below, (y) pay to each Issuing Lender and Swing Loan Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Lender’s or Swing Loan
Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.
(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in Letter of Credit Obligations and Swing Loans shall be
reallocated among the Non-Defaulting Lenders in accordance with their respective Ratable Shares (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate
Revolving Facility Usage of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit Commitment. Subject to Section 11.15 [Acknowledgement and Consent to Bail-In of Affected Financial Institutions], 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.
(v) Cash Collateral, Repayment of Swing Loans. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall within one
Business Day following notice by the Administrative Agent, without prejudice to any right or remedy available to it hereunder or under Law, (x) first, prepay Swing Loans in an amount equal to the Swing Loan Lender’s Fronting Exposure, and
(y) second, Cash Collateralize the Issuing Lender’s Fronting Exposure in accordance with the procedures specified in Section 5.12 [Cash Collateral].
2.10.2 Defaulting Lender Cure. If the Borrowers, the
Administrative Agent and each Swing Loan Lender and Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such
notice and subject to any conditions specified therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or
take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Loans to be held pro rata by the Lenders in accordance with the Commitments
(without giving effect to Section 2.10.1(iv) [Reallocation of Participations to Reduce Fronting Exposure], whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender
to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
2.10.3 New Swing Loans/Letters of Credit. So long as any Lender is
a Defaulting Lender, (i) the Swing Loan Lender shall not be required to fund any Swing Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swing Loan, and (ii) no Issuing Lender shall be required to
issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.
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2.11 Increase in Commitments and Added Term Loans.
(i) Increasing Lenders and New Lenders. The Borrowers may, at any time following the Closing Date, request that (1) the
current Lenders increase their Revolving Credit Commitments, (2) one or more new lenders (each a “New Lender”) join this Agreement and provide a Revolving Credit Commitment hereunder, or (3) the current
Lenders and/or one or more New Lenders join this Agreement and provide one or more tranches of term loans (the “Added Term Loans”), subject to the following terms and conditions (any current Lender which
elects to increase its Revolving Credit Commitment or provide an Added Term Loan, as applicable, shall be referred to as an “Increasing Lender”):
(a) No Obligation to Increase. No current Lender shall be obligated to (x) increase its Revolving Credit Commitment and any increase in the Revolving Credit Commitment by any
current Lender shall be in the sole discretion of such current Lender, or (y) provide Added Term Loans and any Added Term Loans provided by any current Lender shall be in the sole discretion of such current Lender.
(b) Defaults. There shall exist no Events of
Default or Potential Default on the effective date of such increase after giving effect to such increase.
(c) Maximum Amount of Increases and Aggregate Credit Commitments. The Borrowers may request separate increases of the Revolving Credit
Commitments or incurrences of Added Term Loans issued pursuant to this Section (the “New Tranche of Term Loan Commitments”), so long as after giving effect to such increase or incurrences, the sum of the
total aggregate increase to the Revolving Credit Commitments plus the total aggregate of New Tranche of Term Loan Commitments does not exceed $50,000,000, with the total aggregate of all Commitments hereunder (including New Tranche of Term Loan
Commitments) not to exceed $100,000,000.
(d) Minimum Revolving Credit Commitments. After giving effect to such increase, the amount of the Revolving Credit Commitments provided
by each of the New Lenders and each of the Increasing Lenders shall be at least $10,000,000.
(e) Terms of Added Term Loans. (i) the Added Term Loans (x) shall rank pari passu in right of payment with
the Revolving Credit Loans under this Agreement, (y) shall not mature earlier than the Expiration Date, and (z) shall have an amortization schedule and interest rates (including through fixed interest rates), interest margins, rate floors,
upfront fees, funding discounts, original issue discounts and prepayment premiums as determined by the Borrowers, the Administrative Agent and the lenders providing the Added Term Loans; and (ii) each New Tranche of Term Loan Commitments shall
be in the minimum amount of $10,000,000.00.
(ii) Requirements for Increase in Commitments and Added Term Loans.
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(a) Resolutions; Opinion. The Loan Parties shall deliver to the Administrative Agent on or before the effective date of such increase
the following documents in a form reasonably acceptable to the Administrative Agent: (1) certifications of their corporate secretaries with attached resolutions certifying that the increase in the Revolving Credit Commitment or incurrence of
Added Term Loans has been approved by such Loan Parties, and (2) an opinion of counsel addressed to the Administrative Agent and the Lenders addressing the authorization and execution of the new Loan Documents by, and enforceability of the new
Loan Documents against, the Loan Parties.
(b) Notes. The Borrowers shall (if requested by a Lender) execute and deliver (1) to each Increasing Lender a replacement revolving
credit Note or term note reflecting the new amount of such Increasing Lender's Revolving Credit Commitment or New Tranche of Term Loan Commitment, as applicable, after giving effect to the increase (and the prior Note issued to such Increasing
Lender shall be deemed to be terminated) and (2) to each New Lender a revolving credit Note or term note reflecting the amount of such New Lender's Revolving Credit Commitment or New Tranche of Term Loan Commitment.
(c) Approval of New Lenders. Any New Lender shall be subject to the approval of the Administrative Agent, such approval not to be
unreasonably withheld, conditioned or delayed.
(d) Increasing Lenders. Each Increasing Lender shall confirm its agreement to increase its Revolving Credit Commitment or provide a New
Tranche of Term Loan Commitment pursuant to an acknowledgement in a form acceptable to the Administrative Agent, signed by it and the Borrowers and delivered to the Administrative Agent at least five (5) days before the effective date of such
increase.
(e) New Lenders--Joinder. Each New Lender shall execute a lender joinder in substantially the form of Exhibit 2.11 pursuant to which such New Lender shall join and
become a party to this Agreement and the other Loan Documents with a Revolving Credit Commitment or New Tranche of Term Loan Commitment in the amount set forth in such lender joinder.
(f) Amendment. Added Term Loans shall be effected by an amendment to this Agreement setting forth the terms of the Added Term Loans executed by (x) the Administrative Agent,
(y) each Lender or New Lender agreeing to provide any portion of such Added Term Loan, and (z) the Loan Parties, as reaffirmations of the Loan Documents executed by the Loan Parties, in each case in form and substance reasonably satisfactory to
the Administrative Agent. Such amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative
Agent and the Borrowers, to effect the provisions of this Section 2.11.
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(a) Repayment of Outstanding Loans; Borrowing of New Loans. On the on the effective date of such increase, the Borrowers shall repay all Loans then outstanding, subject to the
Borrowers' indemnity obligations under Section 5.10 [Indemnity]; provided that it may borrow new Loans with a Borrowing Date on such date. Each of the Lenders shall participate in any new Loans made on or after such date in accordance
with their respective Ratable Shares after giving effect to the increase in Revolving Credit Commitments contemplated by this Section 2.11.
(b) Outstanding Letters of Credit. Repayment of Outstanding Loans; Borrowing of New Loans. On the effective date of such increase, each Increasing Lender and each New Lender
(i) will be deemed to have purchased a participation in each then outstanding Letter of Credit equal to its Ratable Share of such Letter of Credit and the participation of each other Lender in such Letter of Credit shall be adjusted accordingly
and (ii) will acquire, (and will pay to the Administrative Agent, for the account of each Lender, in immediately available funds, an amount equal to) its Ratable Share of all outstanding Participation Advances.
2.12 Springing Borrowing Base. Notwithstanding anything to the contrary set forth in this Section 2, commencing upon and during the continuance of a
Springing Borrowing Base Trigger Event, the Revolving Facility Usage shall not exceed the Borrowing Base.
4.1 Interest Rate Options. The Borrowers shall pay interest in respect of the outstanding
unpaid principal amount of the Loans as selected by it from the Base Rate Option or Term SOFR Rate Option set forth below applicable to the Loans, it being understood that, subject to the provisions of this Agreement, the Borrowers may select
different Interest Rate Options and different Interest Periods to apply simultaneously to the Loans comprising different Borrowing Tranches and may convert to or renew one or more Interest Rate Options with respect to all or any portion of the
Loans comprising any Borrowing Tranche; provided that there shall not be at any one time outstanding more than eight (8) Borrowing Tranches in the aggregate among all of the Loans and provided further that if an Event of Default
or Potential Default exists and is continuing, the Borrowers may not request, convert to, or renew the Term SOFR Rate Option for any Loans and the Required Lenders may demand that all existing Borrowing Tranches bearing interest under the Term
SOFR Rate Option shall be converted immediately to the Base Rate Option, subject to the obligation of the Borrowers to pay any indemnity under Section 5.10 [Indemnity] in connection with such conversion. If at any time the designated rate
applicable to any Loan made by any Lender exceeds such Lender’s highest lawful rate, the rate of interest on such Lender’s Loan shall be limited to such Lender’s highest lawful rate.
4.1.1 Revolving Credit Interest Rate Options; Swing Line Interest Rate. The Borrowers shall have the right to select from
the following Interest Rate Options applicable to the Revolving Credit Loans:
(i) Revolving Credit Base Rate Option: A fluctuating rate per annum (computed on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed) equal to the Base Rate plus the Applicable Margin, such interest rate to change automatically from time to time effective as of the effective date of each change in the Base Rate; or
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(ii) Revolving Credit Term SOFR Rate Option: A rate per annum (computed on the basis of a year of 360 days and actual days elapsed) equal to the Term SOFR Rate as determined for
each applicable Interest Period plus the Applicable Margin.
Subject to Section 4.3 [Interest After Default] and except for Swing Loans made in accordance with the provisions of Cash Management Agreements, only the Base Rate Option applicable to Revolving Credit Loans shall
apply to the Swing Loans.
4.1.2 Rate Quotations. The Borrowers may contact the Administrative Agent on or before the date on which a Loan Request is
to be delivered to receive an indication of the rates then in effect, but it is acknowledged that such projection shall not be binding on the Administrative Agent or the Lenders nor affect the rate of interest which thereafter is actually in
effect when the election is made.
4.2 Interest
Periods. At any time when the Borrowers shall select, convert to or renew a Term SOFR Rate Option, the Borrowers shall notify the Administrative Agent thereof at least three (3) Business Days prior to the effective date of such Term SOFR
Rate Option by delivering a Loan Request. The notice shall specify an Interest Period during which such Interest Rate Option shall apply. Notwithstanding the preceding sentence, the following provisions shall apply to any selection of, renewal
of, or conversion to a Term SOFR Rate Option:
4.2.1 Amount of Borrowing Tranche. Each Borrowing Tranche of Loans under the Term SOFR Rate Option shall be in integral
multiples of, and not less than, the respective amounts set forth in Section 2.5.1 [Revolving Credit Loan Requests]; and
4.2.2 Renewals. In the case of the renewal of a Term SOFR Rate Option at the end of an Interest Period, the first day of
the new Interest Period shall be the last day of the preceding Interest Period, without duplication in payment of interest for such day.
4.3 Interest After Default. To the
extent permitted by Law, upon the occurrence of an Event of Default and until such time such Event of Default shall have been cured or waived, at the discretion of the Administrative Agent or upon written demand by the Required Lenders to the
Administrative Agent:
4.3.1 Letter of Credit Fees, Interest Rate. The Letter of Credit Fees and the rate of interest for each Loan otherwise
applicable pursuant to Section 2.9.2 [Letter of Credit Fees] or Section 4.1 [Interest Rate Options], respectively, shall be increased by 2.0% per annum;
4.3.2 Other Obligations. Each other Obligation hereunder if not paid when due shall bear interest at a rate per annum equal
to the sum of the rate of interest applicable to Revolving Credit Loans under the Base Rate Option plus an additional 2.0% per annum from the time such Obligation becomes due and payable and until it is Paid In Full; and
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4.3.3 Acknowledgment. The Borrowers acknowledge that the increase in rates referred to in this Section 4.3 reflects, among other things, the fact that
such Loans or other amounts have become a substantially greater risk given their default status and that the Lenders are entitled to additional compensation for such risk; and all such interest shall be payable by Borrowers upon demand by
Administrative Agent.
(i) the Administrative Agent shall have determined (which determination shall be conclusive and binding absent manifest error) that the Term SOFR Rate cannot be determined pursuant to
the definition thereof; or
(ii) any Lender determines that for any reason in connection with any request for a Term SOFR Rate Loan or a conversion thereto or a continuation thereof that the Term SOFR Rate for any
requested Interest Period with respect to a proposed Term SOFR Rate Loan does not adequately and fairly reflect the cost to such Lender of funding, establishing or maintaining such Loan during the applicable Interest Period, and such Lender has
provided notice of such determination to the Administrative Agent,
then the Administrative Agent shall have the rights specified in Section 4.4.3 [Administrative Agent’s and Lender’s Rights].
4.4.2 Illegality. If at any time any Lender shall have
determined, or any Official Body shall have asserted, that the making, maintenance or funding of any Term SOFR Rate Loan, or the determination or charging of interest rates based on the Term SOFR Rate, has been made impracticable or unlawful by
compliance by such Lender in good faith with any Law or any interpretation or application thereof by any Official Body or with any request or directive of any such Official Body (whether or not having the force of Law), then the Administrative
Agent shall have the rights specified in Section 4.4.3 [Administrative Agent’s and Lender’s Rights].
4.4.3 Administrative
Agent's and Lender's Rights. In the case of any event specified in Section 4.4.1 [Unascertainable; Increased Costs] above, the Administrative Agent shall promptly so notify the Lenders and the Borrowers thereof, and in the case of an event
specified in Section 4.4.2 [Illegality] above, such Lender shall promptly so notify the Administrative Agent and endorse a certificate to such notice as to the specific circumstances of such notice, and the Administrative Agent shall promptly
send copies of such notice and certificate to the other Lenders and the Borrowers. Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of (A) the Lenders, in the
case of such notice given by the Administrative Agent, or (B) such Lender, in the case of such notice given by such Lender, to allow the Borrowers to select, convert to, renew or continue a Term SOFR Rate Loan shall be suspended (to the extent of
the affected Term SOFR rate Loan or Interest Periods) until the Administrative Agent shall have later notified the Borrowers, or such Lender shall have later notified the Administrative Agent, of the Administrative Agent’s or such Lender’s, as
the case may be, determination that the circumstances giving rise to such previous determination no longer exist. Upon a determination by Administrative Agent under Section 4.4.1 [Unascertainable; Increased Costs], (i) if the Borrowers have
previously notified the Administrative Agent of its selection of, conversion to or renewal of a Term SOFR Rate Option and the Term SOFR Rate Option has not yet gone into effect, such notification shall be deemed to provide for selection of,
conversion to or renewal of a Base Rate Loan, and (ii) any outstanding affected Term SOFR Rate Loans will be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period. If any Lender notifies the
Administrative Agent of a determination under Section 4.4.2 [Illegality], the Borrowers shall, subject to the Borrowers’ indemnification Obligations under Section 5.10 [Indemnity], as to any Loan of the Lender to which a Terms SOFR Rate Option
applies, on the date specified in such notice either convert such Loan to a Base Rate Loan or prepay such Loan in accordance with Section 5.6 [Voluntary Prepayments]. Absent due notice from the Borrowers of conversion or prepayment, such Loan
shall automatically be converted to a Base Rate Loan upon such specified date.
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4.4.4 Benchmark Replacement Setting.
(i) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document (and any agreement executed in connection with an Interest Rate Hedge
shall be deemed not to be a “Loan Document” for purposes of this Section titled “Benchmark Replacement Setting”), if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to any setting of the then-current
Benchmark, then (A) if a Benchmark Replacement is determined in accordance with clause (1) 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 (B) if a
Benchmark Replacement is determined in accordance with clause (2) 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. Eastern 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 Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.
(ii) Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative 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.
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(iii) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrowers and the Lenders of (A) the implementation of any Benchmark
Replacement, and (B) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Administrative Agent will notify the Borrowers of (x) the removal or
reinstatement of any tenor of a Benchmark pursuant to paragraph (iv) below and (y) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable,
any Lender (or group of Lenders) pursuant to this Section, 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.
(iv) 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), (A) if the then-current Benchmark is a term rate or based on a term rate and either (I) 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 Administrative Agent in its reasonable discretion or (II) 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 Administrative 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 (B) if a tenor that was removed pursuant to clause (A) above either (I) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (II) 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 Administrative 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.
(v) Benchmark Unavailability Period. Upon the Borrowers’ receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a given Benchmark, the Borrowers
may revoke any pending request for a Loan bearing interest based on or with reference to such Benchmark or conversion to or continuation of Loans bearing interest based on or with reference to such Benchmark 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 Base Rate Loan or conversion to a Base Rate Loan. 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 the Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the
Base Rate.
(vi) Definitions. As used in this Section:
“Available Tenor” means, as of any date of determination and with respect to the
then-current Benchmark, as applicable, 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 as of such date and
not including, for the avoidance of doubt, any tenor of such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (iv) of this Section.
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“Benchmark” means, initially, SOFR and the Term SOFR Reference Rate; provided that if a Benchmark
Transition Event has occurred with respect to 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 this Section.
“Benchmark Replacement” means, with respect to any Benchmark Transition
Event, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:
(1) Daily Simple SOFR;
(2) the sum of (A) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower, giving due consideration to (x) any selection or
recommendation of a replacement benchmark rate or the mechanism for determining such rate by the Relevant Governmental Body or (y) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the
then-current Benchmark for U.S. dollar-denominated syndicated credit facilities at such time and (B) the related Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as determined pursuant to the foregoing 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; and provided further, that any Benchmark Replacement shall be administratively
feasible as determined by the Administrative Agent in its sole discretion.
“Benchmark Replacement Adjustment” means, 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
Administrative Agent and the Borrower, 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 U.S. dollar-denominated syndicated credit facilities at such time.
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“Benchmark Replacement Date” means a date and time
determined by the Administrative Agent, which date shall be no later than the earliest to occur of the following events with respect to the then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (A) the date of the public statement or publication of information
referenced therein and (B) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide such Benchmark (or such component thereof) or, if such
Benchmark is a term rate or is based on a term rate, all Available Tenors of such Benchmark (or such component thereof); or
(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date determined by the Administrative Agent, which date shall promptly follow the date of
the public statement or publication of information referenced therein.
For the avoidance of doubt, if such Benchmark is a term rate or is based on a term rate, the “Benchmark Replacement Date” will be deemed to have occurred
in the case of clause (1) or (2) 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” means the occurrence of one or more of the following events with respect to the
then-current Benchmark:
(1) 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 such Benchmark (or such component thereof) or, if such Benchmark is a term rate or is based on a term rate, 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);
(2) a public statement or publication of information by an Official Body having jurisdiction over the Administrative Agent, the regulatory supervisor for the administrator of
such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, 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 such Benchmark (or such component thereof) or, if such Benchmark is a term rate or is based on a term rate, 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 such Benchmark (or such component thereof) or, if
such Benchmark is a term rate or is based on a term rate, any Available Tenor of such Benchmark (or such component thereof); or
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(3) 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) or an Official Body having jurisdiction over the Administrative Agent announcing that such Benchmark (or such component thereof) or, if such Benchmark is a term rate or is based on a term rate, 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, if such Benchmark is a term rate or is based on a term rate, 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 Unavailability Period” means the period (if
any) (x) 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 this
Section titled “Benchmark Replacement Setting” and (y) 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 this Section titled
“Benchmark Replacement Setting.”
“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this
Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Term SOFR Rate or, if no floor is specified, zero.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System and/or the Federal Reserve
Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York, or any successor thereto.
“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark
Replacement Adjustment.
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4.5 Selection of Interest Rate Options. If the Borrowers fail to select a new Interest Period to apply to any Borrowing Tranche of Loans under the Term SOFR Rate Option at the
expiration of an existing Interest Period applicable to such Borrowing Tranche in accordance with the provisions of Section 4.2 [Interest Periods], the Borrowers shall be deemed to have converted such Borrowing Tranche to the Base Rate Option
applicable to Revolving Credit Loans, commencing upon the last day of the existing Interest Period. If the Borrowers provide any Loan Request related to a Loan at the Term SOFR Rate Option but fail to identify an Interest Period therefor, such
Loan Request shall be deemed to request an Interest Period of one (1) Month. Any Loan Request that fails to select an Interest Rate Option shall be deemed to be a request for the Base Rate Option.
5.1 Payments. All payments and prepayments to be made in respect of principal, interest, Commitment Fees, Letter of
Credit Fees, Administrative Agent's Fee or other fees or amounts due from the Borrowers hereunder shall be payable prior to 12:00 noon on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Borrowers, and without set-off, counterclaim or other deduction of any nature, and an action therefor shall immediately accrue. Such payments shall be made to the Administrative Agent at the Principal Office for the
account of the Swing Loan Lender with respect to the Swing Loans and for the ratable accounts of the Lenders with respect to the Revolving Credit Loans in U.S. Dollars and in immediately available funds, and the Administrative Agent shall
promptly distribute such amounts to the Lenders in immediately available funds; provided that in the event payments are received by 12:00 noon by the Administrative Agent with respect to the Loans and such payments are not distributed to
the Lenders on the same day received by the Administrative Agent, the Administrative Agent shall pay the Lenders interest at the Effective Federal Funds Rate with respect to the amount of such payments for each day held by the Administrative
Agent and not distributed to the Lenders. The Administrative Agent’s statement of account, ledger or other relevant record shall, in the absence of manifest error, be conclusive as the statement of the amount of principal of and interest on the
Loans and other amounts owing under this Agreement.
5.2 Pro Rata Treatment of Lenders. Each borrowing of Revolving Credit Loans shall be
allocated to each Lender according to its Ratable Share, and each selection of, conversion to or renewal of any Interest Rate Option and each payment or prepayment by the Borrowers with respect to principal, interest, Commitment Fees and Letter
of Credit Fees (but excluding the Administrative Agent’s Fee and the Issuing Lender’s fronting fee) shall (except as otherwise may be provided with respect to a Defaulting Lender and except as provided in Sections 4.4.3 [Administrative Agent’s
and Lender’s Rights] in the case of an event specified in Section 4.4 [Rate Unascertainable; Etc.], 5.13 [Replacement of a Lender] or 5.8 [Increased Costs]) be payable ratably among the Lenders entitled to such payment in accordance with the
amount of principal, interest, Commitment Fees and Letter of Credit Fees, as set forth in this Agreement. Notwithstanding any of the foregoing, each borrowing or payment or prepayment by the Borrowers of principal, interest, fees or other
amounts from the Borrowers with respect to Swing Loans shall be made by or to the Swing Loan Lender according to Section 2.6.5 [Borrowings to Repay Swing Loans].
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5.3 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff, counterclaim or banker’s lien or any other right, by receipt of voluntary payment, by realization upon
security, or by any other non-pro rata source, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of
its Loans and accrued interest thereon or other such obligations greater than the pro-rata share of the amount such Lender is entitled thereto, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such
fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:
(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored
to the extent of such recovery, together with interest or other amounts, if any, required by Law (including court order) to be paid by the Lender or the holder making such purchase; and
(ii) the provisions of this Section 5.3 shall not be construed to apply to (x) any payment made by the Loan Parties pursuant to and in accordance with the express terms of the Loan
Documents (including the application of funds arising from the existence of a Defaulting Lender) or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or Participation
Advances to any assignee or participant. Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against each Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Loan Party in the amount of such participation.
5.4.1 Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice
from a Lender (x) in the case of Loans to which the Base Rate Option applies, prior to 12:00 noon Eastern Time on the proposed Borrowing Date of such Borrowing Tranche of Loans and (y) otherwise, prior to the proposed date of any Borrowing
Tranche of Loans that such Lender will not make available to the Administrative Agent such Lender’s Ratable Share, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.5.1
[Making Revolving Credit Loans] and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing Tranche of Loans available to
the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is
made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Effective Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by the Borrowers, the interest rate applicable to Loans under the Base Rate Option. If the Borrowers and such
Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrowers the amount of such interest paid by the Borrower for such period. If such Lender
pays its share of the applicable Borrowing Tranche of Loans to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing Tranche of Loans. Any payment by the Borrowers shall be without
prejudice to any claim the Borrowers may have against a Lender that shall have failed to make such payment to the Administrative Agent.
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5.4.2 Payments by Borrowers; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrowers prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders or the Issuing Lender hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lender, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or
the Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the Issuing Lender, with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Effective Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
5.5 Interest Payment Dates. Interest on Loans to which the Base Rate Option applies shall be due and payable in arrears
on each Payment Date. Interest on Loans to which the Term SOFR Rate Option applies shall be due and payable on the last day of each Interest Period and, if such Interest Period is longer than three (3) Months, also at the end of each three Month
period during such Interest Period. Interest on the principal amount of each Loan or other monetary Obligation shall be due and payable on demand after such principal amount or other monetary Obligation becomes due and payable (whether on the
stated Expiration Date, upon acceleration or otherwise). Interest shall be computed to, but excluding, the date payment is due.
5.6 Voluntary Prepayments. The Borrowers
shall have the right at their option from time to time to prepay the Loans in whole or part without premium or penalty (except as provided in Section 5.13 [Replacement of a Lender] below, in Section 5.8 [Increased Costs] and Section 5.10
[Indemnity]). Subject to the provisions of any Cash Management Agreement, whenever the Borrowers desire to prepay any part of the Loans, it shall provide a prepayment notice to the Administrative Agent by 1:00 p.m. at least one (1) Business Day
prior to the date of prepayment of the Revolving Credit Loans that bear interest at the Base Rate Option and at least three (3) Business Days prior to the date of prepayment of the Revolving Credit Loans that bear interest at the Term SOFR Rate
Option, or no later than 1:00 p.m. on the date of prepayment of Swing Loans, setting forth the following information:
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(i) the date, which shall be a Business Day, on which the proposed prepayment is to be made;
(ii) a statement indicating the application of the prepayment between the Revolving Credit Loans and Swing Loans;
(iii) a statement indicating the application of the prepayment between Loans to which the Base Rate Option applies and Loans to which the Term SOFR Rate Option applies;
and
(iv) the total principal amount of such prepayment, which shall not be less than the lesser of (i) the Revolving Facility Usage or (ii) $100,000 for any Swing Loan or
$1,000,000 for any Revolving Credit Loan.
All prepayment notices shall be irrevocable. The principal amount of the Loans for which a prepayment notice is given, together with interest on such principal amount, except with respect to
Loans to which the Base Rate Option applies, shall be due and payable on the date specified in such prepayment notice as the date on which the proposed prepayment is to be made. Except as provided in Section 4.4.3 [Administrative Agent’s and
Lender’s Rights], if the Borrowers prepay a Loan but fails to specify the applicable Borrowing Tranche which the Borrowers is prepaying, the prepayment shall be applied first to Loans to which the Base Rate Option applies, then to Loans to which
the Term SOFR Rate Option applies. Any prepayment hereunder shall be subject to the Borrowers' Obligation to indemnify the Lenders under Section 5.10 [Indemnity].
5.7 Mandatory Prepayments. Upon the occurrence and during the continuance of a Springing Borrowing Base Trigger Event, whenever the outstanding principal balance of Revolving Credit Loans by the Lenders plus the
aggregate undrawn face amount of outstanding Letters of Credit issued pursuant to Section 2.9 [Letter of Credit Subfacility] exceed the Borrowing Base, the Borrowers shall make, within one (1) Business Day after the Borrowers learn of such excess
and whether or not the Administrative Agent has given notice to such effect, a mandatory prepayment of principal equal to the excess of the outstanding principal balance of the Revolving Credit Loans over the Borrowing Base, together with accrued
interest on such principal amount.
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or
credit extended or participated in by, any Lender or the Issuing Lender;
(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (C) Connection Income
Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
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(iii) impose on any Lender, any Issuing Lender or the relevant market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any
Letter of Credit or participation therein; and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation
to make any such Loan, or to increase the cost to such Lender, the Issuing Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter
of Credit), or to reduce the amount of any sum received or receivable by such Lender, the Issuing Lender or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, the Issuing Lender or
other Recipient, the Borrowers will pay to such Lender, the Issuing Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender or other Recipient, as the case may be, for
such additional costs incurred or reduction suffered; provided that upon the occurrence of any Change in Law imposing a reserve percentage on any interest rate based on SOFR, the Administrative Agent, in its reasonable discretion, may modify the
calculation of each such SOFR-based interest rate to add (or otherwise account for) such reserve percentage.
5.8.2 Capital Requirements. If any Lender or the Issuing Lender determines that any Change in
Law affecting such Lender or the Issuing Lender or any Lending Office of such Lender or such Lender’s or the Issuing Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate
of return on such Lender’s or the Issuing Lender’s capital or on the capital of such Lender’s or the Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit or Swing Loans held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company
could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or the Issuing Lender’s holding company with respect to capital adequacy), then from time
to time the Borrowers will pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company for any such
reduction suffered.
5.8.3 Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing of New Loans. A certificate of a Lender or
the Issuing Lender setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or the Issuing Lender or its holding company, as the case may be, as specified in Sections 5.8.1 [Increased Costs Generally] or 5.8.2
[Capital Requirements] and delivered to the Borrowers shall be conclusive absent manifest error. The Borrowers shall pay such Lender or the Issuing Lender, as the case may be, the amount shown as due on any such certificate within ten (10) days
after receipt thereof.
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5.8.4 Delay in Requests. Failure or delay on the part of any Lender or the Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s or the Issuing Lender’s right to demand such compensation, provided that the Borrowers shall not be required to compensate a Lender or the Issuing Lender pursuant to this Section for any increased
costs incurred or reductions suffered more than six months prior to the date that such Lender or the Issuing Lender, as the case may be, notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such
Lender's or the Issuing Lender's intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six (6) month period referred to above shall be extended to
include the period of retroactive effect thereof).
5.9.1 Issuing Lender. For purposes of this Section 5.9, the term “Lender” includes the Issuing Lender and the term
“applicable Law” includes FATCA.
5.9.2 Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan
Document shall be without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding
of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Official Body in
accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 5.9 [Taxes]) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
5.9.3 Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely pay to the relevant Official Body in
accordance with applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
5.9.4 Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within
ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 5.9 [Taxes]) payable or paid by such Recipient or required
to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Official Body.
A certificate setting forth in reasonable detail the amount of such payment or liability delivered to the Borrowers by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender,
shall be conclusive absent manifest error.
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5.9.5 Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days
after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of
any of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.8.4 [Participations] relating to the maintenance of a Participant Register, and (iii) any Excluded Taxes
attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly
or legally imposed or asserted by the relevant Official Body. A certificate setting forth in reasonable detail the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest
error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source
against any amount due to the Administrative Agent under this Section 5.9.5 [Indemnification by the Lenders].
5.9.6 Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to an Official Body
pursuant to this Section 5.9 [Taxes], such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Official Body evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to the Administrative Agent.
(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the
Borrowers and the Administrative Agent, at the time or times reasonably requested by the Borrowers or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrowers or the Administrative Agent
as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrowers or the Administrative Agent, shall deliver such other documentation prescribed by
applicable Law or reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 5.9.7(ii)(A), (ii)(B) and (ii)(D) below)
shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such
Lender.
(ii) Without limiting the generality of the foregoing, in the event that any Borrower is a U.S. Borrower,
(A) any Lender that is a U.S. Person shall deliver to the Borrowers and the Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding
tax;
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(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrowers and the Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or the Administrative Agent), whichever of the following is
applicable:
(i) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under
any Loan Document, executed originals of IRS Form W-8BEN-E (or W-8BEN if applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "interest" article of such tax treaty and (y) with respect to any
other applicable payments under any Loan Document, IRS Form W-8BEN-E (or W-8BEN if applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax
treaty;
(ii) executed originals of IRS Form W-8ECI;
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially
in the form of Exhibit 5.9.7(A) to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrowers within the meaning of Section 881(c)(3)(B)
of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN-E (or W-8BEN if
applicable); or
(iv) to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN
if applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit 5.9.7(B) or Exhibit 5.9.7(C), IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided
that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the
form of Exhibit 5.9.7(D) on behalf of each such direct and indirect partner;
(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrowers and the Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or the Administrative Agent), executed originals of any other
form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrowers
or the Administrative Agent to determine the withholding or deduction required to be made; and
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(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrowers and the Administrative Agent at the time or times prescribed by Law and at such time
or times reasonably requested by the Borrowers or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by
the Borrowers or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or
to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly
notify the Borrowers and the Administrative Agent in writing of its legal inability to do so.
5.9.8 Treatment of Certain Refunds.
If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 5.9 [Taxes] (including by the payment of additional amounts pursuant
to this Section 5.9 [Taxes]), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 5.9 [Taxes] with respect to the Taxes giving rise to such refund), net of
all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Official Body with respect to such refund). Such indemnifying party, upon the request of such indemnified
party incurred in connection with obtaining such refund, shall repay to such indemnified party the amount paid over pursuant to this Section 5.9.8 [Treatment of Certain Refunds] (plus any penalties, interest or other charges imposed by the
relevant Official Body) in the event that such indemnified party is required to repay such refund to such Official Body. Notwithstanding anything to the contrary in this Section 5.9.8 [Treatment of Certain Refunds]), in no event will the
indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 5.9.8 [Treatment of Certain Refunds] 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 paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
5.9.9 Survival. Each party’s obligations under this Section 5.9 [Taxes] shall survive the resignation of the Administrative
Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all Obligations.
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5.10 Indemnity. In addition to the compensation or payments required by Section 5.8 [Increased Costs] or Section 5.9 [Taxes], the Borrowers shall
indemnify each Lender against all liabilities, losses or expenses (including loss of anticipated profits, any foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain any
Loan, from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract) which such Lender sustains or incurs as a consequence of any:
(i) payment, prepayment, conversion or renewal of any Loan to which a Term SOFR Rate Option applies on a day other than the last day of the corresponding Interest Period (whether or not
any such payment or prepayment is mandatory, voluntary or automatic and whether or not any such payment or prepayment is then due), or
(ii) attempt by the Borrowers to revoke (expressly, by later inconsistent notices or otherwise) in whole or part any Loan Requests under Section 2.5 [Revolving Credit Loan Requests;
Swing Loan Requests] or Section 4.2 [Interest Periods] or notice relating to prepayments under Section 5.6 [Voluntary Prepayments] or failure by the Borrowers (for a reason other than the failure of such Lender to make a Loan) to prepay,
borrower, continue or convert any Loan, other than a Loan under the Base Rate Option, on the date or in the amount notified by the Borrowers; or
(iii) any assignment of a Loan under the Term SOFR Rate Option on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 5.13 [Replacement
of a Lender].
If any Lender sustains or incurs any such loss or expense, it shall from time to time notify the Borrowers of the amount determined in good faith by such Lender (which determination may include
such assumptions, allocations of costs and expenses and averaging or attribution methods as such Lender shall deem reasonable) to be necessary to indemnify such Lender for such loss or expense. Such notice shall set forth in reasonable detail
the basis for such determination. Such amount shall be due and payable by the Borrowers to such Lender ten (10) Business Days after such notice is given.
5.11 Settlement Date Procedures. In
order to minimize the transfer of funds between the Lenders and the Administrative Agent, the Borrowers may borrow, repay and reborrow Swing Loans and the Swing Loan Lender may make Swing Loans as provided in Section 2.1.2 [Swing Loan
Commitments] hereof during the period between Settlement Dates. The Administrative Agent shall notify each Lender of its Ratable Share of the total of the Revolving Credit Loans and the Swing Loans (each a “Required
Share”). On such Settlement Date, each Lender shall pay to the Administrative Agent the amount equal to the difference between its Required Share and its Revolving Credit Loans, and the Administrative Agent shall pay to each Lender its
Ratable Share of all payments made by the Borrowers to the Administrative Agent with respect to the Revolving Credit Loans. In addition to effecting settlement on each Settlement Date, the Administrative Agent shall also effect settlement in
accordance with the procedures outlined in the foregoing sentence on the proposed Borrowing Dates for Revolving Credit Loans and on any mandatory prepayment date as provided for herein and may at its option effect settlement on any other Business
Day. These settlement procedures are established solely as a matter of administrative convenience, and nothing contained in this Section 5.11 shall relieve the Lenders of their obligations to fund Revolving Credit Loans on dates other than a
Settlement Date pursuant to Section 2.1.2 [Swing Loan Commitment]. The Administrative Agent may at any time at its option for any reason whatsoever require each Lender to pay immediately to the Administrative Agent such Lender's Ratable Share of
the outstanding Revolving Credit Loans and each Lender may at any time require the Administrative Agent to pay immediately to such Lender its Ratable Share of all payments made by the Borrowers to the Administrative Agent with respect to the
Revolving Credit Loans.
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5.12 Cash Collateral. At any time that there shall exist a Defaulting Lender, within one (1) Business Day following the written request of the Administrative Agent or the Issuing
Lender (with a copy to the Administrative Agent) the Borrowers shall Cash Collateralize the Issuing Lender’s Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.10.1(iv) [Reallocation of
Participations to Reduce Fronting Exposure] and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.
(i) Grant of Security Interest. The Borrowers, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the
benefit of the Issuing Lender, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of Letter of Credit Obligations, to be
applied pursuant to clause (b) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Lender as herein provided, or that
the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount
sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).
(ii) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 5.12 or Section 2.10 [Defaulting Lender] in
respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of Letter of Credit Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any
interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.
(iii) Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce the Issuing Lender’s Fronting Exposure shall no longer be required to be
held as Cash Collateral pursuant to this Section 5.12 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the
Administrative Agent and the Issuing Lender that there exists excess Cash Collateral; provided that, subject to Section 2.10 [Defaulting Lenders] the Person providing Cash Collateral and the Issuing Lender may agree that Cash Collateral
shall be held to support future anticipated Fronting Exposure or other obligations and provided further that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the
security interest granted pursuant to Section 5.12(a) above.
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5.13 Replacement of a Lender. In the event any Lender (i) gives notice under Section 4.4 [Rate Unascertainable, Etc.], (ii) requests compensation under Section 5.8 [Increased
Costs], or requires the Borrowers to pay any Indemnified Taxes or additional amount to any Lender or any Official Body for the account of any Lender pursuant to Section 5.9 [Taxes], (iii) is a Defaulting Lender, (iv) becomes subject to the
control of an Official Body (other than normal and customary supervision), or (v) is a Non-Consenting Lender referred to in Section 11.1 [Modifications, Amendments or Waivers], then in any such event the Borrowers may, at their sole expense, upon
notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.8 [Successors and Assigns]),
all of its interests, rights (other than existing rights to payments pursuant to Section 5.8 [Increased Costs] or 5.9 [Taxes]) and indemnification and other rights which expressly survive Payment in Full as provided in this Agreement and the
other Loan Documents and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(i) the Borrowers shall have paid to the Administrative Agent the assignment fee specified in Section 11.8 [Successors and Assigns];
(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and Participation Advances, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 5.10 [Indemnity]) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case
of all other amounts);
(iii) in the case of any such assignment resulting from a claim for compensation under Section 5.8.1 [Increased Costs Generally] or payments required to be made pursuant to Section 5.9
[Taxes], such assignment will result in a reduction in such compensation or payments thereafter;
(iv) such assignment does not conflict with applicable Law; and
(v) in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment
and delegation cease to apply.
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5.14 Designation of a Different Lending Office. If any Lender requests compensation under Section 5.8 [Increased Costs], or the Borrowers are or will be required to pay any
Indemnified Taxes or additional amounts to any Lender or any Official Body for the account of any Lender pursuant to Section 5.9 [Taxes], then such Lender shall (at the request of the Borrowers) use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 5.8 [Increased Costs] or Section 5.9 [Taxes], as the case may be, in the future, and (ii) would not subject such Lender to any material unreimbursed cost or expense and would not otherwise
be materially disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
6.1 Representations and Warranties. The Loan Parties, jointly and severally, represent and warrant to the Administrative
Agent and each of the Lenders as follows:
6.1.1 Organization and Qualification; Power and Authority; Compliance With Laws; Title to Properties; Event of Default.
Each Loan Party (i) is a corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the Laws of its jurisdiction of organization, (ii) has all necessary lawful power and authority,
and all necessary licenses, approvals and authorizations to own or lease its properties and to engage in the business it presently conducts or proposes to conduct, (iii) is duly licensed or qualified and in good standing in each jurisdiction
listed on Schedule 6.1.1 and in all other jurisdictions where the property owned or leased by it or the nature of the business transacted by it or both makes such licensing or qualification necessary except where the failure to do so
would not constitute a Material Adverse Change, (iv) has full power and authority to enter into, execute, deliver and carry out this Agreement and the other Loan Documents to which it is a party, to incur the Indebtedness contemplated by the Loan
Documents and to perform its Obligations under the Loan Documents to which it is a party, and all such actions have been duly authorized by all necessary action and proceedings on its part, (v) is in compliance in all material respects with all
applicable Laws (other than Environmental Laws which are specifically addressed in Section 6.1.14 [Environmental Matters]) in all jurisdictions in which any Loan Party is presently or will be doing business except where (A) the failure to do so,
either individually or in the aggregate, would not reasonably be expected to constitute a Material Adverse Change or (B) any non-compliance is being contested in good faith by appropriate proceedings diligently conducted, and (vi) has good and
marketable title to or valid leasehold interest in all properties, assets and other rights which it purports to own or lease or which are reflected as owned or leased on its books and records, free and clear of all Liens and encumbrances except
Permitted Liens. No Event of Default or Potential Default exists or is continuing.
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6.1.2 Subsidiaries and Owners; Investment Companies. Schedule
6.1.2 states (i) the name of each holder of an equity interest in each Borrower (other than the Company), the amount, percentage and type of such equity interest (the “Borrowers Equity Interests”),
(ii) the name of each Loan Party’s Subsidiaries, the jurisdiction of organization of each Loan Party and each of its Subsidiaries, and the amount, percentage and type of such Loan Party's equity interests in such Subsidiary, to the extent that
such information is not included in clause (i) of this Section (the “Subsidiary Equity Interests”), and (iii) any options, warrants or other rights outstanding to
purchase any such equity interests referred to in clauses (i) and (ii) of this Section (collectively the “Equity Interests”). Each Borrower and each Subsidiary thereof has good and marketable title to all
of the Subsidiary Equity Interests it purports to own, free and clear in each case of any Lien and all such Subsidiary Equity Interests have been validly issued, fully paid and nonassessable. None of the Loan Parties or Subsidiaries of any Loan
Party is an “investment company” registered or required to be registered under the Investment Company Act of 1940 or under the “control” of an “investment company” as such terms are defined in the
Investment Company Act of 1940 and shall not become such an “investment company” or under such “control.”
6.1.3 Validity and Binding Effect. This Agreement and each of the other Loan Documents (i) has been duly and validly
executed and delivered by each Loan Party, and (ii) constitutes, or will constitute, legal, valid and binding obligations of each Loan Party which is or will be a party thereto, enforceable against such Loan Party in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity.
6.1.4 No Conflict; Material Agreements; Consents. Neither the execution and delivery of this Agreement or the other Loan
Documents by any Loan Party nor the consummation of the transactions herein or therein contemplated or compliance with the terms and provisions hereof or thereof by any of them will conflict with, constitute a default under or result in any
breach of (i) the terms and conditions of the certificate of incorporation, bylaws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement or other organizational documents of any
Loan Party or (ii) any Law or any material agreement or instrument or order, writ, judgment, injunction or decree to which any Loan Party is a party or by which it is bound or to which it is subject, or result in the creation or enforcement of
any Lien, charge or encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan Party (other than Liens granted under the Loan Documents). There is no default under such material agreement (referred to above) which
constitutes a Material Adverse Change and none of the Loan Parties is bound by any contractual obligation, or subject to any restriction in any organization document, or any requirement of Law which constitutes a Material Adverse Change. No
consent, approval, exemption, order or authorization of, or a registration or filing with, any Official Body or any other Person is required by any Law or any agreement in connection with the execution, delivery and carrying out of this Agreement
and the other Loan Documents other than filings to perfect the security interests contemplated by the Loan Documents.
6.1.5 Litigation. There are no actions, suits, claims, proceedings or investigations pending or, to the knowledge of any
Loan Party, threatened against such Loan Party or any Subsidiary of such Loan Party or any of their properties at law or in equity before any Official Body which (a) individually or in the aggregate would reasonably be expected to result in any
Material Adverse Change or (b) state to affect, impact or restate this Agreement or any of the other Loan Documents or the transactions contemplated hereby or thereby. None of the Loan Parties or any Subsidiaries of any Loan Party is in
violation of any order, writ, injunction or any decree of any Official Body which would reasonably be expected to result in any Material Adverse Change.
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(i) Historical Statements. The Loan Parties have delivered to the Administrative Agent copies of their audited consolidated and consolidating
year-end financial statements for and as of the end of the fiscal year ended on or about September 27, 2024. In addition, the Loan Parties have delivered to the Administrative Agent copies of their unaudited consolidated interim financial
statements for the fiscal year to date and as of the end of the fiscal quarter ended June 27, 2025, all such annual and interim statements being collectively referred to as the “Statements”). The
Statements were compiled from the books and records maintained by the Loan Parties' management, are correct and complete in all material respects and fairly represent the consolidated and consolidating financial condition of the Loan Parties and
their Subsidiaries as of the respective dates thereof and the results of operations for the fiscal periods then ended and have been prepared in accordance with GAAP consistently applied, subject (in the case of the interim statements) to normal
year-end audit adjustments.
(ii) Accuracy of Financial Statements. No Borrower nor any Subsidiary thereof has any material liabilities, contingent or otherwise, or forward or long-term commitments that are
not disclosed in the Statements or in the notes thereto, and except as disclosed therein there are no unrealized or anticipated losses from any commitments of the Borrowers or any Subsidiary thereof which constitutes a Material Adverse Change.
Since September 27, 2024, no event has occurred which could reasonably be expected to be material and adverse to the business, properties, assets, financial condition or results of operations of the Loan Parties taken as a whole.
(iii) Financial Projections. The Borrowers have delivered to the Administrative Agent a summary of projected financial statements (including, without limitation, statements of
operations and cash flow together with a detailed explanation of the assumptions used in preparing such projected financial statements) of the Borrowers and their Subsidiaries for the period from the Closing Date through 2029 derived from various
assumptions of the Loan Parties’ management (the “Projections”). The Projections represent a reasonable range of possible results in light of the history of the business, present and foreseeable conditions
and the intentions of the Borrowers’ management, it being understood that such Projections are (i) as to future events and not to be viewed as facts, (ii) are subject to significant uncertainties and contingencies, many of which are beyond the
Loan Parties’ control, and (iii) no assurance can be given that the Projections will be realized.
6.1.7 Margin Stock. None of the Loan Parties engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately, incidentally or ultimately, of purchasing or carrying margin stock (within the meaning of Regulation U, T or X as promulgated by the Board of Governors of the Federal
Reserve System). No part of the proceeds of any Loan has been or will be used, immediately, incidentally or ultimately, to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin
stock or which is inconsistent with the provisions of the regulations of the Board of Governors of the Federal Reserve System. None of the Loan Parties holds or intends to hold margin stock in such amounts that more than 25% of the reasonable
value of the assets of any Loan Party are or will be represented by margin stock.
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6.1.8 Full Disclosure. Neither this Agreement nor any other Loan Document, nor any certificate, statement, agreement or other documents furnished to the
Administrative Agent or any Lender by a Loan Party in connection herewith or therewith, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein, in
light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, each Loan Party represents only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time. As of the date of this Agreement, there is no fact known to any Loan Party which materially adversely affects the business, property, assets, financial condition, or results of operations of any Loan Party
which has not been set forth in this Agreement or in the certificates, statements, agreements or other documents furnished in writing by a Loan Party to the Administrative Agent and the Lenders prior to or at the date hereof in connection with
the transactions contemplated hereby.
6.1.9 Taxes. All material federal, state, local and other tax returns required to have been filed with respect to each Loan
Party have been filed, and payment or adequate provision has been made for the payment of all material taxes, fees, assessments and other governmental charges which have or may become due pursuant to said returns or to assessments received,
except to the extent that such taxes, fees, assessments and other charges are being contested in good faith by appropriate proceedings diligently conducted and for which such reserves or other appropriate provisions, if any, as shall be required
by GAAP shall have been made.
6.1.10 Patents, Trademarks, Copyrights, Licenses, Etc. Each Loan Party owns or possesses all the material patents,
trademarks, service marks, trade names, copyrights, licenses, registrations, franchises, permits and rights necessary to own and operate its properties and to carry on its business as presently conducted and planned to be conducted by such Loan
Party, without known possible, alleged or actual conflict with the rights of others which constitutes, individually or in the aggregate, a Material Adverse Change.
6.1.11 Liens in the Collateral. The Liens in the Collateral granted to the Administrative
Agent for the benefit of the Secured Parties pursuant to the Collateral Documents constitute and will continue to constitute first priority, perfected security interests, except in the case of (a) Permitted Liens, to the extent any such Permitted
Liens would have priority over Liens in favor of the Administrative Agent pursuant to any applicable Law and (b) Liens perfected only by possession, to the extent the Administrative Agent has not obtained or does not maintain possession of such
Collateral. All filing fees and other expenses in connection with the perfection of such Liens have been or will be paid by the Borrowers.
6.1.12 Insurance. The properties of each Loan Party are insured pursuant to policies and other bonds which are valid and in
full force and effect and which provide adequate coverage from reputable and financially sound insurers in amounts sufficient to insure the assets and risks of each such Loan Party in accordance with prudent business practice in the industry of
such Loan Parties.
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(i) Each Pension Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state Laws. Each Pension Plan that is intended to
qualify under Section 401(a) of the Code has received from the IRS a favorable determination or opinion letter, which has not by its terms expired, that such Pension Plan is so qualified, or such Pension Plan is entitled to rely on an IRS
advisory or opinion letter with respect to an IRS-approved master and prototype or volume submitter plan, or a timely application for such a determination or opinion letter is currently being processed by the IRS with respect thereto; and, to
the best knowledge of Borrowers, nothing has occurred which would prevent, or cause the loss of, such qualification. Borrowers and each member of the ERISA Group have made all required contributions to each Pension Plan subject to Sections 412
or 430 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Sections 412 or 430 of the Code has been made with respect to any Pension Plan.
(ii) There are no pending or, to the best knowledge of the Borrowers, threatened claims, actions or lawsuits, or action by any Official Body, with respect to any Pension Plan that could
reasonably be expected to result in a Material Adverse Change. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Pension Plan that has resulted or could reasonably be expected to
result in a Material Adverse Change.
(iii) (a) No ERISA Event has occurred or is reasonably expected to occur; (b) no Pension Plan has any unfunded pension liability (i.e., excess of benefit liabilities over the current
value of that Pension Plan's assets, determined pursuant to the assumptions used for funding the Pension Plan for the applicable plan year in accordance with Section 430 of the Code); (c) no Borrower nor any member of the ERISA Group has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (d) no Borrower nor any member of the ERISA Group has
incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 of ERISA, with respect to a Multiemployer Plan;
(e) no Borrower nor any member of the ERISA Group has received notice pursuant to Section 4242(a)(1)(B) of ERISA that a Multiemployer Plan is in reorganization and that additional contributions are due to the Multiemployer Plan pursuant to
Section 4243 of ERISA; (f) no Borrower nor any member of the ERISA Group has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA; and (g) no Pension Plan or Multiemployer Plan has been terminated by the plan
administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan or Multiemployer Plan.
6.1.14 Environmental Matters. Each Loan Party is and, to the knowledge of each respective Loan
Party has been in compliance with applicable Environmental Laws except where failure to do so does not in the aggregate constitute a Material Adverse Change.
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6.1.15 Solvency. On the Closing Date and after giving effect to the initial Loans hereunder, each of the Loan Parties is Solvent.
6.1.16 Sanctions; International Trade, Anti-Money Laundering and Anti-Corruption Laws. No Covered Entity nor any of its
directors, officers, or employees, nor, to the knowledge of any Loan Party, any agents or affiliates acting on behalf of any Covered Entity: (a) is a Sanctioned Person; (b) does business in or with, or derives any of its income, directly or
indirectly, from any Sanctioned Person or any Sanctioned Jurisdiction; or (c) is in violation of, or is, directly or indirectly, taking any action that could cause any Covered Entity to be in violation of, applicable International Trade Laws,
Sanctions, Anti-Money Laundering Laws, or Anti-Corruption Laws. No Covered Entity nor any of its directors, officers, or employees, nor to the knowledge of any Loan Party, any agents or affiliates acting on behalf of any Covered Entity: (x) is in
receipt of any notice or communication from any Compliance Authority that alleges, or otherwise pertains to, an actual or potential violation of any International Trade Laws, Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws; or (y)
is the target or subject of any investigation, or has received any request for information, involving any allegation relating to a violation of any International Trade Laws, Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws by an
Official Body. Each Covered Entity has instituted, maintains, and enforces policies and procedures reasonably designed to ensure compliance with applicable International Trade Laws, Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws.
There is no Covered Property pledged as Collateral.
6.1.17 Certificate of Beneficial Ownership. The Certificate of Beneficial Ownership executed and delivered to the Administrative Agent and Lenders for
each Borrower on or prior to the date of this Agreement, as updated from time to time in accordance with this Agreement, is accurate, complete and correct as of the date hereof and as of the date any such update is delivered. The Borrowers
acknowledge and agree that the Certificate of Beneficial Ownership is one of the Loan Documents.
6.1.18 Labor Matters. The Loan Parties have not experienced any strike, labor dispute, slow-down or work stoppage due
to labor disagreements which constitutes a Material Adverse Change.
6.2 Updates to Schedules. Should any of the information or disclosures provided on any of the Schedules attached hereto
become outdated or incorrect in any material respect, the Borrowers shall promptly provide the Administrative Agent in writing with such revisions or updates to such Schedule as may be necessary or appropriate to update or correct same. No
Schedule shall be deemed to have been amended, modified or superseded by any such correction or update, nor shall any breach of warranty or representation resulting from the inaccuracy or incompleteness of any such Schedule be deemed to have been
cured thereby, unless and until the Administrative Agent, with the consent of the Required Lenders, in their sole and absolute discretion, shall have accepted in writing such revisions or updates to such Schedule; provided however, that the
Borrowers may update any Schedules with any changes occurring after the Closing Date which are not prohibited by Article 8 [Covenants] hereof.
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The obligation of each Lender to make Loans and of the Issuing Lender to issue Letters of Credit hereunder is subject to the performance by each of the Loan Parties of its Obligations to be
performed hereunder at or prior to the making of any such Loans or issuance of such Letters of Credit and to the satisfaction of the following further conditions:
7.1.1 Deliveries. On the Closing Date, the Administrative Agent shall have received each of the following in form and
substance satisfactory to the Administrative Agent:
(i) A certificate of each of the Loan Parties signed by an Authorized Officer, dated the Closing Date stating that (A) all representations and warranties of the Loan Parties set forth in
this Agreement are true and correct in all material respects, (B) the Loan Parties are in compliance with each of the covenants and conditions hereunder, C) no Event of Default or Potential Default exists, (D) no Material Adverse Change has
occurred since the date of the last audited financial statements of the Borrowers delivered to the Administrative Agent; and (E) there are no actions, suits, proceedings or investigations pending or, to the knowledge of any Loan Party, threatened
against such Loan Party at law or in equity before any Official Body which individually or in the aggregate constitute a Material Adverse Change.
(ii) A certificate dated the Closing Date and signed by the Secretary or an Assistant Secretary of each of the Loan Parties, certifying as appropriate as to: (a) all action taken by each
Loan Party in connection with this Agreement and the other Loan Documents; (b) the names of the Authorized Officers authorized to sign the Loan Documents and their true signatures; and (c) copies of its organizational documents as in effect on
the Closing Date certified by the appropriate state official where such documents are filed in a state office together with certificates from the appropriate state officials as to the continued existence and good standing of each Loan Party in
each state where organized;
(iii) This Agreement and each of the other Loan Documents signed by an Authorized Officer and all appropriate financing statements in connection with the Collateral;
(iv) A written opinion of counsel for the Loan Parties, dated the Closing Date in form and substance satisfactory to the Administrative Agent and its counsel;
(v) Evidence that adequate insurance, including flood insurance, if applicable, required to be maintained under this Agreement is in full force and effect, with additional insured and
lender loss payable special endorsements attached thereto in form and substance satisfactory to the Administrative Agent and its counsel naming the Administrative Agent as additional insured and lender loss payee;
(vi) A duly completed Compliance Certificate as of the last day of the fiscal quarter of Borrowers ended June 27, 2025, signed by an Authorized Officer of Borrowers and setting forth pro
forma compliance with the financial covenants contained herein;
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(vii) All consents and regulatory approvals and licenses necessary to effectuate the transactions contemplated hereby shall have been completed and there
shall be an absence of any legal or regulatory prohibitions or restrictions;
(viii) Evidence that the indebtedness and obligations under the Existing Credit Agreement have been amended and restated and shall from and after the Closing Date be evidenced by this
Agreement and the other Loan Documents;
(ix) Lien searches in acceptable scope and with acceptable results;
(x) The Statements and the Projections;
(xi) An executed Certificate of Beneficial Ownership in form and substance acceptable to the Administrative Agent and each Lender, and such other documentation and other information
requested in connection with the applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act; and
(xii) Such other documents in connection with such transactions as the Administrative Agent or its counsel may reasonably request.
7.1.2 Payment of Fees. The Borrowers shall have paid all fees and expenses payable on or before the Closing Date as
required by this Agreement, the Administrative Agent's Letter or any other Loan Document.
Without limiting the generality of the provisions of the last paragraph of Section 9.3 [Exculpatory Provisions], for purposes of determining compliance with the conditions specified in this
Section 7.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
7.2 Each
Loan or Letter of Credit. At the time of making any Loans or issuing, extending or increasing any Letters of Credit and after giving effect to the proposed extensions of credit: (i) the representations, warranties of the Loan Parties shall
then be true and correct in all material respects, provided, however, that to the extent any such representation or warranty is already qualified by materiality or Material Adverse Change, such representation or warranty shall be
true and correct in all respects, and except that for purposes of this Section 7.2, the representations and warranties contained in Section 6.1.6 [Financial Statements; Projections] shall be deemed to refer to the most recent statements furnished
pursuant to Section 8.3 [Reporting Requirements] (ii) no Event of Default or Potential Default shall have occurred and be continuing or would result from such Loan or Letter of Credit or the application of proceeds thereof, (iii) the making of
the Loans or issuance, extension or increase of such Letter of Credit shall not contravene any Law applicable to any Loan Party or any of the Lenders, and (iv) the Borrowers shall have delivered to the Administrative Agent a duly executed and
completed Loan Request or to the Issuing Lender an application for a Letter of Credit, as the case may be. Each Loan Request and Letter of Credit application shall be deemed to be a representation that the conditions specified in Section 7.1.1
[Deliveries] shall have been satisfied on or prior to the date thereof.
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The Loan Parties, jointly and severally, covenant and agree that until Payment In Full, the Loan Parties shall comply at all times with the following covenants:
8.1.1 Preservation of Existence, Etc. Except as otherwise expressly permitted in Section 8.2.6 [Liquidations, Mergers,
Etc.], each Loan Party shall maintain its legal existence as a corporation, limited partnership or limited liability company and its license or qualification and good standing (A) in each jurisdiction of formation or incorporation, as applicable,
listed on Schedule 6.1.1, and (B) in all other jurisdictions in which its ownership or lease of property or the nature of its business makes such license or qualification necessary except where failure to do so would not constitute a
Material Adverse Change. Each Loan Party shall maintain all licenses, consents, permits, franchises, rights and qualifications necessary for the standard operation of its business, except where the maintenance thereof could not reasonably be
expected to result in a Material Adverse Change. Each Loan Party shall maintain and preserve all intellectual properties, including without limitation trademarks, trade names, patents, copyrights and other marks, registered and necessary for the
standard operation of its business except where the maintenance thereof could not reasonably be expected to result in a Material Adverse Change.
8.1.2 Payment of Liabilities, Including Taxes, Etc. Each Loan Party shall duly pay and discharge (a) all material
liabilities to which it is subject or which are asserted against it, promptly as and when the same shall become due and payable, including all material taxes, assessments and governmental charges upon it or
any of its properties, assets, income or profits, prior to the date on which penalties attach thereto, except to the extent that such liabilities, including taxes, assessments or charges, are being contested in good faith and by appropriate and
lawful proceedings diligently conducted and for which such reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made and (b) all lawful and valid claims which, if unpaid, would result in the attachment of
a Lien on its property as a matter of Law or contract.
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8.1.3 Maintenance of Insurance. Each Loan Party shall insure its properties and assets against loss or damage by fire and such other insurable hazards
as such assets are commonly insured (including fire, extended coverage, property damage, workers’ compensation, public liability and business interruption insurance) and against other risks (including errors and omissions) in such amounts as
similar properties and assets are insured by prudent companies in similar circumstances carrying on similar businesses, and with reputable and financially sound insurers, including self-insurance to the extent customary, all as reasonably
determined by the Administrative Agent. At the request of the Administrative Agent, the Loan Parties shall deliver to the Administrative Agent and each of the Lenders (x) on the Closing Date and annually thereafter an original certificate of
insurance signed by the Loan Parties’ independent insurance broker describing and certifying as to the existence of the insurance on the Collateral required to be maintained by this Agreement and the other Loan Documents, together with a copy of
the endorsement described in the next sentence attached to such certificate, and (y) from time to time a summary schedule indicating all insurance then in force with respect to each of the Loan Parties. Such policies of insurance shall contain
special endorsements which include the provisions specified below or are otherwise in form acceptable to the Administrative Agent in its discretion. The applicable Loan Parties shall notify the Administrative Agent promptly of any occurrence
causing a material loss or decline in value of the Collateral and the estimated (or actual, if available) amount of such loss or decline. Any monies received by the Administrative Agent constituting insurance proceeds may, at the option of the
Administrative Agent, (a) in the case of property insurance proceeds received during the existence of an Event of Default, be applied by the Administrative Agent to the payment of the Obligations in accordance with the terms of the Credit
Agreement, (b) for losses of less than $1,000,000 received at such time as no Event of Default or Potential Default exists, be disbursed by the Administrative Agent to the applicable Loan Parties, and (c) for losses equal to or greater than
$1,000,000 received at such time as no Event of Default or Potential Default exists, be disbursed by the Administrative Agent to the applicable Loan Parties on such terms as are deemed appropriate by the Administrative Agent for the repair,
restoration and/or replacement of Collateral and other property in respect of which such proceeds were received.
8.1.4 Maintenance of Properties and Leases. Each Loan Party shall maintain in good repair, working order and condition
(ordinary wear and tear excepted), in accordance with the general practice of other businesses of similar character and size, all of those properties and equipment useful or necessary to its business, and from time to time, such Loan Party will
make or cause to be made all appropriate repairs, renewals or replacements thereof.
8.1.5 Visitation Rights. Each Loan Party shall permit any of the officers or authorized
employees or representatives of the Administrative Agent or any of the Lenders to visit and inspect any of its properties and to examine and make excerpts from its books and records and discuss its business affairs, finances and accounts with its
officers, all in such detail and at such times and as often as any of the Lenders may reasonably request, provided that each Lender shall provide the Borrowers and the Administrative Agent with reasonable notice prior to any visit or
inspection, and provided further that the Borrowers shall not be responsible for the expenses of more than one audit, visit or inspection of the Administrative Agent and the Lenders collectively in any fiscal year unless an Event
of Default has occurred and is continuing. In the event any Lender desires to conduct an audit of any Loan Party, such Lender shall make a reasonable effort to conduct such audit contemporaneously with any audit to be performed by the
Administrative Agent.
8.1.6 Keeping of Records and Books of Account. The Borrowers shall maintain and keep proper books of record and account
which enable the Borrowers to issue financial statements in accordance with GAAP consistently applied and as otherwise required by applicable Laws of any Official Body having jurisdiction over the Borrowers and in which full, true and correct
entries shall be made in all material respects of all its dealings and business and financial affairs.
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8.1.7 Compliance with Laws; Use of Proceeds. Each Loan Party shall comply with all applicable Laws, including all
Environmental Laws, in all respects except where any failure to comply with any Law, individually or in the aggregate, shall not constitute a Material Adverse Change. The Loan Parties will use the Letters of Credit and the proceeds of the Loans
only in accordance with Section 2.8 [Use of Proceeds] and as permitted by applicable Law.
8.1.8 Further Assurances. Each Loan Party shall, from time to time, at its expense, faithfully preserve and protect the
Administrative Agent’s Lien on and first priority security interest in the Collateral whether now owned or hereafter acquired as a continuing first priority perfected Lien, subject only to Permitted Liens, and shall do such other acts and things
as the Administrative Agent in its sole discretion may deem necessary or advisable from time to time in order to preserve, perfect and protect the Liens granted under the Loan Documents and to exercise and enforce its rights and remedies
thereunder with respect to the Collateral.
8.1.9 Sanctions; International Trade, Anti-Money Laundering, and Anti-Corruption Laws. Each
Loan Party shall: (a) in the event that any Collateral becomes Covered Property, promptly notify the Administrative Agent and provide to the Administrative Agent additional Collateral that is not Covered Property of at least equal value to the
Collateral that became Covered Property, except to the extent prohibited by applicable Law; and (b) comply with applicable International Trade Laws, Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws and maintain and enforce policies
and procedures reasonably designed to ensure compliance with all applicable International Trade Laws, Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws by each Covered Entity, each Covered Entity’s directors and officers, and any
employee, agent or affiliate acting on behalf of each Covered Entity in connection with this Agreement.
8.1.10 Keepwell. Each Qualified ECP Loan Party jointly and severally (together with each other Qualified ECP Loan Party) hereby absolutely unconditionally
and irrevocably (a) guarantees the prompt payment and performance of all Swap Obligations owing by each Non-Qualifying Party (it being understood and agreed that this guarantee is a guaranty of payment and not of collection), and (b) undertakes
to provide such funds or other support as may be needed from time to time by any Non-Qualifying Party to honor all of such Non‑Qualifying Party’s obligations under this Agreement or any other Loan Document in respect of Swap Obligations
(provided, however, that each Qualified ECP Loan Party shall only be liable under this Section 8.1.10 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 8.1.10, or otherwise
under this Agreement or any other Loan Document, voidable under applicable law, including applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Loan Party
under this Section 8.1.10 shall remain in full force and effect until Payment In Full of the Obligations and termination of this Agreement and the other Loan Documents. Each Qualified ECP Loan Party intends that this Section 8.1.10 constitute,
and this Section 8.1.10 shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18(A)(v)(II) of the CEA.
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8.1.11 Certificate of Beneficial Ownership and Other Additional Information. Each of the Loan Parties shall provide to the Administrative Agent and the Lenders: (i) confirmation of
the accuracy of the information set forth in the most recent Certificate of Beneficial Ownership provided to the Administrative Agent and Lenders; (ii) a new Certificate of Beneficial Ownership, in form and substance acceptable to the
Administrative Agent and each Lender, when there is a change to the list of beneficial owners identified therein; and (iii) such other information and documentation as may reasonably be requested by the Administrative Agent or any Lender from
time to time for purposes of compliance by the Administrative Agent or such Lender with applicable Laws (including without limitation the USA PATRIOT Act and other “know your customer” and anti-money laundering rules and regulations), and any
policy or procedure implemented by the Administrative Agent or such Lender to comply therewith.
8.1.12 Post Closing Covenants. The Borrowers shall use commercially reasonable efforts to obtain within ninety (90) days of the Closing Date an executed landlord’s waiver or other
lien waiver and/or subordination agreement in a form satisfactory to the Administrative Agent from the lessor, warehouse operator or other applicable Person for each leased location or premises of a Borrower where Collateral having value in
excess of $1,000,000 is located or stored.
8.2.1 Indebtedness. Each of the Loan Parties shall not at any time create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on Schedule 8.2.1 (including any extensions or renewals thereof); provided there is no increase in the amount thereof or other
significant change in the terms thereof unless otherwise specified on Schedule 8.2.1;
(iii) Indebtedness incurred with respect to Purchase Money Security Interests and capitalized leases secured by Liens permitted under Section 8.2.2 hereof;
(iv) Indebtedness of a Loan Party to another Loan Party which is subordinated pursuant to the Intercompany Subordination Agreement;
(v) Indebtedness of a Loan Party to a direct or indirect Foreign Subsidiary of a Loan Party;
(vi) Any (i) Lender Provided Interest Rate Hedge, (ii) Lender Provided Foreign Currency Hedge, (ii) other Interest Rate Hedge or Foreign Currency Hedge approved by the Administrative Agent
or (iii) Indebtedness under any Other Lender Provided Financial Service Products; provided however, the Loan Parties shall enter into an Interest Rate Hedge or Foreign Currency Hedge only for hedging (rather than speculative) purposes;
(vii) Indebtedness available to any Loan Party under federal, state or local incentive loan programs which provide rates that are generally more favorable to Loan Parties than those that
are commercially available from traditional lenders in an amount not to exceed Five Million Dollars ($5,000,000) in the aggregate at any time and after giving effect to the incurrence of such Indebtedness no Potential Default or Event of Default
exists or would occur; and
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(viii) Other unsecured Indebtedness up to an aggregate amount of $5,000,000 at any time outstanding.
8.2.2 Liens; Lien Covenants. Each of the Loan Parties shall not at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or hereafter acquired, or agree or become liable to do so, except Permitted Liens.
8.2.3 Guaranties. Each of the Loan Parties shall not at any time, directly or indirectly, become or be liable in respect of
any Guaranty, or assume, guarantee, become surety for, endorse or otherwise agree, become or remain directly or contingently liable upon or with respect to any obligation or liability of any other Person, except for Guaranties of Indebtedness of
the Loan Parties permitted hereunder.
(a) Each of the Loan Parties shall not at any time make or suffer to remain outstanding any loan or advance to any other Person, except:
(i) trade credit extended on usual and customary terms in the ordinary course of business;
(ii) advances to employees to meet expenses incurred by such employees in the ordinary course of business; and
(iii) loans and advances to other Loan Parties.
(b) Each of the Loan Parties shall not at any time make any Restricted Investments in Foreign Subsidiaries, except for Restricted Investments in the Foreign Subsidiaries (i) existing on the
Closing Date and set forth on Schedule 8.2.4 and (ii) made after the Closing Date not exceeding $20,000,000 in the aggregate at any one time.
8.2.5 Dividends, Stock Repurchases and Related Distributions. Each of the Loan Parties shall not make or pay, or agree to
become or remain liable to make or pay, any dividend or other distribution of any nature (whether in cash, property, securities or otherwise) on account of or in respect of its shares of Capital Stock, or on account of the purchase, redemption,
retirement or acquisition of its shares of Capital Stock (or warrants, options or rights therefor), except for (i) dividends or other distributions payable to another Loan Party; and (ii) so long as no Potential Default or Event of Default exists
or would result therefrom and the Borrowers are in pro forma compliance with the financial covenants contained in Sections 8.2.14 and 8.2.15 after giving effect thereto, dividends, distributions, or payments on account of the repurchase,
redemption, retirement or acquisition of the Company's Capital Stock.
8.2.6 Liquidations,
Mergers, Consolidations, Acquisitions. Each of the Loan Parties shall not dissolve, liquidate or wind-up its affairs, or become a party to any merger or consolidation, or acquire by purchase, lease or otherwise all or substantially all of
the assets or Capital Stock of any other Person or consummate an LLC Division; provided that:
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(i) any Loan Party other than the Company may consolidate or merge into another Loan Party which is wholly-owned by one or more of the other Loan Parties; and
(ii) any Loan Party may acquire, whether by purchase or by merger: (a) all of the ownership interests of another Person; or (b) substantially all of
assets of another Person or of a business or division of another Person (each a “Permitted Acquisition”), provided that each of the following
requirements is met:
(a) if a Loan Party is acquiring the ownership interests in such Person, such Person shall execute a Borrower Joinder or Guarantor Joinder, as applicable, and join this Agreement as a
Borrower or Guarantor, as applicable, within thirty (30) days after the date of such Permitted Acquisition;
(b) the board of directors or other equivalent governing body of such Person shall have approved such Permitted Acquisition and, if the Loan Parties
shall use any portion of the Loans to fund such Permitted Acquisition, the Loan Parties also shall have delivered to the Lenders written evidence of the approval of the board of directors (or equivalent body) of such Person for such Permitted
Acquisition;
(c) the business acquired, or the business conducted by the Person whose ownership interests are being acquired, as applicable, shall be similar or
complimentary to one or more line or lines of business or operations conducted by the Loan Parties;
(d) no Potential Default or Event of Default shall exist immediately prior to and after giving effect to such Permitted Acquisition based on the most
recent quarterly financial statements delivered to the Administrative Agent pursuant to Section 8.3.1 (and after including the financial impact of the Permitted Acquisition for the trailing twelve month period covered thereby);
(e) after giving effect to such Permitted Acquisition (including the payment of all consideration payable as of the date of such Permitted Acquisition
and all fees and transaction costs incurred in connection with such Permitted Acquisition), the Loan Parties shall be in pro forma compliance with the financial covenants contained in Sections 8.2.14 and 8.2.15; and
(f) the Loan Parties shall deliver to the Administrative Agent at least five (5) Business Days before such Permitted Acquisition copies of any
agreements entered into or proposed to be entered into by such Loan Parties in connection with such Permitted Acquisition, and shall deliver to the Administrative Agent such other information about such Person or its assets as any Lender may
reasonably require.
8.2.7 Dispositions
of Assets or Subsidiaries. Each of the Loan Parties shall not sell, convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any of its properties or assets, tangible or intangible, including, in
each case, by way of an LLC Division (including sale, assignment, discount or other disposition of accounts, contract rights, chattel paper, equipment or general intangibles with or without recourse or of Capital Stock of a Subsidiary of such
Loan Party), except:
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(i) transactions involving the sale of inventory in the ordinary course of business;
(ii) any sale, transfer or lease of assets in the ordinary course of business which are no longer necessary or required in the conduct of such Loan Party's business;
(iii) any sale, transfer or lease of assets by any wholly owned Subsidiary of such Loan Party to another Loan Party;
(iv) any sale, transfer or lease of assets in the ordinary course of business which are replaced by substitute assets acquired or leased; or
(v) other arms-length sales, transfers and dispositions so long as the fair market value of the assets transferred does not exceed $5,000,000 in the aggregate during any fiscal year of
the Borrowers.
8.2.8 Affiliate Transactions. Each of the Loan Parties shall not enter into or carry out any transaction with any Affiliate
of any Loan Party, other than another Loan Party (including purchasing property or services from or selling property or services to any Affiliate of any Loan Party or other Person) unless such transaction is not otherwise prohibited by this
Agreement, is entered into in the ordinary course of business upon fair and reasonable arm's-length terms and conditions and is in accordance with all applicable Law; provided that nothing contained herein shall prohibit the Loan Parties from
intercompany sales of inventory consistent with historical practices.
8.2.9 Subsidiaries, Partnerships and Joint Ventures. Each of the Loan Parties shall not own or
create directly or indirectly any Subsidiaries other than (i) any Subsidiary which has joined this Agreement as a Borrower or Guarantor on the Closing Date; (ii) any Foreign Subsidiary; and (iii) any domestic Subsidiary formed after the Closing
Date which joins this Agreement either as (A) a Borrower by delivering to the Administrative Agent a signed Borrower Joinder or (B) a Guarantor by delivering to the Administrative Agent a signed Guarantor Joinder, and in either case, such
Subsidiary shall also deliver the documents in the forms described in Section 7.1 [First Loans and Letters of Credit] modified as appropriate. Each of the Loan Parties shall not become or agree to become a party to a Joint Venture.
8.2.10 Continuation of or Change in Business. Each of the Loan Parties shall not engage in any business other than as
substantially as conducted and operated by such Loan Party during the present fiscal year and businesses reasonably related thereto, and such Loan Party shall not permit any material change in such
business.
8.2.11 Fiscal Year. The Loan Parties shall not change its fiscal year from a 52/53 week year ending on or about September 30
of each year.
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8.2.13 Changes in Organizational Documents. Each of the Loan Parties shall not amend in any respect its certificate of
incorporation (including any provisions or resolutions relating to Capital Stock), by-laws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement or other organizational documents
if such change would be materially adverse to the Lenders, as determined by the Administrative Agent in its sole discretion, without obtaining the prior written consent of the Required Lenders.
8.2.14 Maximum Net Leverage Ratio. The Loan Parties shall not permit the Net Leverage Ratio to be greater than 3.00 to 1.00.
8.2.15 Minimum Interest Coverage Ratio. The Loan Parties shall not permit the Interest Coverage Ratio to be less than 3.50 to
1.00.
8.2.16 Negative Pledge. No Loan Party shall (a) encumber, pledge, mortgage, grant a security interest in, assign, sell, lease or otherwise dispose of or
transfer, whether by sale, merger, consolidation, liquidation, dissolution or otherwise, any of its property or revenues, whether now owned or hereafter acquired (except as otherwise expressly permitted under this Agreement or the other Loan
Documents), nor (b) enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of such Loan Party to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now
owned or hereafter acquired, to secure the Obligations, other than, in each case (i) this Agreement and the other Loan Documents (ii) with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with a
disposition of assets permitted under this Agreement of all or substantially all of the equity interests or assets of such Subsidiary, (iii) any agreements governing any purchase money Liens or capital lease obligations otherwise permitted hereby
(in which case, any prohibition or limitation shall only be effective against the assets financed thereby), (iv) customary provisions restricting assignment of any licensing agreement (in which a Loan Party is the licensee) with respect to a
contract entered into by a Loan Party in the ordinary course of business and (v) customary provisions restricting subletting, sublicensing or assignment of any intellectual property license or any lease governing any leasehold interests of a Loan
Party.
8.2.17 Sanctions; International Trade, Anti-Money Laundering and other Anti-Corruption Laws. Each Loan Party will not, and will not permit any of its
Subsidiaries to do any of the following, nor permit any of such Loan Party’s directors, officers or employees, or, to such Loan Party’s knowledge, any agents or affiliates acting on its behalf in connection with this
Agreement, to: (a) become a Sanctioned Person; (b) directly or indirectly (through a third party or otherwise), provide, use, or make available the proceeds of any Loan hereunder (i) to fund or facilitate any activities or business of, with, or
for the benefit of any Sanctioned Person, (ii) to fund or facilitate any activities or business of or in any Sanctioned Jurisdiction, or (iii) to act in any manner in violation of, or that could result in a violation by any Person of, any
International Trade Laws, Sanctions, Anti-Money Laundering Laws or Anti-Corruption Laws; (c) in the execution, delivery or performance of this Agreement, or any activities, transactions, services, or any collateral or security interest
contemplated by this Agreement, violate Sanctions; (d) directly or indirectly, repay in whole or in part any Loan hereunder with proceeds derived from investments in or transactions with any Sanctioned Jurisdiction or Sanctioned Person or
otherwise in violation of Sanctions; or (e) do business in or with, or derive any of its income, directly or indirectly, from any Sanctioned Jurisdiction or Sanctioned Person.
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8.3 Reporting Requirements. The Loan Parties will furnish or cause to be furnished to the Administrative Agent and each of the Lenders:
8.3.1 Quarterly Financial Statements. As soon as available and in
any event within forty-five (45) calendar days after the end of each of the first three fiscal quarters in each fiscal year, the financial statements of the Loan Parties and their Subsidiaries, consisting of a
consolidated balance sheet as of the end of such fiscal quarter and related consolidated statements of income, retained earnings and cash flows for the fiscal quarter then ended and the fiscal year through that date, all in reasonable detail
and certified (subject to normal year-end audit adjustments) by the Chief Executive Officer, President, Chief Financial Officer, Director of Global Tax and Treasury or Assistant Treasurer of the Company as having been prepared in accordance
with GAAP, consistently applied, and setting forth in comparative form the respective financial statements for the corresponding date and period in the previous fiscal year.
8.3.2 Annual Financial Statements. As soon as available and in any event within ninety (90) days after the end of each fiscal year of the Loan Parties, the financial statements of the Loan Parties and their Subsidiaries consisting of a consolidated balance sheet as of the
end of such fiscal year, and related consolidated statements of income, retained earnings, stockholders' equity and cash flows for the fiscal year then ended, all in reasonable detail and setting forth in comparative form the financial
statements as of the end of and for the preceding fiscal year, and certified by an independent certified public accountants of nationally recognized standing reasonably satisfactory to the Administrative Agent. The certificate or report of
accountants shall be free of qualifications as to going concern or scope of audit. The Loan Parties shall deliver with such financial statements and certification by their accountants a letter of such accountants to the Administrative
Agent and the Lenders substantially to the effect that, based upon their ordinary and customary examination of the affairs of the Loan Parties, performed in connection with the preparation of such consolidated financial statements, and in
accordance with GAAP, they are not aware of the existence of any condition or event which constitutes an Event of Default or Potential Default or, if they are aware of such condition or event, stating the nature thereof.
8.3.3 Certificate of Borrowers.
Concurrently with the financial statements of the Borrowers furnished to the Administrative Agent and to the Lenders pursuant to Sections 8.3.1 [Quarterly Financial Statements] and 8.3.2 [Annual Financial Statements], a certificate (each a “Compliance Certificate”) of the Borrowers signed by the Chief Executive Officer, President, Chief Financial Officer, Director of Global Tax and Treasury, or Assistant Treasurer of the Borrower Agent, in the
form of Exhibit 8.3.3.
8.3.4.1 Default. Promptly after any officer of any Loan Party has learned of the occurrence of an Event of Default or Potential Default, a certificate signed by an Authorized
Officer setting forth the details of such Event of Default or Potential Default and the action which such Loan Party proposes to take with respect thereto.
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8.3.4.2 Litigation. Promptly after the commencement thereof, notice of all material actions, suits, proceedings or investigations before or by any Official Body or any other
Person against any Loan Party which involve a claim or series of claims in excess of $5,000,000 or which if adversely determined would constitute a Material Adverse Change.
8.3.4.3 Organizational Documents. Within five (5) Business Days of any material amendment to the organizational documents of any Loan Party, a copy of the organizational
documents as so amended.
8.3.4.4 Erroneous Financial Information. Immediately in the event that the Borrowers or any of their accountants conclude or advise that any previously issued financial
statement, audit report or interim review should no longer be relied upon or that disclosure should be made or action should be taken to prevent future reliance, notice in writing setting forth the details thereof and the action which the
Borrowers propose to take with respect thereto.
8.3.4.5 ERISA Event. Immediately upon the occurrence of any ERISA Event, notice in writing setting forth the details thereof and the action which the Borrowers propose to take
with respect thereto.
8.3.4.6 Other Reports. Promptly upon their becoming available to the Borrowers:
(i) Annual Budget. The annual budget and any forecasts or projections of the Borrowers, to be supplied not later than forty-five (45) days after the commencement of the fiscal
year to which any of the foregoing may be applicable,
(ii) Management Letters. Any reports including management letters submitted to the Borrowers by independent accountants in connection with any annual, interim or special audit,
(iii) SEC Reports; Shareholder Communications. Reports, including Forms 10-K, 10-Q and 8-K, registration statements and prospectuses and other shareholder communications, filed by
the Borrowers with the Securities and Exchange Commission, and
(iv) Other Information. Such other reports and information as any of the Lenders may from time to time reasonably request.
8.3.5 Borrowing Base Certificates; Schedules of Accounts, Inventory and Payables. Upon the occurrence and during the continuance of a Springing
Borrowing Base Trigger Event, the Borrowers shall furnish to the Administrative Agent and each of the Lenders by the last day of each month, a borrowing base certificate as of the last day of the immediately preceding month in a form reasonably
acceptable to the Administrative Agent, appropriately completed, executed and delivered by an Authorized Officer, together with a Schedule of Accounts, Schedule of Payables and Schedule of Inventory, in each case, as of the end of the immediately
preceding month.
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8.3.6 Field Exams; Appraisals. If requested by the Administrative Agent at any time in its Permitted Discretion, the Borrowers shall pay for the costs of the Administrative Agent to
conduct a field exam and obtain an appraisal covering the Collateral; provided, however, that the Borrowers shall not be responsible for the expenses of more than one field exam and appraisal of the Administrative Agent and the Lenders
collectively in any fiscal year unless an Event of Default has occurred and is continuing or unless a Springing Borrowing Base Trigger Event has occurred and is continuing. Upon the occurrence and during the continuance of a Springing Borrowing
Base Trigger Event, the Borrowers shall pay for the costs of the Administrative Agent to conduct an additional field exam and obtain an additional appraisal covering the Collateral (which, for purposes of clarity, means that Borrowers may be
required to pay for up to two field exams and appraisals during any fiscal year in which a Springing Borrower Base Trigger Event occurs).
8.3.7 Posting Information. Documents required to be delivered pursuant to Sections 8.3.1, 8.3.2 and 8.3.4.6(iii) (to the extent any such documents are
included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (a) on which the Borrowers post such documents or provide a link thereto on the Borrowers’
website on the internet; or (b) on which such documents are posted on the Borrowers’ behalf on an intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent); provided that the Borrower Agent shall notify the Administrative Agent (by e-mail transmission) of the posting of any such documents and provided further that the Borrower Agent shall e-mail a copy of any
such documents posted to the Administrative Agent.
9.1 Events of Default. An Event of Default shall mean the occurrence or existence of any
one or more of the following events or conditions (whatever the reason therefor and whether voluntary, involuntary or effected by operation of Law):
9.1.1 Payments Under Loan Documents. The Borrowers shall fail to pay (a) any principal of any
Loan (including scheduled installments, mandatory prepayments or the payment due at maturity), Reimbursement Obligation or Letter of Credit or Obligation on the date on which such principal becomes due in accordance with the terms hereof or (b)
any interest on any Loan, Reimbursement Obligation or Letter of Credit Obligation or any other amount owing hereunder or under the other Loan Documents within three (3) Business Days of the date on which such interest or other amount becomes due
in accordance with the terms hereof or thereof.
9.1.2 Breach of Warranty. Any representation or warranty made at any time by any of the Loan Parties herein or by any of
the Loan Parties in any other Loan Document, or in any certificate, other instrument or statement furnished pursuant to the provisions hereof or thereof, shall prove to have been false or misleading in any material respect as of the time it was
made or furnished.
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9.1.3 Sanctions; International Trade, Anti-Money Laundering and Anti-Corruption Laws. Any representation or warranty contained in Section 6.1.16 [Sanctions; International Trade,
Anti-Money Laundering and Anti-Corruption Laws] is or becomes false or misleading at any time.
9.1.4 Breach of Negative Covenants, Visitation Rights or Anti-Corruption Laws, Anti-Money Laundering Laws and International Trade
Laws. Any of the Loan Parties shall default in the observance or performance of any covenant contained in Section 8.1.5 [Visitation Rights], Section 8.1.9 [Sanctions; International Trade, Anti-Money Laundering and Anti-Corruption Laws] or
Section 8.2 [Negative Covenants].
9.1.5 Breach of Other Covenants. Any of the Loan Parties shall default in the observance or performance of any other
covenant, condition or provision hereof or of any other Loan Document and such default shall continue unremedied for a period of twenty (20) Business Days.
9.1.6 Defaults in Other Agreements or Indebtedness. A default or event of default shall occur at any time under the terms
of any agreement involving borrowed money or the extension of credit or any other Indebtedness under which any Loan Party may be obligated as a borrower or guarantor in excess of $5,000,000 in the aggregate, and in any case, such breach, default
or event of default consists of the failure to pay (beyond any period of grace permitted with respect thereto, whether waived or not) any Indebtedness when due (whether at stated maturity, by acceleration or otherwise) or if such breach or
default permits or causes the acceleration of any Indebtedness (whether or not such right shall have been waived) or the termination of any commitment to lend.
9.1.7 Final Judgments or Orders. Any final judgments or orders for the payment of money in
excess of $5,000,000 in the aggregate shall be entered against any Loan Party by a court having jurisdiction in the premises, which judgment is not discharged, vacated, bonded or stayed pending appeal within a period of sixty (60) days from the
date of entry.
9.1.8 Loan Document Unenforceable. Any of the Loan Documents shall cease to be legal, valid and binding agreements
enforceable against the party executing the same or such party's successors and assigns (as permitted under the Loan Documents) in accordance with the respective terms thereof (or any Loan Party shall challenge or contest the validity of such
Loan Document) or shall in any way be terminated (except in accordance with its terms) or become or be declared ineffective or inoperative or cease to give or provide the respective Liens, security interests, rights, titles, interests, remedies,
powers or privileges intended to be created thereby.
9.1.9 Uninsured Losses; Proceedings Against Assets. There shall occur any material uninsured damage to or loss, theft or
destruction of any of the Loan Parties’ personal or real property in excess of $5,000,000 or the Loan Parties’ personal or real property or any other of the Loan Parties' assets are attached, seized, levied upon or subjected to a writ or distress
warrant; or such come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within sixty (60) days thereafter.
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9.1.10 Events Relating to Pension Plans and Multiemployer Plans. An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has
resulted or could reasonably be expected to result in liability of any Borrower or any member of the ERISA Group under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $5,000,000, or any
Borrower or member of the ERISA Group fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan, where the
aggregate amount of unamortized withdrawal liability is in excess of $5,000,000.
9.1.12 Relief Proceedings. A Relief Proceeding shall have been instituted against any Loan Party
and such Relief Proceeding shall remain undismissed or unstayed and in effect for a period of sixty (60) consecutive days or such court shall enter a decree or order granting any of the relief sought in such Relief Proceeding, (ii) any Loan Party
institutes, or takes any action in furtherance of, a Relief Proceeding, or (iii) any Loan Party ceases to be Solvent or admits in writing its inability to pay its debts as they mature.
9.2.1 Events of Default Generally. If any Event of Default specified under Section 9.1 [Events of Default] shall occur and
be continuing, the Lenders and the Administrative Agent shall be under no further obligation to make Loans and the Issuing Lender shall be under no obligation to issue Letters of Credit and the Administrative Agent may, and upon the request of
the Required Lenders shall take any or all of the following actions: (i) declare the commitment of each Lender to make Loans and any obligation of the Issuing Lender to issue, amend or extend Letters of Credit to be terminated, whereupon such
commitments and obligation shall be terminated; (ii) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers; (iii) require the Borrowers to, and the Borrowers shall thereupon, deposit in a
non-interest-bearing account with the Administrative Agent, as Cash Collateral for its Obligations under the Loan Documents, an amount equal to 105% of all Letter of Credit Obligations, and the Borrowers hereby pledge to the Administrative Agent
and the Lenders, and grants to the Administrative Agent and the Lenders a security interest in, all such cash as security for such Obligations; and (iv) exercise on behalf of itself, the Lenders and the Issuing Lender all rights and remedies
available to it, the Lenders and the Issuing Lender under the Loan Documents.
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of Default specified under Section 9.1.12 [Relief
Proceedings] shall occur, or upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of
the Issuing Lender to issue, amend or extend any Letter of Credit shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrowers to
the Lenders hereunder and thereunder shall be immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, and the obligation of the Borrowers to provide Cash Collateral as
specified in clause (iii) of Section 9.2.1 above shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.
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9.2.3 Set-off. If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Lender, and each of
their respective Affiliates and any participant of such Lender or Affiliate which has agreed in writing to be bound by the provisions of Section 5.3 [Sharing of Payments by Lenders] is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing
by such Lender, the Issuing Lender or any such Affiliate or participant to or for the credit or the account of any Loan Party against any and all of the Obligations of such Loan Party now or hereafter existing under this Agreement or any other
Loan Document to such Lender, the Issuing Lender, Affiliate or participant, irrespective of whether or not such Lender, Issuing Lender, Affiliate or participant shall have made any demand under this Agreement or any other Loan Document and
although such Obligations of the Borrowers or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or the Issuing Lender different from the branch or office holding such deposit or obligated on such
Indebtedness, provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the
provisions of Section 2.10 [Defaulting Lenders] and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuance Lenders, and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff The rights of
each Lender, the Issuing Lender and their respective Affiliates and participants under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Lender or their respective
Affiliates and participants may have. Each Lender and the Issuing Lender agrees to notify the Borrowers and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect
the validity of such setoff and application.
9.2.4 Enforcement of Rights and Remedies. Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at Law in connection with such enforcement
shall be instituted and maintained exclusively by, the Administrative Agent in accordance with this Section 9.2 for the benefit of all the Lenders and the Issuing Lender and the other Secured Parties; provided that the foregoing shall not
prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the Issuing Lender or the
Swing Loan Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as the Issuing Lender or Swing Loan Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from
exercising setoff rights in accordance with Section 9.2.3 (subject to the terms of Section 5.3 [Sharing of Payments by Lenders]), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the
pendency of a proceeding relative to any Loan Party under any Insolvency Proceeding; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required
Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to this Section 9.2.4, and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 5.3 [Sharing of Payments by Lenders]), any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
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9.2.5 Application of Proceeds. From and after the date on which the Administrative Agent has taken any action pursuant to Section 9.2.4 [Enforcement of
Rights and Remedies] (or after the Loans have automatically become immediately due and payable and the Letter of Credit Obligations have automatically been required to be Cash Collateralized as specified in this Agreement) and until Payment in
Full, any and all proceeds received on account of the Obligations shall (subject to Sections 2.10 [Defaulting Lenders] and 9.2.1 [Events of Default Generally] be applied as follows:
(i) First, to payment of that portion of the Obligations constituting fees (other than Letter of Credit Fees), indemnities, expenses and other amounts, including attorney fees,
payable to the Administrative Agent in its capacity as such, the Issuing Lender in its capacity as such and the Swing Loan Lender in its capacity as such, ratably among the Administrative Agent, the Issuing Lender and Swing Loan Lender in
proportion to the respective amounts described in this clause First payable to them;
(ii) Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to
the Lenders under the Loan Documents, including attorney fees, ratably among the Lenders in proportion to the respective amounts described in this clause Second payable to them;
(iii) Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans and Reimbursement Obligations and
Ordinary Course Hedge Payments (including any accrued interest thereon), ratably among the Lenders, the Issuing Lender and the applicable Hedge Banks in proportion to the respective amounts described in this clause Third payable to them;
(iv) Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, Reimbursement Obligations, Hedge Termination Value and any other Hedge
Liabilities (including any accrued interest thereon) in respect of any Lender Provided Interest Rate Hedge or Lender Provided Foreign Currency Hedge, and payment obligations then owing under any Other Lender Provided Financial Service Products,
ratably among the Lenders, the Issuing Lender, the applicable Hedge Banks and the applicable Cash Management Banks, in proportion to the respective amounts described in this clause Fourth held by them;
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(v) Fifth, to the Administrative Agent for the account of the Issuing Lender, to Cash Collateralize any undrawn amounts under outstanding Letters of Credit (to the extent not
otherwise cash collateralized pursuant to this Agreement); and
(vi) Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by Law.
Amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as cash collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order specified above.
Notwithstanding anything to the contrary in this Section 9.2.5 [Application of Proceeds], no Swap Obligations of any Non-Qualifying Party shall be paid with amounts received from such Non-Qualifying Party under its
Guaranty Agreement (including sums received as a result of the exercise of remedies with respect to such Guaranty Agreement) if such Swap Obligations would constitute Excluded Hedge Liabilities; provided, however, that to the extent possible
appropriate adjustments shall be made with respect to payments from other Loan Parties that are Eligible Contract Participants with respect to such Swap Obligations to preserve the allocation to Obligations otherwise set forth above in this
Section 9.2.5 [Application of Proceeds].
In addition, notwithstanding the foregoing, Obligations arising under Lender Provided Interest Rate Hedges, Lender Provided Foreign Currency Hedges, and Other Lender Provided Financial Service Products shall be
excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation, as the Administrative Agent may reasonably request, from the applicable Cash
Management Bank or Hedge Bank, as the case may be; provided that, if the Administrative Agent is a Cash Management Bank or a Hedge Bank, such written notice and additional supporting documentation shall not be required. Each Cash Management Bank
or Hedge Bank not a party to the Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of
Section 10 hereof for itself and its Affiliates as if a “Lender” party hereto.
10.1 Appointment and Authority. Each of the Lenders and the Issuing Lender hereby irrevocably appoints PNC to act on its
behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Section 10 are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lender, and no Borrower nor any
other Loan Party shall have rights as a third-party beneficiary of any of such provisions except Section 10.6 [Resignation of Administrative Agent]. It is understood and agreed that the use of the term “agent” herein or in any other Loan
Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as
a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties.
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10.2 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in
its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include
the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for
and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
10.3 Exculpatory Provisions. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Potential Default or Event of Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other
Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided
that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law, including for
the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law;
and
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrowers or any of their Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.1 [Modifications, Amendments or Waivers] and 9.2 [Consequences of Event of Default])
or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Potential
Default or Event of Default unless and until notice describing such Potential Default or Event of Default is given to the Administrative Agent in writing by the Borrowers, a Lender or an Issuing Lender.
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The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth herein or therein or the occurrence of any Potential Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document or (v) the satisfaction of any condition set forth in Section 7 [Conditions of Lending and Issuance of Letters of Credit] or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
10.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine
and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not
incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such
Lender or Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
10.5 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and
powers hereunder or under any other Loan Document by or through any one or more sub‑agents appointed by the Administrative Agent. The Administrative Agent and any such sub‑agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory provisions of this Section 10 shall apply to any such sub‑agent and to the Related Parties of the Administrative Agent and any such sub‑agent, and shall apply to their
respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any
sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
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10.6 Resignation of Administrative Agent. The Administrative Agent may at any time give
notice of its resignation to the Lenders, the Issuing Lender and the Borrowers. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with approval from the Borrowers (so long as no Potential Default or Event
of Default has occurred and is continuing), to appoint a successor, such approval not to be unreasonably withheld or delayed. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of its resignation (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to)
on behalf of the Lenders and the Issuing Lender, appoint a successor Administrative Agent, provided that in no event shall any such successor Administrative Agent be a Defaulting Lender. Whether or not a successor has been appointed, such
resignation shall become effective in accordance with such notice on the Resignation Effective Date.
If the Person serving as the Administrative Agent is a Defaulting Lender pursuant to clause (iv) of the definition thereof, the Required Lenders may, to the extent permitted by applicable Law, by
notice in writing to the Borrowers and such Person, remove such Person as Administrative Agent, and, in consultation with the Borrowers, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective
in accordance with such notice on the Removal Effective Date.
With effect from the Resignation Effective Date or the Removal Effective Date (as applicable), (a) the retiring or removed Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Lender under any of the Loan Documents, the retiring or removed
Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments,
communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Lender directly, until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section 10.6 [Resignation of Administrative Agent]. Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent
shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section 10.6 [Resignation of Administrative Agent]). The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent's resignation or removal
hereunder and under the other Loan Documents, the provisions of this Section 10 [The Administrative Agent] and Section 11.3 [Expenses; Indemnity; Damage Waiver] shall continue in effect for the benefit of such retiring or removed Administrative
Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.
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If PNC resigns as Administrative Agent under this Section 10.6, PNC shall also resign as an Issuing Lender. Upon the appointment of a successor Administrative Agent hereunder, such successor
shall (i) succeed to all of the rights, powers, privileges and duties of PNC as the retiring Issuing Lender and Administrative Agent and PNC shall be discharged from all of its respective duties and obligations as Issuing Lender and
Administrative Agent under the Loan Documents, and (ii) issue letters of credit in substitution for the Letters of Credit issued by PNC, if any, outstanding at the time of such succession or make other arrangement satisfactory to PNC to
effectively assume the obligations of PNC with respect to such Letters of Credit.
10.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the Issuing Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender and the Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information
as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or
thereunder. Each Lender and each Issuing Lender represents and warrants that (i) the Loan Documents set forth the terms of a commercial lending facility and certain other facilities as set forth herein and (ii) it is engaged in making, acquiring
or holding commercial loans, issuing or participating in letters of credit or providing other similar facilities in the ordinary course and is entering into this Agreement as a Lender or Issuing Lender for the purpose of making, acquiring or
holding commercial loans, issuing or participating in letters of credit and providing other facilities as set forth herein and not for the purpose of purchasing, acquiring or holding any other type of financial instrument, and each Lender and
each Issuing Lender agrees not to assert a claim in contravention of the foregoing. Each Lender and each Issuing Lender represents and warrants that it is sophisticated with respect to decisions to make, acquire or hold commercial loans, issue or
participate in letters of credit and to provide other facilities set forth herein, as may be applicable to such Lender or such Issuing Lender, and either it, or the Person exercising discretion in making its decision to make, acquire or hold such
commercial loans, issue or participate in letters of credit or to provide such other facilities, is experienced in making, acquiring or holding commercial loans, issuing or participating in letters of credit or providing such other facilities.
10.8 No Other Duties, etc.; No Fiduciary Responsibility. Anything herein to the contrary notwithstanding, none of the Sole
Lead Arranger and Sole Bookrunner listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a
Lender or the Issuing Lender hereunder. Each of the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for the Borrowers or any of their Affiliates, or any other Person.
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10.9 Administrative Agent’s Fee. The Borrowers shall pay to the Administrative Agent a
nonrefundable fee (the “Administrative Agent’s Fee”) under the terms of a letter dated October 29, 2025 (the “Administrative Agent’s Letter”) between the Borrowers
and Administrative Agent, as amended from time to time. For the avoidance of doubt, the Administrative Agent’s Letter supersedes all prior fee letters between the Borrowers and the Administrative Agent.
10.10 Collateral and Guaranty Matters. Each of the Secured Parties irrevocably authorizes the Administrative Agent, at its
option and in its discretion, (i) to release any Guarantor from its obligations under the Guaranty Agreement if the ownership interests in such Guarantor are sold or otherwise disposed of or transferred to persons other than Loan Parties or
Subsidiaries of the Loan Parties in a transaction permitted under Section 8.2.7 [Dispositions of Assets or Subsidiaries] or Section 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions], and (ii) to release any Lien on any property granted
to or held by the Administrative Agent under any Loan Document (y) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted under the Loan Documents, or
(z) subject to Section 11.1 [Modifications; Amendment or Waivers], if approved, authorized or ratified in writing by the Required Lenders. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the
Administrative Agent’s authority to release its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty Agreement pursuant to this Section 10.10. The Administrative Agent shall not
be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or
any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.
10.11 No Reliance on Administrative Agent’s Customer Identification Program. Each Lender
acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on the Administrative Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or
other obligations required or imposed under or pursuant to the USA PATRIOT Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP
Regulations”), or any other Anti-Money Laundering Law, any Anti-Corruption Law, or any other International Trade Law, including any programs involving any of the following items relating to or in connection with any of the Loan Parties,
their Affiliates or their agents, the Loan Documents or the transactions hereunder or contemplated hereby: (i) any identity verification procedures, (ii) any recordkeeping, (iii) comparisons with government lists, (iv) customer notices or (v)
other procedures required under the CIP Regulations or such other Laws.
(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the
date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its Affiliates and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that at least one of the
following is and will be true:
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(i) such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s
entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments or this Agreement,
(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE
91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance
into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,
(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in,
administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the
requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or
(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.
(b) In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty
and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person
became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and the Lead Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the
benefit of any Borrower or any other Loan Party that the Administrative Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender's entrance into, participation in, administration of and performance of the Loans,
the Letters of Credit, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto).
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10.13 Erroneous Payments
(a) If the Administrative Agent notifies a Lender, Issuing Lender or Secured Party, or any Person who has received funds on behalf of a Lender, Issuing Lender or Secured Party (any
such Lender, Issuing Lender, Secured Party or other recipient, a “Payment Recipient”) that the Administrative Agent has determined in its sole discretion (whether or not after receipt of any notice
under immediately succeeding clause (b)) that any funds received by such Payment Recipient from the Administrative Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by,
such Payment Recipient (whether or not known to such Lender, Issuing Lender, Secured Party or other Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees,
distribution or otherwise, individually and collectively, an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times
remain the property of the Administrative Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of the Administrative Agent, and such Lender, Issuing Lender or Secured Party shall (or, with respect to any
Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than two Business Days thereafter, return to the Administrative Agent the amount of any such Erroneous Payment (or
portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received
by such Payment Recipient to the date such amount is repaid to the Administrative Agent in same day funds at the greater of the Effective Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation from time to time in effect. A notice of the Administrative Agent to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error.
(b) Without limiting immediately preceding clause (a), each Lender, Issuing Lender or Secured Party, or any Person who has received funds on behalf of a Lender, Issuing Lender
or Secured Party, hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Administrative Agent (or
any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such
payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates), or (z) that such Lender, Issuing Lender or Secured Party,
or other such recipient, otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part) in each case:
(i) (A) in the case of immediately preceding clauses (x) or (y), an error shall be presumed to have been made (absent written confirmation from the Administrative
Agent to the contrary) or (B) an error has been made (in the case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment; and
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(ii) such Lender, Issuing Lender or Secured Party shall (and shall cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one
Business Day of its knowledge of such error) notify the Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Administrative Agent pursuant to
this Section 10.13(b).
(c) Each Lender, Issuing Lender or Secured Party hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to such Lender, Issuing
Lender or Secured Party under any Loan Document, or otherwise payable or distributable by the Administrative Agent to such Lender, Issuing Lender or Secured Party from any source, against any amount due to the Administrative Agent under
immediately preceding clause (a) or under the indemnification provisions of this Agreement.
(d) In the event that an Erroneous Payment (or portion thereof) is not recovered by the Administrative Agent for any reason, after demand therefor by the Administrative Agent in
accordance with immediately preceding clause (a), from any Lender or Issuing Lender that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion
thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon the Administrative Agent’s notice to such Lender or Issuing Lender at any time, (i) such
Lender or Issuing Lender shall be deemed to have assigned its Loans (but not its Commitments) of the relevant Class with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Class”)
in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Administrative Agent may specify) (such assignment of the Loans (but not Commitments) of the Erroneous Payment Impacted Class, the “Erroneous Payment Deficiency Assignment”) at par plus any accrued and unpaid interest (with the assignment fee to be waived by the Administrative Agent in such instance), and is hereby (together with the
Borrower) deemed to execute and deliver an Assignment and Assumption with respect to such Erroneous Payment Deficiency Assignment, and such Lender or Issuing Lender shall deliver any Notes evidencing such Loans to the Borrower or the
Administrative Agent, (ii) the Administrative Agent as the assignee Lender shall be deemed to acquire the Erroneous Payment Deficiency Assignment, (iii) upon such deemed acquisition, the Administrative Agent as the assignee Lender shall
become a Lender or Issuing Lender, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Lender or assigning Issuing Lender shall cease to be a Lender or Issuing Lender, as applicable,
hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to
such assigning Lender or assigning Issuing Lender and (iv) the Administrative Agent may reflect in the Register its ownership interest in the Loans subject to the Erroneous Payment Deficiency Assignment. The Administrative Agent may, in its
discretion, sell any Loans acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Lender or Issuing Lender shall be
reduced by the net proceeds of the sale of such Loan (or portion thereof), and the Administrative Agent shall retain all other rights, remedies and claims against such Lender or Issuing Lender (and/or against any recipient that receives funds
on its respective behalf). For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Lender or Issuing Lender and such Commitments shall remain available in accordance with the terms of this
Agreement. In addition, each party hereto agrees that, except to the extent that the Administrative Agent has sold a Loan (or portion thereof) acquired pursuant to an Erroneous Payment Deficiency Assignment, and irrespective of whether the
Administrative Agent may be equitably subrogated, the Administrative Agent shall be contractually subrogated to all the rights and interests of the applicable Lender, Issuing Lender or Secured Party under the Loan Documents with respect to
each Erroneous Payment Return Deficiency (the “Erroneous Payment Subrogation Rights”).
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(e) The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrowers or any other Loan Party,
except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent from the Borrowers or any other Loan Party for the
purpose of making such Erroneous Payment.
(f) To the extent permitted by applicable Law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim,
counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Erroneous Payment received, including without limitation waiver of any defense based
on “discharge for value” or any similar doctrine.
(g) Each party’s obligations, agreements and waivers under this Section 10.13 shall survive the resignation or replacement of the Administrative Agent, the termination of the
Commitments and/or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Loan Document.
10.14 Lender Provided Interest Rate Hedges, Lender Provided Foreign Currency Hedges and Other Lender Provided Financial Service Products. Except as otherwise expressly specified
herein, no Cash Management Bank or Hedge Bank that obtains the benefits of Section 9.2.5 [Application of Proceeds], the Guaranty Agreement or any Collateral by virtue of the provisions hereof or of the Guaranty Agreement or any Loan Document
shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other
than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Section 10 to the contrary, the Administrative Agent shall not be required to verify
the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Lender Provided Interest Rate Hedges, Lender Provided Foreign Currency Hedges and/or Other Lender Provided Financial Service
Products unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case
may be.
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10.15 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan
Party, the Administrative Agent (irrespective of whether the principal of any Loan or Letter of Credit Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Letter of Credit Obligations and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lender and the Administrative Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the Issuing Lender and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lender and the Administrative Agent under Sections 2.9.2
[Letter of Credit Fees] and 11.3 [Expenses; Indemnity; Damage Waiver]) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the Issuing Lender to make such
payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lender, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 11.3 [Expenses; Indemnity; Damage Waiver].
11. MISCELLANEOUS
11.1 Modifications, Amendments or Waivers. With the written consent of the Required Lenders (or as expressly provided by Section 4.4.4 and the last paragraph of this Section
11.1), the Administrative Agent, acting on behalf of all the Lenders, and the Borrowers, on behalf of the Loan Parties, may from time to time enter into written agreements amending or changing any provision of this Agreement or any other Loan
Document or the rights of the Lenders or the Loan Parties hereunder or thereunder, or may grant written waivers or consents hereunder or thereunder. Any such agreement, waiver or consent made with such written consent shall be effective to
bind all the Lenders and the Loan Parties; provided, that no such agreement, waiver or consent may be made which will:
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11.1.1 Increase of Commitment. Increase the amount of the Revolving Credit Commitment of any Lender hereunder without the consent of such Lender;
11.1.2 Extension of Payment; Reduction of Principal, Interest or Fees; Modification of Terms of Payment. Whether or not any Loans are outstanding, extend the Expiration Date or
the time for payment of principal or interest of any Loan (excluding the due date of any mandatory prepayment of a Loan), the Commitment Fee or any other fee payable to any Lender, or reduce the principal amount of or the rate of interest
borne by any Loan (other than as a result of waiving the applicability of any post-default increase in interest rates) or reduce the Commitment Fee or any other fee payable to any Lender, without the consent of each Lender directly affected
thereby (provided that any amendment or modification of defined terms used in the financial covenants of this Agreement shall not constitute a reduction in the stated rate of interest or fees for purposes of this Section 11.1.2);
11.1.3 Release of Collateral or Guarantor; Subordination of Obligations or Collateral. Except as permitted by Section 8.2.7 [Dispositions of Assets or Subsidiaries] or Section
10.10 [Collateral and Guaranty Matters], (i) release all or substantially all of the Collateral or release all or substantially all the value of the Guarantors from their Obligations under the Guaranty Agreement, in each case without the
consent of all Lenders (other than Defaulting Lenders) or (ii) (y) subordinate, or have the effect of subordinating, the Obligations hereunder to any other Indebtedness, or (z) subordinate, or have the effect of subordinating, the Liens
securing the Obligations to Liens securing any other Indebtedness, in each case without the prior consent of each Lender directly affected thereby; or
11.1.4 Miscellaneous. Amend Section 5.2 [Pro Rata Treatment of Lenders], Section 10.3 [Exculpatory Provisions], Section 5.3 [Sharing of Payments by Lenders], Section 9.2.5
[Application of Proceeds] or this Section 11.1, alter any provision regarding the pro rata treatment of the Lenders or requiring all Lenders to authorize the taking of any action or reduce any percentage specified in the definition of
“Required Lenders”, in each case without the consent of all of the Lenders (other than Defaulting Lenders); provided that (i) no agreement, waiver or consent which would modify the interests, rights or obligations of the
Administrative Agent, the Issuing Lender, or the Swing Loan Lender may be made without the written consent of the Administrative Agent, the Issuing Lender or the Swing Loan Lender, as applicable, and (ii) the Administrative Agent’s Letter may
be amended, or the rights or privileges thereunder waived, in a writing executed only by the parties thereto, and provided, further that, if in connection with any proposed waiver, amendment or modification referred to in Sections
11.1.1 through 11.1.4 above, the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained (each a “Non-Consenting Lender”),
then the Borrowers shall have the right to replace any such Non-Consenting Lender with one or more replacement Lenders pursuant to Section 5.13 [Replacement of a Lender].
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or
consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not
be increased or extended without the consent of such Lender, and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately
adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.
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In addition, notwithstanding the foregoing, (a) with the consent of the Borrowers, the Administrative Agent may amend, modify or supplement any Loan Document without the consent of any Lender
or the Required Lenders in order to correct or cure any ambiguity, inconsistency or defect or correct any typographical or ministerial error in any Loan Document (provided that any such amendment, modification or supplement shall not be
materially adverse to the interests of the Lenders taken as a whole), (b) without the consent of any Lender or the Borrowers, within a reasonable time after (i) the effective date of any increase or addition to, extension of or decrease from,
the Revolving Commitment Amount, or (ii) any assignment by any Lender of some or all of its Revolving Commitment Amount, the Administrative Agent shall, and is hereby authorized to, revise Schedule 1.1(B) to reflect such change,
whereupon such revised Schedule 1.1(B) shall replace the old Schedule 1.1(B) and become part of this Agreement, and (c) with the consent of the Borrowers, the Administrative Agent may amend or amend and restate this Agreement
and the other Loan Documents without the consent of any Lender, if (i) upon giving effect to such amendment or amendment and restatement, such Lender shall no longer be a party to this Agreement (as so amended or amended and restated), (ii)
the Commitments of such lender shall have terminated, (iii) such Lender shall have no other commitment or other obligation hereunder, and (iv) such Lender shall have been paid in full all principal, interest and other amounts owing to it or
accrued for its account under this Agreement and the other Loan Documents.
11.2 No Implied Waivers; Cumulative Remedies. No course of dealing and no delay or failure of the Administrative Agent or any Lender in exercising any right, power, remedy or
privilege under this Agreement or any other Loan Document shall affect any other or future exercise thereof or operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any further exercise thereof or of any other
right, power, remedy or privilege. The enumeration of the rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent and the
Lenders of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that
may now or hereafter exist at law or in equity or by suit or otherwise. No reasonable delay or failure to take action on the part of the Administrative Agent or any Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or shall be construed to be a waiver of any Event of
Default.
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11.3 Expenses; Indemnity; Damage Waiver.
11.3.1 Costs and Expenses. The Borrowers shall pay (i) all out‑of‑pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent), and shall pay all fees and time charges and disbursements for attorneys who may be employees of the Administrative Agent, in connection with the syndication of the credit facilities
provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all out‑of‑pocket expenses incurred by the Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder, (iii) all out‑of‑pocket expenses incurred by the Administrative Agent, any Lender or the Issuing Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the Issuing
Lender), and shall pay all fees and time charges for attorneys who may be employees of the Administrative Agent, any Lender or the Issuing Lender, in connection with the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out‑of‑pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit, and (iv) all reasonable out-of-pocket expenses of the Administrative Agent's regular employees and agents engaged periodically to perform audits of the Loan Parties'
books, records and business properties.
11.3.2 Indemnification by the Borrowers. The Borrowers shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from (and shall reimburse each Indemnitee as the same are incurred), any
and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and
disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrowers or any other Loan Party, or any affiliate of any such party ) other than
such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the
performance or nonperformance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use
of the proceeds therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) breach of representations, warranties or covenants of the Borrowers under the Loan Documents, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, including any such
items or losses relating to or arising under Environmental Laws or pertaining to environmental matters, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrowers or any other Loan Party or any
affiliate of any such party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee, (y) result from a claim brought by the Borrowers
or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrowers or such Loan Party has obtained a final and nonappealable judgment in its
favor on such claim as determined by a court of competent jurisdiction, or (z) result from a claim not involving an act or omission of the Borrowers and that is brought by an Indemnitee against another Indemnitee (other than against the
arranger or the Administrative Agent in their capacities as such). This Section 11.3.2 [Indemnification by the Borrowers] shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, liabilities or
related expenses arising from any non-Tax claim.
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11.3.3 Reimbursement by Lenders. To the extent that the Borrowers for any reason fail to indefeasibly pay any amount required under Sections 11.3.1 [Costs and Expenses] or 11.3.2
[Indemnification by the Borrowers] to be paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Lender, the Swing Loan Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the
Administrative Agent (or any such sub-agent), such Issuing Lender, such Swing Loan Lender or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought based on each Lender’s Ratable Share at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the Issuing Lender or the Swing Loan Lender in its capacity as such, or against any Related
Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), Issuing Lender or the Swing Loan Lender in connection with such capacity.
11.3.4 Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, no Borrower shall assert, and each Borrower hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in Section 11.3.2 [Indemnification by Borrowers] shall
be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement
or the other Loan Documents or the transactions contemplated hereby or thereby.
11.3.5 Payments. All amounts due under this Section shall be payable not later than ten (10) days after demand therefor.
11.3.6 Survival. Each party’s obligations under this Section 11.3 shall survive the termination of the Loan Documents and payment of the obligations hereunder.
11.4 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be due on a day which is not a Business Day such payment shall be due on the next Business Day
(except as provided in Section 4.2 [Interest Periods]) and such extension of time shall be included in computing interest and fees, except that the Loans shall be due on the Business Day preceding the Expiration Date if the Expiration Date is
not a Business Day. Whenever any payment or action to be made or taken hereunder (other than payment of the Loans) shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or taken on the next
following Business Day, and such extension of time shall not be included in computing interest or fees, if any, in connection with such payment or action.
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11.5 Notices; Effectiveness; Electronic Communication.
11.5.1 Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Section 11.5.2 [Electronic
Communications]), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier (i) if to a Lender, to it
at its address set forth in its Administrative Questionnaire, or (ii) if to any other Person, to it at its address set forth on Schedule 1.1(B).
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through
electronic communications to the extent provided in Section 11.5.2 [Electronic Communications], shall be effective as provided in such Section.
11.5.2 Electronic Communications. Notices and other communications to the Lenders and the Issuing Lender hereunder may be delivered or furnished by electronic communication
(including e‑mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or the Issuing Lender if such Lender or the Issuing
Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Section by electronic communication. The Administrative Agent may, in its discretion, or the Borrowers may, in their
discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or
communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such
as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such
notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both
clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next
business day for the recipient.
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11.5.3 Change of Address, Etc. Any party hereto may change its address, e‑mail address or facsimile number for notices and other communications hereunder by notice to the other
parties hereto.
11.5.4 Platform. The Borrowers and each Loan Party agree that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to
the Issuing Lender and the other Lenders by posting the Communications on the Platform. The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly
disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of
third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrowers or the other Loan Parties, any Lender or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special,
incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrowers’, any Loan Party’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrowers or any Loan Party pursuant to any Loan Document or
the transactions contemplated therein which is distributed to the Administrative Agent, any Lender or any Issuing Lender by means of electronic communications pursuant to this Section, including through the Platform.
11.6 Severability. The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part
in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the
remaining provisions hereof in any jurisdiction. Without limiting the foregoing provisions of this Section, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by
Debtor Relief Laws, as determined in good faith by the Administrative Agent, the Issuing Lender or the Swing Loan Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.
11.7 Duration; Survival. All representations and warranties of the Loan Parties contained herein or made in connection herewith shall survive the execution and delivery of this
Agreement, the completion of the transactions hereunder and Payment In Full. All covenants and agreements of the Borrowers contained herein relating to the payment of principal, interest, premiums, additional compensation or expenses and
indemnification, including those set forth in the Notes, Section 5 [Payments] and Section 11.3 [Expenses; Indemnity; Damage Waiver], shall survive Payment In Full. All other covenants and agreements of the Loan Parties shall continue in full
force and effect from and after the date hereof and until Payment In Full.
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11.8 Successors and Assigns.
11.8.1 Successors and Assigns Generally. The provisions of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors
and assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder (including, in each case, by way of an LLC Division) without the prior written consent of the Administrative
Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 11.8.2 [Assignments by Lenders], (ii) by way of
participation in accordance with the provisions of Section 11.8.4 [Participations], or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.8.5 [Certain Pledges; Successors and Assigns
Generally] (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent provided in Section 11.8.4 [Participations] and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
11.8.2 Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender,
an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in clause (i)(A) of this Section 11.8.2, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the
applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption Agreement with respect to such
assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption Agreement, as of the Trade Date) shall not be less than $5,000,000, in the case of any assignment in respect of the
Revolving Credit Commitment of the assigning Lender, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrowers otherwise consent (each such consent not to be unreasonably
withheld or delayed).
(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this
Agreement with respect to the Loan or the Commitment assigned.
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(iii) Required Consents. No consent shall be required for any assignment except for the consent of the Administrative Agent (which shall not be unreasonably withheld or
delayed and shall not be required for any assignment to a Lender, an Affiliate of a Lender or an Approved Fund) and:
(A) the consent of the Borrowers (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time
of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrowers shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to
the Administrative Agent within five (5) Business Days after having received notice thereof; and
(B) the consent of the Issuing Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to
participate in exposure under one or more Letters of Credit (whether or not then outstanding).
(iv) Assignment and Assumption Agreement. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption Agreement, together
with a processing and recordation fee of $3,500, and the assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Certain Persons. No such assignment shall be made (A) to any Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) to any Defaulting
Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof.
(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit
of, a natural Person.
(vii) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless
and until, in addition to the other conditions thereto specified herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate
(which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrowers and the Administrative Agent, the applicable pro rata share
of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting
Lender to the Administrative Agent, the Issuing Lender, the Swing Loan Lender and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in
Letters of Credit and Swing Loans in accordance with its Ratable Share. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law
without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
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(viii) Effectiveness; Release. Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 11.8.3 [Register], from and after the effective date
specified in each Assignment and Assumption Agreement, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption Agreement, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption Agreement, be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption Agreement covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 4.4 [Rate
Unascertainable; Etc.], 5.8 [Increased Costs], and 11.3 [Expenses, Indemnity; Damage Waiver] with respect to facts and circumstances occurring prior to the effective date of such assignment; provided,
that except to the extent otherwise expressly agreed by the affected parties, no assignment by a 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. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 11.8.2 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with Section 11.8.4 [Participations].
11.8.3 Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain a copy of each Assignment and Assumption Agreement delivered
to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
11.8.4 Participations. Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a
natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, or the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the
Lenders, and the Issuing Lender shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the
indemnity under Section 11.3 [Expenses; Indemnity; Damage Waiver] with respect to any payments made by such Lender to its Participant(s).
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Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree (other than as is already provided
for herein) to any amendment, modification or waiver with respect to Sections 11.1.1 [Increase of Commitment], 11.1.2 [Extension of Payment, Etc.], or 11.1.3 [Release of Guarantor]) that affects such
Participant. The Borrowers agree that each Participant shall be entitled to the benefits of Sections 4.4 [Rate Unascertainable, Etc.], 5.8[Increased Costs], 5.10 [Indemnity] and 5.9 [Taxes] (subject to the requirements and limitations
therein, including the requirements under Section 5.9.7 [Status of Lenders] (it being understood that the documentation required under Section 5.9.7 [Status of Lenders] shall be delivered to the participating Lender)) to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to Section 11.8.2 [Assignments by Lenders]; provided that such Participant (A) agrees to be subject to the provisions of Section 5.13 [Replacement of a Lender] and
Section 5.14 [Designation of a Different Lending Office] as if it were an assignee under Section 11.8.2 [Assignments by Lenders]; and (B) shall not be entitled to receive any greater payment under Sections 5.8 [Increased Costs] or 5.9
[Taxes], with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant
acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrowers' request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 5.13 [Replacement
of a Lender] and Section 5.14 [Designation of Different Lending Office] with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.2.3 [Set-off] as though it were a Lender; provided that such Participant agrees to be subject to Section 5.3 [Sharing of Payments by Lenders] as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated
interest) of each Participant's interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose
all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any commitments, loans, letters of credit or its other obligations under any Loan Document)
to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
11.8.5 Certain Pledges; Successors and Assigns Generally. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement
to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
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11.8.6 Cashless Settlement. Notwithstanding anything to the contrary contained in this Agreement, any Lender may exchange, continue or rollover all or a portion of its Loans in
connection with any refinancing, extension, loan modification or similar transaction permitted by the terms of this Agreement, pursuant to a cashless settlement mechanism approved by the Borrowers, the Administrative Agent and such Lender.
11.8.7 Arrangers/Bookrunners. Notwithstanding anything to the contrary contained in this Agreement, the name of any arranger and/or bookrunner listed on the cover page of this
Agreement may be changed by the Administrative Agent to the name of any Lender or Lender’s broker-dealer Affiliate, upon written request to the Administrative Agent by any such arranger and/or bookrunner and the applicable Lender or Lender’s
broker-deal Affiliate.
11.9 Confidentiality.
11.9.1 General. Each of the Administrative Agent, the Lenders and the Issuing Lender agree to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (i) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (ii) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association
of Insurance Commissioners), (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under
any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those
of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement or (B) any actual or prospective party (or its Related Parties) to any swap,
derivative or other transaction under which payments are to be made by reference to the Borrowers and their obligations, this Agreement or payments hereunder (vii) with the consent of the Borrowers or (viii) to the extent such Information (Y)
becomes publicly available other than as a result of a breach of this Section or (Z) becomes available to the Administrative Agent, any Lender, the Issuing Lender or any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrowers or the other Loan Parties.
For purposes of this Section, “Information” means all information received from the Borrowers or any of their Subsidiaries in connection with the
transactions contemplated by this Agreement and the other Loan Documents relating to the Borrowers or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative
Agent, any Lender or any Issuing Lender on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries. Any Person required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
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For the avoidance of doubt, nothing in this Section shall prohibit any Person from voluntarily communicating, disclosing or providing information within the scope of the confidentiality
provisions of this Section regarding suspected violations of laws, rules, or regulations to a governmental, regulatory or self-regulatory organization without any notification to any Person.
11.9.2 Sharing Information With Affiliates of the Lenders. Each Loan Party acknowledges that from time to time financial advisory, investment banking and other services may be
offered or provided to the Borrowers or one or more of its Affiliates (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and each of the Loan Parties hereby authorizes
each Lender to share any information delivered to such Lender by such Loan Party and its Subsidiaries pursuant to this Agreement to any such Subsidiary or Affiliate subject to the provisions of Section 11.9.1 [General]. Each Loan Party
consents to the publication by the Administrative Agent or any Lender of customary advertising material relating to the transactions contemplated hereby using the name, product, photographs, logo or trademark of such Loan Party. In addition,
the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the agents and
the Lenders in connection with the administration of this Agreement, the other Loan Documents and the Commitments.
11.10 Counterparts; Integration; Effectiveness; Electronic Execution.
11.10.1 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent,
constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof including any prior
confidentiality agreements and commitments. Except as provided in Section 7 [Conditions Of Lending And Issuance Of Letters Of Credit], this Agreement shall become effective when it shall have been executed by the Administrative Agent and
when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy
or e‑mail shall be effective as delivery of a manually executed counterpart of this Agreement.
11.10.2 Electronic Execution. The words “execution,” “signed,” “signature,” and words of like import in any Loan Document shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state Laws based on the Uniform Electronic
Transactions Act.
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11.11 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
11.11.1 Governing Law. This Agreement shall be deemed to be a contract under the Laws of the State of New York without regard to its conflict of laws principles. Each standby
Letter of Credit issued under this Agreement shall be subject either to the rules of the UCP or the rules of the ISP, as determined by the Issuing Lender, and each trade Letter of Credit shall be subject to UCP, and in each case to the extent
not inconsistent therewith, the Laws of the State of New York without regard to its conflict of laws principles.
11.11.2 SUBMISSION TO JURISDICTION. EACH BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING LENDER
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWERS OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
11.11.3 WAIVER OF VENUE. EACH BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN THIS SECTION 11.11. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND AGREES NOT ASSERT ANY SUCH DEFENSE.
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11.11.4 SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.5 [NOTICES; EFFECTIVENESS; ELECTRONIC
COMMUNICATION]. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
11.11.5 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, ADMINISTRATIVE AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
11.12 USA PATRIOT Act Notice. Each Lender that is subject to the USA PATRIOT Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Loan
Parties that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of Loan Parties and other information
that will allow such Lender or Administrative Agent, as applicable, to identify the Loan Parties in accordance with the USA PATRIOT Act. Each Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all
documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations including the USA
Patriot Act.
11.13 Borrower Agent. Each of the Borrowers hereby irrevocably appoints the Company as its
agent (the “Borrower Agent”) for purposes of requesting, continuing and converting Loans (including all elections of interest rates and
currencies), for delivering notices as to prepayments and commitment reductions and for providing consents pursuant to clauses (i) and (iii) of Section 11.8.2 [Assignments by Lenders]. The Administrative Agent shall be entitled to rely in
such matters on all communications delivered by the Borrower Agent as being delivered on behalf of all Borrowers.
11.14 Joint and Several Obligations 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 Lenders
under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of each other Borrower to accept joint and several liability for the Obligations under the Loan Documents.
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(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 any other
Borrower, with respect to the payment and performance of all of the Obligations under the Loan Documents, it being the intention of the parties hereto that all the Obligations under the Loan Documents 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 under the Loan Documents as and when due or to perform any of the
Obligations under the Loan Documents in accordance with the terms thereof, then in each such event any other Borrower will make such payment with respect to, or perform, such Obligation.
(d) The Obligations of each Borrower under the provisions of this Section constitute the full recourse obligations of such Borrower enforceable against each Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement or the other Loan Documents or any other circumstance whatsoever as to any other Borrower.
119
(e) To the extent permitted by applicable Law, each Borrower hereby waives promptness, diligence, presentment, demand, protest, notice of acceptance of its joint and several
liability, notice of occurrence of any Potential Default or Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by the Administrative Agent or any Lender or under or in
respect of any of the Obligations hereunder, any requirement of diligence in connection with this Agreement and the other Loan Documents. To the extent permitted by applicable Law, each Borrower hereby waives all defenses which may be
available by virtue of any valuation, stay, moratorium Law or other similar Law now or hereafter in effect, any right to require the marshaling of assets of the Borrowers and any other entity or Person primarily or secondarily liable with
respect to any of the Obligations, and all suretyship defenses generally. Each Borrower hereby assents to, and to the extent permitted by applicable Law, waives notice of, any extension or postponement of the time for the payment, or place
or manner for payment, compromise, refinancing, consolidation or renewals of any of the Obligations hereunder, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by the Administrative Agent or
any Lender 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 and the other Loan Documents, any and all other indulgences
whatsoever by the Administrative Agent or any Lender in respect of any of the Obligations hereunder, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of such Obligations or
the addition, substitution or release, in whole or in part, of any Borrower or any other entity or Person primarily or secondarily liable for any Obligation Such Borrower further agrees that, to the extent permitted by applicable Law, its
Obligations shall not be released or discharged, in whole or in part, or otherwise affected by the adequacy of any rights which the Administrative Agent or any Lender may have against any collateral or other means of obtaining repayment of
any of the Obligations, the impairment of any collateral securing the Obligations, including, without limitation, the failure to protect or preserve any rights which the Administrative Agent or any Lender may have in such collateral or the
substitution, exchange, surrender, release, loss or destruction of any such collateral, any other act or omission which might in any manner or to any extent vary the risk of such Borrower, or otherwise operate as a release or discharge of
such Borrower, all of which may be done without notice to such Borrower. If for any reason any Borrower has no legal existence or is under no legal obligation to discharge any of the Obligations hereunder, or if any of the Obligations
hereunder have become unrecoverable from any Borrower by reason of any other Borrower’s insolvency, bankruptcy or reorganization or by other operation of law or for any reason, this Agreement and the other Loan Documents to which it is a
party shall nevertheless be binding on such Borrower to the same extent as if such Borrower at all times had been the sole obligor on such Obligations. Without limiting the generality of the foregoing, each Borrower (if more than one)
assents to any other action or delay in acting or failure to act on the part of the Administrative Agent or any Lender which might, but for the provisions of this Section, afford grounds for terminating, discharging or relieving such
Borrower, in whole or in part, from any of its obligations under this Section, it being the intention of Borrowers that, so long as any of the Obligations hereunder remain unsatisfied, the obligations of such Borrower under this Section shall
not be discharged except by performance and then only to the extent of such performance. The Obligations of each Borrower under this Section shall not be diminished or rendered unenforceable by any winding up, reorganization, amalgamation,
arrangement, liquidation, reconstruction or similar proceeding with respect to any reconstruction or similar proceeding with respect to any other Borrower, the Administrative Agent or any Lender. The joint and several liability of each
Borrower hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, ownership, membership, constitution or place of formation of any Borrower, the
Administrative Agent or any Lender. Each Borrower acknowledges and confirms that it has established its own adequate means of obtaining from each other Borrower on a continuing basis all information desired by such Borrower concerning the
financial condition of each other Borrower and that each such Borrower will look to each other Borrower and not to the Administrative Agent or any Lender for such Borrower to keep adequately informed of changes in each of the other Borrower’s
respective financial conditions.
(f) The provisions of this Section are made for the benefit of the Administrative Agent and the Lenders and their respective successors and assigns, and may be enforced by it or them
from time to time against any or all of the Borrowers as often as occasion therefor may arise and without requirement on the part of the Administrative Agent or the Lenders or any successor or assign first to marshal any of its or their
claims or to exercise any of its or their rights against any of the other Borrowers or to exhaust any remedies available to it or them against any of the other Borrowers 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 shall remain in effect until Payment In Full. 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 the Administrative Agent and the Lenders upon the insolvency, bankruptcy or reorganization of any of the Borrowers, or otherwise, the provisions of this Section will forthwith be reinstated in
effect, as though such payment had not been made.
120
(g) Each Borrower hereby agrees that it will not enforce any of its rights of reimbursement, contribution, subrogation or the like 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 the Administrative Agent and the Lenders with respect to any of the Obligations under the Loan Documents or any collateral therefor until
Payment In Full. Any claim which any Borrower may have against any other Borrower with respect to any payments to Lender hereunder or under any other Loan Documents are hereby expressly made subordinate and junior in right of payment,
including without limitation as to any increases in the Obligations arising hereunder or thereunder, to Payment In Full 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, Payment In Full shall occur before any payment or distribution of any character, whether in cash, securities or other
property, shall be made to any other Borrower therefor.
11.15 Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement,
arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the
Write-down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by (a) the application of any Write-down and Conversion Powers by the applicable Resolution Authority
to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and (b) the effects of any Bail-In Action on any such liability, including, if applicable, (i) a reduction in
full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge
institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan
Document; or (iii) the variation of the terms of such liability in connection with the exercise of the Write-down and Conversion Powers of the applicable Resolution Authority.
11.16 Acknowledgement Regarding any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Swaps or any other agreement or
instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to
the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the
“U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact
be stated to be governed by the Laws of the State of New York and/or of the United States or any other state of the United States):
121
(i) In the event a QFC Covered Entity/Bank/FSI that is party to a Supported QFC (each, a “QFC Covered Party”) becomes subject to a proceeding
under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property
securing such Supported QFC or such QFC Credit Support) from such QFC Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit
Support (and any such interest, obligation and rights in property) were governed by the Laws of the United States or a state of the United States. In the event a QFC Covered Party or a BHC Act Affiliate of a QFC Covered Party becomes subject
to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such QFC Covered Party are permitted to
be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the Laws of the United States or a state of the United States.
Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any QFC Covered Party with respect to a Supported QFC or any
QFC Credit Support.
(ii) As used in this Section 11.16, the following terms have the following meanings:
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“QFC Covered Entity/Bank/FSI” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
11.17 Amendment and Restatement, No Novation. This Agreement amends and restates in its entirety the Existing Credit Agreement, and each Loan Party confirms that the Existing
Credit Agreement and the other Loan Documents (as defined in the Existing Credit Agreement) have at all times, since the date of the execution and delivery of such documents, remained in full force and effect. The Loans hereunder are a
continuation of the Loans under (and as such term is defined in) the Existing Credit Agreement. On the Closing Date the commitments, loans and participations in Letters of Credit in effect and outstanding under the Existing Credit Agreement
shall be reallocated by the Administrative Agent to the Lenders in accordance with the Revolving Credit Commitments set forth in Schedule 1.1(B). The Borrowers, the Administrative Agent, and the Lenders acknowledge and agree that the
amendment and restatement of the Existing Credit Agreement and any Loan Documents expressly amended by this Agreement is not intended to constitute, nor does it constitute, a novation, interruption, suspension of continuity, satisfaction,
discharge or termination of the obligations, loans, liabilities, or indebtedness under the Existing Credit Agreement and other Loan Documents thereunder, and this Agreement and the other Loan Documents are entitled to all rights and benefits
originally pertaining to the Existing Credit Agreement and the other Loan Documents (as defined in the Existing Credit Agreement).
122
11.18 No Fiduciary Duty.
(i) In connection with all aspects of each transaction contemplated hereby, each Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that (a) the
facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm's-length
commercial transaction between the Borrowers and its Affiliates, on the one hand, and the Administrative Agent, the Lead Arranger and the Lenders, on the other hand, and each Borrower is capable of evaluating and understanding and understands
and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof), (b) in connection with the process leading to such
transaction, each of the Administrative Agent, the Lead Arranger and the Lenders is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Borrowers or any of their Affiliates, stockholders,
creditors or employees or any other Person, (c) none of the Administrative Agent, the Lead Arranger or the Lenders has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Borrower with respect to any of the
transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Lead Arranger or any Lender has advised
or is currently advising the Borrowers or any of their Affiliates on other matters) and none of the Administrative Agent, the Lead Arranger or the Lenders has any obligation to the Borrowers or any of their Affiliates with respect to the
financing transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents, (d) the Lead Arranger and the Lenders and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from, and may conflict with, those of the Borrowers and their Affiliates, and none of the Administrative Agent, the Lead Arranger or the Lenders has any obligation to disclose any of such
interests by virtue of any advisory, agency or fiduciary relationship and (e) the Administrative Agent, the Lead Arranger and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to
any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Loan Parties have consulted their own legal, accounting, regulatory and tax advisors to the
extent they have deemed appropriate.
123
(ii) Each Loan Party acknowledges and agrees that each Lender, the Lead Arranger and any Affiliate thereof may lend money to, invest in, and generally engage in any kind of business
with, any of the Borrowers or any Affiliate thereof or any other person or entity that may do business with or own securities of any of the foregoing, all as if such Lender, Lead Arranger or Affiliate thereof were not a Lender or Lead
Arranger or an Affiliate thereof (or an agent or any other person with any similar role under the credit facilities) and without any duty to account therefor to any other Lender, the Lead Arranger, any Borrower or any Affiliate of the
foregoing. Each Lender, the Lead Arranger and any Affiliate thereof may accept fees and other consideration from the Borrowers or any Affiliate thereof for services in connection with this Agreement, the credit facilities or otherwise
without having to account for the same to any other Lender, the Lead Arranger, the Borrowers or any Affiliate of the foregoing.
[SIGNATURE PAGES FOLLOW]
124
[SIGNATURE PAGE TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this Agreement as of the day and year first above written.
BORROWERS
|
JOHNSON OUTDOORS INC.
|
||
|
By:
|
/s/ Jonathan M. Rothe | |
|
Name: Jonathan M. Rothe
|
||
|
Title: Assistant Treasurer
|
||
|
JOHNSON OUTDOORS WATERCRAFT INC.
|
||
|
By:
|
/s/ Jonathan M. Rothe | |
|
Name: Jonathan M. Rothe
|
||
|
Title: Secretary and Treasurer
|
||
|
JOHNSON OUTDOORS MARINE ELECTRONICS, INC.
|
||
|
By:
|
/s/ Jonathan M. Rothe | |
|
Name: Jonathan M. Rothe
|
||
|
Title: Secretary
|
||
|
JOHNSON OUTDOORS DIVING LLC
|
||
|
By:
|
/s/ Jonathan M. Rothe | |
|
Name: Jonathan M. Rothe
|
||
|
Title: Secretary
|
||
[SIGNATURE PAGE TO CREDIT AGREEMENT]
|
UNDER SEA INDUSTRIES, INC.
|
||
|
By:
|
/s/ Jonathan M. Rothe | |
|
Name: Jonathan M. Rothe
|
||
|
Title: President
|
||
|
JOHNSON OUTDOORS GEAR, INC.
|
||
|
By:
|
/s/ Jonathan M. Rothe | |
|
Name: Jonathan M. Rothe
|
||
|
Title: Secretary and Treasurer
|
||
[SIGNATURE PAGE TO CREDIT AGREEMENT]
|
PNC BANK, NATIONAL ASSOCIATION, individually and as Administrative Agent
|
||
|
By:
|
/s/ Jacob Kessenich | |
|
Name: Jacob Kessenich
|
||
|
Title: Assistant Vice President
|
||
[SIGNATURE PAGE TO CREDIT AGREEMENT]
|
ASSOCIATED BANK, N.A.
|
||
|
By:
|
/s/ Daniel Holzhauer | |
|
Name: Daniel Holzhauer
|
||
|
Title: Senior Vice President – Team Leader
|
||
SCHEDULE 1.1(A)
PRICING GRID--
VARIABLE PRICING AND FEES BASED ON NET LEVERAGE RATIO
|
Level
|
Net Leverage
Ratio
|
Commitment
Fee
|
Letter of
Credit
Fee
|
Revolving
Credit Base
Rate Spread
|
Revolving Credit
Term SOFR Rate
Spread
|
|
I
|
Less than 1.00 to 1.00
|
0.200%
|
1.250%
|
0.250%
|
1.250%
|
|
II
|
Greater than or equal to 1.00 to 1.00 but less than 1.50 to 1.00
|
0.225%
|
1.375%
|
0.375%
|
1.375%
|
|
III
|
Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00
|
0.250%
|
1.500%
|
0.500%
|
1.500%
|
|
IV
|
Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00
|
0.275%
|
1.750%
|
0.750%
|
1.750%
|
|
V
|
Greater than or equal to 2.50 to 1.00
|
0.300%
|
2.000%
|
1.000%
|
2.000%
|
For purposes of determining the Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate:
(a) On the Closing Date, the Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate, the rates in Level I shall apply and shall remain in
effect until the end of the first fiscal quarter ending after the Closing Date.
| Schedule 1.1(A) | Page - 1 |
|
(b) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate shall be recomputed as of the end of each fiscal quarter ending after the
Closing Date based on the Net Leverage Ratio as of such quarter end. Any increase or decrease in the Applicable Margin, the Applicable Commitment Fee Rate or the Applicable Letter of Credit Fee Rate computed as of a quarter end shall be
effective on the date on which the Compliance Certificate evidencing such computation is due to be delivered under Section 8.3.3 [Certificate of Borrowers]. If a Compliance Certificate is not delivered when due in accordance with such
Section 8.3.3, then the rates in Level V shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance
Certificate is delivered.
(c) If, as a result of any restatement of or other adjustment to the financial statements of the Borrowers or for any other reason, the Borrowers or the Lenders determine that (i)
the Net Leverage Ratio as calculated by the Borrowers as of any applicable date was inaccurate and (ii) a proper calculation of the Net Leverage Ratio would have resulted in higher pricing for such period, the Borrowers shall immediately and
retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect
to the Borrowers under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or the Issuing Lender), an amount equal to the excess of the amount of interest and fees that
should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the Issuing Lender, as the case may be, under
Section 2.9 [Letter of Credit Subfacility] or Section 4.3 [Interest After Default] or Section 9 [Default]. The Borrowers’ obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other
Obligations hereunder.
| Schedule 1.1(A) | Page - 2 |
|
SCHEDULE 1.1(B)
COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES
Page 1 of 2
Part 1 - Commitments of Lenders and Addresses for Notices to Lenders
|
Lender
|
Amount of
Commitment for
Revolving Credit
Loans
|
Ratable Share
|
||||||
|
Name: PNC Bank, National Association
Address: 411 E. Wisconsin Avenue
Milwaukee, WI 53202
Attention: Joseph Vehec
Telephone: (414) 270-5691
Telecopy: (414) 226- 2353
|
$
|
33,333,333.33
|
66.666666667%
|
|
||||
|
Name: Associated Bank, N.A.
Address: 330 East Kilbourn Avenue Milwaukee, WI 53202
Attention: Daniel Holzhauer
Telephone: (414) 283-2361
Telecopy: (414) 283-2300
|
$
|
16,666,666.67
|
33.333333333%
|
|
||||
|
Total
|
$
|
50,000,000.00
|
100.000000000%
|
|
||||
Schedule 1.1(B)
SCHEDULE 1.1(B)
COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES
Page 2 of 2
Part 2 - Addresses for Notices to Borrowers and Guarantors:
ADMINISTRATIVE AGENT
Name: PNC Bank, National Association
Address: 411 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Joseph Vehec
Telephone: (414) 270-5691
Telecopy: (414) 226-2353
With a Copy To:
Agency Services, PNC Bank, National Association
Mail Stop: P7-PFSC-04-I
Address: 500 First Avenue
Pittsburgh, PA 15219
|
Attention:
|
Agency Services
|
|
Telephone:
|
(440) 546-6635
|
|
Telecopy:
|
(412) 762-8672
|
LOAN PARTIES OR BORROWER AGENT:
|
Name:
|
c/o Johnson Outdoors Inc.
|
|
Address:
|
555 Main Street
|
|
Racine, Wisconsin 53403
|
|
|
Attention:
|
Khalaf Khalaf, Esquire
|
|
Telephone:
|
(262) 631-6646
|
|
Telecopy:
|
(262) 631-6610
|
Schedule 1.1(B)
SCHEDULE 1.1(P)
Permitted Liens
[Table Omitted]
| Schedule 1.1(P) | 1 |
|
SCHEDULE 1.1(Q)(1)
QUALIFIED ACCOUNTS
To be considered a Qualified Account, an Account must meet the following minimum requirements:
(a) the Account represents a complete bona fide transaction for goods sold and delivered or services rendered (but excluding any amounts in the nature of a service charge added to the
amount due on an invoice because the invoice has not been paid when due) which requires no further act under any circumstances on the part of such Loan Party to make such Account payable by the Account Debtor; the Account arises from an
arm’s-length transaction in the ordinary course of such Loan Party’s business between such Loan Party and an Account Debtor which is not an Affiliate of any Loan Party or an officer, stockholder or employee of the Borrower or any Affiliate of
any Loan Party, or a member of the family of an officer, stockholder or employee of any Loan Party or any Affiliate of any Loan Party;
(b) the Account shall not (i) be or have been unpaid more than ninety (90) days from the invoice date, (ii) be delinquent more than sixty (60) days, or (iii) be payable by an Account
Debtor (1) more than 50% of whose Accounts have remained unpaid for more than ninety (90) days from the invoice date or are delinquent more than sixty (60) days, or (2) whose Accounts constitute, in the Administrative Agent’s determination,
more than 20% of the aggregate amount of all outstanding Accounts;
(c) the goods the sale of which gave rise to the Account were shipped or delivered or provided to the Account Debtor on an absolute sale basis and not on a bill and hold sale basis,
a consignment sale basis, a guaranteed sale basis, a sale or return basis, or on the basis of any other similar understanding, and no part of such goods has been returned or rejected;
(d) the Account is not evidenced by chattel paper or an instrument of any kind; the Account Debtor with respect to the Account (i) is Solvent, and (ii) is not the subject of any
bankruptcy or insolvency proceedings of any kind or of any other proceeding or action, threatened or pending, which might have a materially adverse effect on its business;
(e) the Account Debtor is not located outside Canada or the continental United States of America or if the Account Debtor is located outside the continental United States, the
Account is supported by a letter of credit or FICA insurance deemed adequate and acceptable by the Administrative Agent;
(f) (i) the Account Debtor is not the government of the United States of America, or any department, agency or instrumentality thereof, or (ii) if the Account Debtor is an entity
mentioned in clause (f)(i), the Federal Assignment of Claims Act (or applicable similar legislation) has been fully complied with so as to validly perfect the Lenders’ prior security interest to the Administrative Agent’s satisfaction;
(g) the Account is a valid, binding and legally enforceable obligation of the Account Debtor with respect thereto and is not subject to any dispute, condition, contingency, offset,
recoupment, reduction, claim for credit, allowance, adjustment, counterclaim or defense on the part of such Account Debtor, and no facts exist which may provide a basis for any of the foregoing in the present or future;
| Schedule 1.1(Q)(1) | 1 |
|
(h) the Account is subject to the Administrative Agent’s and the Lenders’ prior security interest and is not subject to any other Lien, claim, encumbrance or security interest
whatsoever, other than Permitted Liens;
(i) the Account is evidenced by an invoice or other documentation and arises from a contract which is in form and substance satisfactory to the Administrative Agent;
(j) the Loan Parties have observed and complied with all Laws of the state in which the Account Debtor or the Account is located which, if not observed and complied with, would deny
to the Loan Parties access to the courts of such state;
(k) the Account is not subject to any provision prohibiting its assignment or requiring notice of or consent to such assignment;
(l) the goods giving rise to the Account were not, at the time of sale thereof, subject to any Lien or encumbrance except the Administrative Agent and the Lenders’ prior security
interest and Permitted Liens;
(m) the Account is payable in freely transferable U.S. Dollars; and
(n) the Account is not, or should not be, disqualified for any other reason generally accepted in the commercial finance business.
In addition to the foregoing requirements, Accounts of any Account Debtor which are otherwise Qualified Accounts shall be reduced to the extent of any accounts payable (including the Administrative Agent’s
estimate of any contingent liabilities) by any of the Loan Parties to such Account Debtor (“Contras”); provided that the Administrative Agent, in its sole discretion, may determine that none of the Accounts in respect to such
Account Debtor shall be Qualified Accounts in the event that there exists an unreasonably large amount of payables owing to such Account Debtor.
Notwithstanding the qualification standards specified above, upon ten (10) Business Days’ prior notice to the Borrowers, the Administrative Agent may at any time or from time to time revise such qualification
standards or, in its Permitted Discretion, determine that one or more Accounts are not eligible to be Qualified Accounts.
| Schedule 1.1(Q)(1) | 2 |
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SCHEDULE 1.1(Q)(2)
QUALIFIED INVENTORY
To be considered Qualified Inventory, such Inventory must meet the following minimum requirements:
(a) the Inventory is either (i) finished goods; or (ii) raw materials other than supplies; but excluding in all cases work-in-process and any goods which have been shipped,
delivered, sold by, purchased by or provided to such Loan Party on a bill and hold, consignment sale, guaranteed sale, or sale or return basis, or any other similar basis or understanding other than an absolute sale;
(b) the Inventory is new, of good and merchantable quality;
(c) the Inventory is located on premises listed on Schedule A to the Security Agreement and, with respect to inventory locations at facilities leased to any of the Loan Parties, the
Administrative Agent has received a landlord’s waiver or other lien waiver agreement in favor of and on terms satisfactory to the Administrative Agent, or is Inventory which is in transit and is so identified on the relevant Schedule of
Inventory;
(d) the Inventory is not stored with a bailee, warehouseman, consignee or similar party unless the Administrative Agent has given its prior written consent and such Loan Party has
caused such bailee, warehouseman, consignee or similar party to issue and deliver to the Administrative Agent, in form and substance acceptable to the Administrative Agent, warehouse receipts or similar type documentation therefor in the
Administrative Agent’s name;
(e) the Inventory is subject to the Administrative Agent’s and the Lenders’ prior security interest and is not subject to any other Lien other than Permitted Liens; and
(f) the Inventory has not been manufactured in violation of any federal minimum wage or overtime Laws, including, without limitation, the Fair Labor Standards Act, 29 U.S.C. §
215(a)(1).
Notwithstanding the qualification standards specified above, upon ten (10) Business Days’ prior notice to the Borrower, the Administrative Agent may at any time or from time to time revise such qualification
standards or, in its Permitted Discretion, determine that certain Inventory is not eligible to be Qualified Inventory.
| Schedule 1.1(Q)(2) | 1 |
|
SECTION 2.9.1
Existing Letters of Credit
1. Letter of Credit Number 18112882-00-000 issued by PNC Bank, National Association in the amount of $50,711.00 for the account of Johnson Outdoors Inc. in favor of beneficiary The Travelers Indemnity Company.
2. Letter of Credit Number 18124200-00-000 issued by PNC Bank, National Association in the amount of $16,619.50 for the account of Johnson Outdoors Inc. in favor of beneficiary Lumbermens Mutual Casualty
Company, In Liquidation.
|
Schedule 2.9.1
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1 |
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SCHEDULE 6.1.1(A)
Qualifications to do Business
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Schedule 6.1.1(A)
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1 |
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EXHIBIT 5.9.7(A)
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Second Amended and Restated Credit Agreement dated as of December 9, 2025 (as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Johnson Outdoors Inc., Johnson Outdoors Watercraft Inc., Johnson Outdoors Marine Electronics, Inc., Johnson Outdoors Diving LLC, Under Sea Industries, Inc., Johnson Outdoors Gear, Inc., PNC Bank, National Association,
as Administrative Agent, and each lender from time to time party thereto.
Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent
shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrowers with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E (or W-8BEN if applicable). By executing this
certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrowers and the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrowers and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
|
[NAME OF LENDER]
|
||
|
By:
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||
|
Name:
|
||
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Title:
|
||
Date: ________ __, 20[ ]
|
Exhibit 5.9.7(A)
|
1 |
|
EXHIBIT 5.9.7(B)
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Second Amended and Restated Credit Agreement dated as of December 9, 2025 (as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Johnson Outdoors Inc., Johnson Outdoors Watercraft Inc., Johnson Outdoors Marine Electronics, Inc., Johnson Outdoors Diving LLC, Under Sea Industries, Inc., Johnson Outdoors Gear, Inc., PNC Bank, National Association,
as Administrative Agent, and each lender from time to time party thereto.
Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the
meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code].
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E (or W-8BEN if applicable). By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
|
[NAME OF PARTICIPANT]
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||
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By:
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||
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Name:
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||
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Title:
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||
Date: ________ __, 20[ ]
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Exhibit 5.9.7(B)
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1 |
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EXHIBIT 5.9.7(C)
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Second Amended and Restated Credit Agreement dated as of December 9, 2025 (as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Johnson Outdoors Inc., Johnson Outdoors Watercraft Inc., Johnson Outdoors Marine Electronics, Inc., Johnson Outdoors Diving LLC, Under Sea Industries, Inc., Johnson Outdoors Gear, Inc., PNC Bank, National Association,
as Administrative Agent, and each lender from time to time party thereto.
Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of
the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any
of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or
indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower
as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest
exemption: (i) an IRS Form W-8BEN-E (or W-8BEN if applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN-E (or W-8BEN if applicable) from each of such partner's/member's beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times
furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF PARTICIPANT]
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|||
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By:
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Name:
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Title:
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Date: ________ __, 20[ ]
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Exhibit 5.9.7(C)
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1 |
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EXHIBIT 5.9.7(D)
[FORM OF]
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Second Amended and Restated Credit Agreement dated as of December 9, 2025 (as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Johnson Outdoors Inc., Johnson Outdoors Watercraft Inc., Johnson Outdoors Marine Electronics, Inc., Johnson Outdoors Diving LLC, Under Sea Industries, Inc., Johnson Outdoors Gear, Inc., PNC Bank, National Association,
as Administrative Agent, and each lender from time to time party thereto.
Pursuant to the provisions of Section 5.9 [Taxes] of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of
the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing
such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the
meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrowers with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the
portfolio interest exemption: (i) an IRS Form W-8BEN-E (or W8-BEN if applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN-E (or W-8BEN if applicable) from each of such partner's/member's beneficial owners that is claiming
the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrowers and the Administrative Agent,
and (2) the undersigned shall have at all times furnished the Borrowers and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the
undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
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[NAME OF LENDER]
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||
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By:
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||
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Name:
|
||
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Title:
|
||
Date: ________ __, 20[ ]
|
Exhibit 5.9.7(D)
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1 |
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Exhibit 19
JOHNSON OUTDOORS INC.
INSIDER TRADING POLICY
The Board of Directors of Johnson Outdoors Inc. (the "Company") has adopted this Insider Trading Policy applicable to all of the Company's and its designated subsidiaries' employees, officers,
directors and consultants with respect to transactions in the Company's securities, as well as the securities of publicly traded companies with whom the Company has a business relationship, including customers and suppliers.
This Policy is designed to prevent insider trading or allegations of insider trading, and to protect the Company's reputation for integrity and ethical conduct. It is your obligation to understand
and comply with this Policy. Should you have any questions about this Policy, please contact the Company's General Counsel.
Applicability of Policy
This Policy applies to all transactions in the Company's securities, including common stock, options for common stock and any other securities the Company may issue from time to time, such as
preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company's securities, whether or not issued by the Company, such as exchange-traded options. This policy applies to all officers, directors,
employees and consultants of the Company and its subsidiaries, who receive or have access to Material Nonpublic Information (as defined below) regarding the Company. This group of people, members of their immediate families, and members of their
households are sometimes referred to in this policy as "Insiders." This policy also applies to any person who receives Material Nonpublic Information from any Insider.
Any person who possesses Material Nonpublic Information regarding the Company is an Insider for so long as the information is not publicly known.
Administration of the Policy
The Company’s Chief Financial Officer and General Counsel shall serve as the Compliance Officers for the purposes of this Policy, and in their absence, another employee designated by the Board of
Directors shall be responsible for the administration of this Policy. All determinations and interpretations relating to this Policy by the Compliance Officer shall be final and not subject to further review.
Statement of Policy
1. Trading on Material Nonpublic Information. No Insider shall engage in any transaction involving a purchase or sale of the Company's securities, including any offer to purchase
or offer to sell, during any period in which he or she possesses Material Nonpublic Information concerning the Company. Moreover, no Insider may purchase or sell any security of any other company, whether or not issued by the Company, while in
possession of Material Nonpublic Information about that company that was obtained in the course of his or her involvement with the Company or its subsidiaries.
1
2. Short Sales. No Insider shall engage in a short sale of the Company's securities. A "Short Sale" is a sale of securities not owned by the seller or, if owned, not delivered
against such sale within 20 days thereafter (a "Short Against the Box"). Transactions in certain put and call options for the Company's securities may in some instances constitute a short sale.
3. Tipping. No Insider who knows of Material Nonpublic Information about the Company and its subsidiaries shall disclose ("tip") Material Nonpublic Information to any other person
inside the Company whose job or role does not require them to have that information or to any person outside the Company (including family members or friends) concerning the Company or its subsidiaries, nor shall such Insider or related person make
recommendations or express opinions as to trading in the Company's securities on the basis of Material Nonpublic Information, in either case without the Company's authorization.
4. Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an Insider to lock in much of the value
of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the Insider to continue to own the covered securities, but without the full risks and rewards of
ownership. When that occurs, the Insider may no longer have the same objectives as the Company's other stockholders. Therefore, these types of transactions are prohibited by this Policy.
5. Margin Accounts. Securities held in a margin account may be sold without your consent by a broker if you fail to meet a margin call. Because a margin sale may occur at any time
when an Insider is aware of Material Nonpublic Information or otherwise are not permitted to trade in the Company's securities, all Insiders are prohibited from holding the Company's securities in a margin account. However, the Company may, on a
case-by-case basis, grant an exception to this prohibition and permit an Insider to hold Company Securities in a margin account or otherwise pledge Company securities as collateral for a loan. Any such exception must be approved in advance by the
Compliance Officer. The Compliance Officer may consider any factors he or she deems relevant in deciding whether to approve a margin account or pledge, including the financial capacity of the Insider to satisfy any obligation without resort to the
pledged shares and whether the obligations pursuant to the margin account or pledge are full recourse to the Insider. If the Insider is subject to the Addendum to this Policy, any such margin account or pledge may not be established during any
Quarterly Blackout Period or Event-Specific Blackout as provided in the Addendum.
6. No Exception for Hardship. The existence of a personal financial emergency does not excuse any Insider from compliance with this Policy.
7. Confidentiality of Nonpublic Information. Material Nonpublic Information relating to the Company is the property of the Company and the unauthorized disclosure of such
information is forbidden. In the event any officer, director, employee or consultant of the Company receives any inquiry from outside the Company, such as a stock analyst, for information (particularly financial results and/or projections), the
inquiry should be referred to the Company's Chief Financial Officer, who is responsible for coordinating and overseeing the release of such information to the investing public, analysts and others in compliance with applicable laws and regulations.
2
8. Blackout and Pre-Clearance Procedures. To help prevent inadvertent violations of the federal securities laws and to avoid even the appearance of trading on the basis of inside
information, the Company's Board of directors has adopted an Addendum to this Policy that applies to Company directors, executive officers subject to Section 16 of the Securities Exchange Act of 1934 ("executive officers"), and certain designated
employees and consultants of the Company and its subsidiaries who have access to Material Nonpublic Information about the Company. The Company will notify you if you are subject to the Addendum.
The Addendum generally prohibits persons covered by it from trading in the Company's securities during quarterly blackout periods and during certain event-specific and fact-specific blackouts. The
quarterly blackout periods coincide with the consolidation and distribution of the financial results for the second month of each fiscal quarter. These financial results will be accompanied by a notification from the Chief Financial Officer
announcing the immediate closing of the trading window, which will reopen at the beginning of the second trading day following the release of the Company's earnings for that quarter, barring any other fact-specific or event-specific blackout.
Persons covered by the Addendum also must pre-clear all transactions in the Company's securities.
3
Potential Criminal and Civil Liability and/or Disciplinary Action
1. Liability for Insider Trading. Pursuant to federal and state securities laws, potential penalties for trading on or communicating Material Nonpublic Information can be severe, both
for individuals involved in such unlawful conduct and their employers and supervisors, and may include jail terms, criminal fines, civil penalties and civil enforcement injunctions. Given the severity of the potential penalties, compliance with
this Policy is absolutely mandatory. A person who violates insider trading laws by engaging in transactions in the Company's securities when he or she has Material Nonpublic Information can be sentenced to a substantial jail term and required to
pay a criminal penalty of several times the amount of profits gained or losses avoided. The U.S. Securities and Exchange Commission ("SEC") can also seek substantial civil penalties from any person who, at the time of an insider trading
violation, "directly or indirectly controlled the person who committed such violation," which would apply to the Company and/or management and supervisory personnel. Even for violations that result in a small or no profit, the SEC can seek
penalties from a company and/or its management and supervisory personnel as control persons.
2. Liability for Tipping. Insiders may also be liable for improper transactions by any person (commonly referred to as a "tippee") to whom they have disclosed Material Nonpublic
Information regarding the Company or to whom they have made recommendations or expressed opinions as to trading in the Company's securities on the basis of such information. Tippers can be subject to the same penalties and sanctions as the
tippees, and the SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the Financial Industry Regulatory Authority use sophisticated electronic surveillance techniques to
uncover insider trading.
3. Possible Disciplinary Actions. The Company may also impose sanctions for failure to comply with this Policy, including dismissal for cause, whether or not your failure to comply
with this Policy results in a violation of law.
4. Individual Responsibility. Every officer, director, employee and consultant has the individual responsibility to comply with this Policy against insider trading and to maintain
the confidentiality of information about the Company and to not engage in transactions in Company securities while in possession of Material Nonpublic Information. An Insider may, from time to time, have to forego a proposed transaction in the
Company's securities even if he or she planned to make the transaction before learning of the Material Nonpublic Information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting. Each
individual is responsible for making sure that he or she complies with this Policy, and that any family member, household member or entity whose transactions are subject to this Policy also complies with this Policy. In all cases, the
responsibility for determining whether an individual is in possession of Material Nonpublic Information rests with that individual, and any action on the part of the Company, the Compliance Officer or any other employee or director pursuant to this
Policy (or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws.
4
Applicability of Policy to Inside Information Regarding Other Companies
This policy and the guidelines described herein also apply to material nonpublic information relating to other companies, including the Company's distributors, vendors or suppliers ("Business
Partners"), when that information is obtained in the course of employment with, or during the rendering of services by or on behalf of, the Company or its subsidiaries. Civil and criminal penalties, and termination of employment, may result from
trading on or entering into any transaction related to inside information regarding the Company's Business Partners. All officers, directors, employees and consultants should treat Material Nonpublic Information about the Company's Business
Partners with the same care required with respect to information related directly to the Company.
Definition of Material Nonpublic Information
Information should be regarded as (1) material if it has market significance, that is, if its public dissemination is likely to affect the market price of securities, or if there is a reasonable
likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the Company's securities or the securities of the Company's Business Partners and (2) nonpublic if the information
has not been previously disclosed to the general public and is otherwise not available to the general public such as in a press release or an SEC filing (such information is referred to as "Material Nonpublic Information").
Any information that could be expected to affect the Company's stock price, whether it is positive or negative, should be considered material. There is no bright-line standard for assessing
materiality; rather, materiality is based on an assessment of all of the facts and circumstances, and is often evaluated by enforcement authorities with the benefit of hindsight. While it may be difficult under this standard to determine whether
particular information is material, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of such information may include:
| • |
Financial results
|
| • |
Changes in financial guidance
|
| • |
Known but unannounced future earnings or losses
|
| • |
Execution or termination of significant contracts with distributors, customers, collaborators and other business partners
|
| • |
News of a pending or proposed merger or other acquisition
|
| • |
News of the disposition, construction, acquisition, pledging or license of significant assets
|
| • |
A cybersecurity risk or incident involving the Company, including relating to customers, suppliers, employees or any Company data
|
| • |
Impending bankruptcy or financial liquidity problems
|
| • |
Patent or other intellectual property milestones
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| • |
Scientific achievements or other developments from research efforts
|
| • |
Significant developments involving corporate relationships
|
| • |
Changes in dividend policy or a stock repurchase program
|
| • |
New product announcements of a significant nature
|
| • |
Significant product defects or modifications
|
5
| • |
Stock splits
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| • |
New equity or debt offerings
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| • |
Positive or negative developments in outstanding litigation
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| • |
Significant litigation exposure due to actual or threatened litigation
|
| • |
Major changes in senior management
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Either positive or negative information may be material.
Additionally, the fact that information has been disclosed to a few members of the public does not make it public for insider trading purposes. To be "public" the information must have been
disseminated in a manner designed to reach investors generally, and the investors must be given the opportunity to absorb the information. Even after public disclosure of information about the Company, you must wait until the open of business on
the second trading day after the information was publicly disclosed before you can treat the information as public.
Non-public information may include:
| • |
undisclosed facts that are the subject of rumors, even if the rumors are widely circulated; and
|
| • |
information that has been entrusted to the Company on a confidential basis until a public announcement of the information has been made and enough time has elapsed for the market to respond to a public announcement of the information
(normally two trading days).
|
If you are not sure whether information is considered material and/or public, you should either consult with the Company's General Counsel or assume that the information is material and non-public
and treat it as confidential.
Post-Termination Transactions
This Policy continues to apply to transactions by an Insider in the Company's securities even after the Insider's employment or services to the Company or one of its subsidiaries have terminated
until any Material Nonpublic Information concerning the Company that the Insider possesses as of the date of termination has become public. Post-Insider transactions are not subject to the Addendum.
Certain Exceptions
Transactions under Company Stock Incentive Plans
The Company's insider trading policy does not apply to the exercise of an employee stock option granted by the Company, the exercise of stock appreciation rights under the Company's stock incentive
plan, the grant of restricted stock or restricted stock units or other equity awards under the Company's stock incentive plan (but not the sale of any shares issued upon such exercise or grant) or to the exercise of a tax withholding right
pursuant to which you elect to have the Company withhold shares subject to such an option to satisfy tax withholding requirements. Nor does it apply to your surrender to the Company of previously owned shares to pay the option exercise price. The
policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option or following the vesting of restricted stock, or any other market sale. In other words, while the exercise of an employee stock option is
not subject to the policy, any sale of the shares acquired upon exercise (other than to the Company) is subject to the policy.
6
Bona Fide Gifts
For purposes of this Policy, the Company considers that bona fide gifts of the securities of the Company are exempt from this Policy, unless the Insider making the gift has reason to believe that the recipient
intends to sell the Company Securities while the Insider is aware of Material Nonpublic Information.
Employee Stock Purchase Plan
The Company's insider trading policy does not apply to purchases of Company stock in the Company employee stock purchase plan resulting from your periodic withholding of compensation under the
plan's election forms for the purpose of purchasing Company stock. Instead, your purchase of Company stock under the plan is subject to the terms and conditions of the plan in effect at the time of such purchase.
Inquiries
Your compliance with this Policy is extremely important to you and the Company. If you have any questions about this Policy or its application please address them to the CFO or General Counsel. Do
not try to resolve uncertainties on your own, as the rules relating to insider trading are complex and there can be severe consequences for any violation of the rules.
This Insider Trading Policy is dated March 1, 2023 and supersedes any previous policy of the Company concerning insider trading.
7
JOHNSON OUTDOORS INC.
ADDENDUM TO INSIDER TRADING POLICY –
PRE-CLEARANCE AND BLACKOUT PROCEDURES
This is an Addendum to the Insider Trading Policy of Johnson Outdoors Inc. (the "Company"). You should carefully review the Insider Trading Policy along with this Addendum for important terms and
definitions that relate to this Addendum, including the definition of Material Nonpublic Information. This Addendum is in addition to and supplements the Insider Trading Policy.
To help prevent inadvertent violations of the federal securities laws and to avoid even the appearance of trading on inside information, the Company's Board of Directors has adopted this Addendum.
This Addendum applies to directors, executive officers subject to Section 16 of the Securities Exchange Act of 1934 ("executive officers") and certain designated employees of the Company or its subsidiaries (collectively, "Covered Persons"). The
names of the Covered Persons subject to this Addendum are listed on the attached Schedule 1. The Company may amend Schedule 1 from time to time as necessary to reflect any changes it deems appropriate, such as the appointment, resignation or change
in status of any individual.
This Addendum also includes additional procedures designed to address the two- business day Form 4 filing requirement under Section 16.
Blackout Procedures
1. Quarterly Blackout Periods for Covered Persons. The period commencing with the consolidation and distribution of the financial results for the second month of each fiscal
quarter and ending at the beginning of the second trading day following the date of public disclosure of the financial results for that quarter is a particularly sensitive period of time for transactions in the Company's stock from the perspective
of compliance with applicable securities laws. This sensitivity is due to the fact that the Covered Persons will, during that period, often possess Material Nonpublic Information about the expected financial results for the quarter during that
period. Accordingly, this period of time is referred to as a "Quarterly Blackout Period." All Covered Persons are prohibited from trading or engaging in any transaction that involves the purchase or sale of the Company's securities during the
Quarterly Blackout Period.
2. Event-Specific Blackout Periods. In addition to the Quarterly Blackout Periods, from time to time, Material Nonpublic Information regarding the Company may be pending. While
such information is pending, the Company may impose a special Event- Specific Blackout Period during which the same prohibitions on trading the Company's securities shall apply. The Company will notify those persons who are subject to any Event-
Specific Blackout Period. All officers, directors, employees, consultants and contractors of the Company and its subsidiaries are urged to remember that even if they are not subject to a Quarterly or Event-Specific Blackout Period, they are still
prohibited from the unauthorized disclosure of any Material Nonpublic Information and the misuse of Material Nonpublic Information in securities trading.
8
3. Exception for Approved 10b5-1 Plans. Rule 10b5-1 under the Securities Exchange Act of 1934 provides an affirmative defense from insider trading liability under the federal
securities laws for trading plans (referred to as 10b5-1 plans) that meet certain requirements. In general, a 10b5-1 plan must be entered into outside of a Blackout Period and at a time in which you do not have Material Nonpublic Information about
the Company. In order to have a valid 10b5-1 plan, you must:
(i) enter into a binding contract to purchase or sell the security;
(ii) instruction another person to purchase or sell the security for your account; or
(iii) adopt a written plan for trading securities.
Furthermore, the contract, plan or instructions must:
(i) specify the amount of securities to be traded, the price at which they will be sold and the date of the transaction;
(ii) include a formula for determining the amount, price and date; or
(iii) not permit the trader any influence over how, when or whether to effect a trade and no such influence may in fact be exercised.
If you enter into a 10b5-1 plan which is in writing and approved in advance by the Company's Chief Financial Officer and its General Counsel, then you may trade in the Company's securities pursuant
to such 10b5-1 plan during a Blackout Period and while otherwise in possession of Material Nonpublic Information. See Addendum to Insider Trading Policy – Rule 10b5-1 Trading Plans.
The Company's approval of a Covered Person's Rule 10b5-1 plan does not constitute any advice or assurance to the Covered Person that the plan complies with Rule 10b5-1 or will result in an
effective affirmative defense under the rule and such approval shall no way reduce or eliminate any Covered Person's obligations under Section 16 of the Exchange Act, including such person's disclosure and short-swing trading liabilities
thereunder. If any questions arise, such person should consult with his or her own counsel in implementing a Rule 10b5-1 plan.
Preclearance of Trades by Covered Persons
The Company has determined that all Covered Persons must refrain from trading in the Company's securities or engaging in any transaction related to the Company's securities, even outside of a
Blackout Period, without first complying with the Company's preclearance process. This preclearance requirement applies to stock option exercises, bona fide gifts and other transactions otherwise excepted from the Insider Trading Policy. Each such
person must contact the Company's Chief Financial Officer and its General Counsel prior to commencing any trade in or transaction related to the Company's securities, including entering into a 10b5-1 plan. The Company's Chief Financial Officer and
its General Counsel will consult as necessary with senior management of the Company before clearing any proposed trade.
9
Additional Information - Directors and Executive Officers
Directors and executive officers of the Company must also comply with the reporting obligations and limitations on short-swing transactions set forth in Section 16 of the Securities Exchange Act of
1934. The practical effect of these provisions is that directors and executive officers who purchase and sell the Company's securities within a six-month period must disgorge all profits to the Company whether or not they had knowledge of any
Material Nonpublic Information. Under these provisions, and so long as certain other criteria are met, neither the receipt of restricted stock, restricted stock units, an option, a stock appreciation right or any other equity award
under the Company's stock incentive plans, nor the exercise of that option, stock appreciation right or other equity award is deemed a purchase under Section 16; however, the sale of any such shares is a sale under Section 16. Section 16 prohibits
executive officers and directors from ever making a short sale of the Company's stock. A short sale is a sale of securities not owned by the seller or, if owned, not delivered (a "short sale against the box"). Transactions in put and call options
for the Company's securities may in some instances constitute a short sale or may otherwise result in liability for short swing profits. All such transactions are prohibited by the Company's Insider Trading Policy.
This Addendum to the Insider Trading Policy is dated March 1, 2023.
10
JOHNSON OUTDOORS INC.
ADDENDUM TO INSIDER TRADING POLICY –
RULE 10b5-1 TRADING PLANS
This Policy is an Addendum to the Insider Trading Policy of Johnson Outdoors Inc.; it is in addition to and supplements the Insider Trading Policy. Defined terms have the same
meaning as those given in the Insider Trading Policy, unless otherwise noted.
This Policy is designed to allow Insiders the opportunity to trade in Company shares pursuant to a written plan that complies with the requirements of Rule 10b5-1 of the
Securities and Exchange Act of 1934, as amended (the “Act”). More specifically, it is intended to allow Insiders the opportunity to trade in Company shares during Quarterly Blackout Periods and Event-Specific Blackout Periods without risk of
violating Company policy or federal securities laws, provided such trades comply with the terms of this Addendum. It is intended to offer greater certainty to Insiders when planning transactions in Company stock and greater flexibility in managing
their personal financial affairs.
Background on Rule 10b5-1
Section 10 of the Act and Rule 10b5-1 prohibit the purchase or sale of a security on the basis of material non-public information. Rule 10b5-1 provides clarity regarding when
trades are made “on the basis of” material non-public information and offers a “safe harbor” in the form of a Rule 10b5-1 trading plan (a “Plan”). A person executing pre-planned trades pursuant to a Plan that was established in good faith when that
person was not in possession of material non-public information has an affirmative defense against charges of insider trading, even if actual trades made pursuant to the plan are executed at time when the individual may be in possession of material
non-public information and would otherwise be a violation of applicable law. Rule 10b5-1 Plans are therefore considered especially relevant for Insiders.
Applicability of Policy
This Policy applies to all transactions of the Company’s common stock and options for common stock, stock appreciation rights, restricted stock, restricted stock units or other
equity awards received under the Company's stock incentive plan by Insiders pursuant to a pre-established trading plan that complies with the requirements of SEC Rule 10b5-1 and the Plan Requirements outlined below. Establishment of a Plan in
compliance with this policy does not negate the prohibitions included in the Company’s Insider Trading Policy, including paragraphs 2 through 7, inclusive.
Plan Requirements
1. The Plan must be entered into in good faith and not as part of a scheme to avoid the prohibitions of federal securities laws and the Insider must act in good faith with
respect to his or her Plan.
11
2. The person establishing the Plan must not be aware of any material non-public information concerning the Company or its securities at the time the Plan is established.
3. The terms of the Plan must specify the amount, price and date of the transaction(s) or include a written formula for determining the amount, price and date.
4. The person trading must not exercise any subsequent influence over how, when or whether to enter into transaction(s).
5. Transactions must be made pursuant to the Plan.
Statement of Policy
| 1. |
Establishment of Plan. An Insider may establish a Plan outside of Quarterly Blackout Periods and Event-Specific Periods when such individual is not aware of any material non-public information. Such individual must certify that
s/he is not in possession of material non-public information as part of establishing the Plan. The Plan must be entered in good faith and not as part of a scheme to avoid the prohibitions of federal securities laws. Company approval is
required to establish a Plan and the General Counsel is delegated responsibility for reviewing all proposed Plans to ensure that each Plan fully complies with the requirements of this Policy. Only shares that are owned free and clear of any
and all restrictions and liabilities may be subject to a Plan. Shares made subject to a Plan may not be transferred outside of such Plan. An Insider may have only one Plan at any time and may not have multiple overlapping plans. Insiders
may only rely on the affirmative defense for a single-trade plan to only one single-trade plan per twelve-month period.
|
| 2. |
Plan Terms. The Plan must specify the amount, price and date of transaction(s) or include a written formula for determining the amount, price and date of transactions. The Plan should be tailored to the specific needs of the
Insider who establishes the Plan.
|
| a. |
Amount: The amount may be either a specified number of shares or a specified dollar value of shares. The amount can be linked to an external factor such as the cost of tuition published by a particular college.
|
| b. |
Price: A Plan may set minimum or maximum prices or prices that change over time, provided that the price targets or the method for determining the price targets are set forth in the Plan.
|
| c. |
Date: A Plan can be designed to initiate a transaction upon a triggering event, such as the due date of a particular financial obligation.
|
| d. |
Duration: A Plan’s duration should be designed to meet the needs of the Insider and also avoid the appearance of manipulation. Accordingly, there is no minimum duration of a Plan, but a Plan must terminate by no later than two years from
the date it is established. For Company Directors and Section 16 Officers, trading under a Plan may not commence less than 90 days from the date such Plan is adopted or modified or two business days following disclosure in a Form 10-Q or
Form 10-K of the Company's financial results for the quarter in which the Plan was adopted (but not to exceed 120 days following adoption or modification of the Plan), whichever is later. Trading under a Plan adopted by persons other than
Company directors and officers may not commence less than 45 days from the date such Plan is established or the end of the then current Quarterly Blackout Period, whichever is later. A Plan may provide for the suspension of trading for
certain specified events, including a merger, significant acquisition, corporate restructuring or death of the Insider establishing such Plan.
|
| 3. |
Modifications and Termination of a Plan. Modifications of a Plan are strongly discouraged absent compelling circumstances and, in such cases, only outside of Quarterly Blackout Periods and Event-Specific Periods when the Insider
who established the Plan is not in possession of material non-public information. Termination of a Plan before the end of the Plan period is also strongly discouraged absent unusual circumstances. Insiders who terminate a Plan prematurely
may not establish a subsequent Plan earlier than six months from the date of such prior termination.
|
12
| 4. |
Third Party Execution of Plan. The third party who will execute trades under a Plan (the “administering broker”) must have no discretion or exercise any influence over how, when or whether to trade Company shares subject to a
Plan. Once a Plan has been established, an Insider may have no further contact with the administering broker regarding the Plan (other than notification that trades have been executed).
|
| 5. |
Regulatory Reporting Requirements. Trades in Company shares must still comply with other regulatory reporting requirements, including Forms 3, 4 and 5, Schedules 13D and 13G.
|
| 6. |
Trades Outside of Plan. Insiders who establish a Plan are strongly discouraged from entering into transactions in Company shares outside such Plan during its duration.
|
| 7. |
Disclosure. The Company reserves the right to disclose relevant information related to the adoption, modification, termination or suspension of any Plan established by an Insider.
|
Inquiries
Your compliance with this policy is extremely important to you and the Company. If you have any questions about this Policy Addendum or its application, please address them to the General Counsel.
Do not try to resolve uncertainties on your own, as the rules relating to insider trading and Rule 10b5-1 plans are complex and there can be severe consequences for any violation of the rules.
This Policy Addendum is dated March 1, 2023.
13
|
|
Date |
SCHEDULE 1
JOHNSON OUTDOORS INC.
OFFICERS, DIRECTORS AND OTHER PERSONNEL SUBJECT TO
SECTION 16 AND PRECLEARANCE
| 1. |
Directors:
|
| Name |
| 2. |
Officers (including officers who are also directors):
|
| Name |
Title
|
| 3. |
Additional Employees Subject to Blackout Period and Preclearance of Trades:
|
| Name |
Title
|
2
JOHNSON OUTDOORS INC.
INSIDER TRADING COMPLIANCE PROGRAM
PRECLEARANCE CHECKLIST
|
Individual Proposing to Trade or Enter into any Transaction Involving a Security of the Company:
|
|
Proposed Trade or Transaction, incl. no. shares:
|
|
Manner of Trade or Transaction:
|
|
Proposed Trade Date or Transaction Date:
|
Please review the requirements below and confirm as appropriate. If you are confirming a statement please check that box, if the statement is not applicable please check that box.
Blackout Period. Confirm that the trade or transaction will be made or entered into outside the Company's "Blackout Period."
Confirmed ☐
Section 16 Compliance. Confirm, if the individual is an officer or director subject to Section 16, that the proposed trade
or transaction will not give rise to any potential liability under Section 16 as a result of matched past (or intended future) transactions. Confirmed ☐ N/A ☐
Form 4. Confirm, if a Form 4 filing is required, that it has been or will be completed and will be timely filed. Confirmed
☐ N/A ☐
Prohibited Trades. Confirm, if the individual is an officer or director subject to Section 16, that the proposed transaction
is not a "short sale," put, call or other prohibited or strongly discouraged transaction. Confirmed ☐ N/A ☐
Rule 144 Compliance. If Rule 144 is not applicable, check here ☐
Confirm, if Rule 144 compliance is applicable:
i. Current public information requirements have been met (i.e., all 10-K, 10-Q and other reports during the last twelve months have been filed); Confirmed ☐
ii. Shares are not restricted or, if restricted, the applicable holding period has been met; Confirmed ☐
iii. Volume limitations (greater of 1% of outstanding Common Stock or average weekly trading volume last four weeks) are not exceeded (confirm the individual is not part of an aggregate group); Confirmed ☐
1
iv. The manner of sale requirements have been met ("broker's transaction" or directly with market maker); and Confirmed ☐
v. The Form 144 notice has been completed and filed. Confirmed ☐
Rule 10b-5 Concerns. Confirm that:
i. The individual has been reminded that trading is prohibited when in possession of any material information regarding the Company that has not been adequately disclosed to the public; Confirmed ☐
ii. The individual has discussed with the Compliance Officer any information known to the individual or the Compliance Officer which the individual believes may be material; and Confirmed ☐
iii. There are no events which have imposed a special prohibition upon this individual that precludes the individual from trading or entering into any transaction involving the Company's securities. Confirmed ☐
|
Signature of Chief Financial Officer
|
||
|
Date:
|
||
|
Signature of General Counsel
|
||
|
Date:
|
||
I am not trading, or if applicable, making a gift, on Material Nonpublic Information.
|
Signature of Individual
|
||
|
|
Date:
|
|
2
EXHIBIT 21
JOHNSON OUTDOORS INC. AND SUBSIDIARIES
The following lists the principal direct and indirect subsidiaries of Johnson Outdoors Inc. as of October 3, 2025. Inactive subsidiaries are not presented:
|
Name of Subsidiary(1)(2)
|
Jurisdiction in
which Incorporated
|
|
Johnson Outdoors Canada Inc.
|
Canada
|
|
Johnson Outdoors Watercraft Inc.
|
Delaware
|
|
Johnson Outdoors Marine Electronics. Inc.
|
Alabama
|
|
Johnson Outdoors Gear Inc.
|
Delaware
|
|
Johnson Outdoors Diving LLC
|
Delaware
|
|
Under Sea Industries, Inc.
|
Delaware
|
|
JWA Holding B.V.
|
Netherlands
|
|
Johnson Beteiligungsellschaft GmbH
|
Germany
|
|
Uwatec AG
|
Switzerland
|
|
Scubapro Asia Pacific Ltd.
|
Hong Kong
|
|
P.T. Uwatec Batam
|
Indonesia
|
|
Scubapro Espana, S.A.
|
Spain
|
|
Scubapro AG
|
Switzerland
|
|
Scubapro Europe Benelux, S.A.
|
Belgium
|
|
Johnson Outdoors France
|
France
|
|
Scubapro/Uwatec France S.A.
|
France
|
|
Scubapro Europe S.r.l
|
Italy
|
|
Scubapro Italy S.r.l.
|
Italy
|
|
Endless Summer Technologies Proprietary Limited
|
South Africa
|
|
Scubapro-Uwatec Australia Pty. Ltd.
|
Australia
|
|
Johnson Outdoors Vertriebsgesellschaft GmbH
|
Germany
|
| (1) |
Unless otherwise indicated in brackets, each company does business only under its legal name.
|
| (2) |
Unless otherwise indicated by footnote, each company is a wholly-owned subsidiary of Johnson Outdoors Inc. (through direct or indirect ownership).
|
EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement (No. 333-271717, 333-238004, 333-217855, 333-217854, 333-166418, 333-166417, 033−19804,
033−19805, 033−35309, 033−50680, 033−52073, 033−54899, 033−59325, 033−61285, 333−88089, 333−88091, 333−84480, 333−84414, 333−107354 and 333−115298) on Form S-8 of Johnson Outdoors Inc. of our reports dated December 12, 2025, relating to the consolidated financial statements and the effectiveness of internal control over financial reporting of Johnson Outdoors Inc. appearing in this Annual
Report on Form 10-K of Johnson Outdoors Inc. for the year ended October 3, 2025.
/s/ RSM US LLP
Milwaukee, Wisconsin
December 12, 2025
EXHIBIT 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
I, Helen P. Johnson-Leipold, certify that:
| 1. |
I have reviewed this Annual Report on Form 10-K of Johnson Outdoors Inc.;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
| a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
| c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
|
| d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and
the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
| a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date: December 12, 2025
|
/s/ Helen P. Johnson-Leipold
|
|
|
Helen P. Johnson-Leipold
|
||
|
Chairman and Chief Executive Officer
|
EXHIBIT 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934
I, David W. Johnson, certify that:
| 1. |
I have reviewed this Annual Report on Form 10-K of Johnson Outdoors Inc.;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
| a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
| c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
|
| d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and
the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
| a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date: December 12, 2025
|
/s/ David W. Johnson
|
|
|
David W. Johnson
|
||
|
Vice President and Chief Financial Officer
|
||
|
Treasurer
|
EXHIBIT 32.1
Written Statement of the Chairman and Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350
Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Chairman and Chief Executive Officer of Johnson Outdoors Inc. (the “Company”),
hereby certify that the Annual Report on Form 10-K of the Company for the year ended October 3, 2025 (the “Report”) fully complies with the requirements of
Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Helen P. Johnson-Leipold
|
|
|
Helen P. Johnson-Leipold
|
|
|
Chairman and Chief Executive Officer
|
|
|
December 12, 2025
|
Written Statement of the Vice President and Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350
Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Vice President and Chief Financial Officer of Johnson Outdoors Inc. (the
“Company”), hereby certify that the Annual Report on Form 10-K of the Company for the year ended October 3, 2025 (the “Report”) fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ David W. Johnson
|
|
|
David W. Johnson
|
|
|
Vice President and Chief Financial Officer
|
|
|
Treasurer
|
|
|
December 12, 2025
|
The above certifications are made solely for the purpose of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose.